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World Trade Organisation

My Lords, I congratulate the noble Lord, Lord Brennan, on initiating this debate, which comes on the eve of the Hong Kong round, and also on introducing it so well. It has also been helpful to your Lordships that the European Committee’s report in anticipation of the Hong Kong ministerial meeting has been made available today, and I thank the noble Lord, Lord Radice, for his clear explanation of it. The WTO negotiations have generated much political hope and much high-sounding rhetoric, but without, so far, producing much of a result for the people whom they are supposed to help. I remind your Lordships that the WTO derives its ancestry from the General Agreement on Tariffs and Trade—GATT—as long ago as 1948. That was supposed to be a temporary measure to pave the way for an international trade organisation. However, its charter was never ratified, and it was only after an endless series of negotiations at various places around the world that the WTO was established. That was in the Uruguay round, which itself lasted for no less that eight years from 1986 to 1994. The current round of negotiations began in 2001 and, in my opinion, I regret to say, there is little prospect of a major breakthrough this time either. A cynic would say that all these convoluted debates are an example of international nimbyism. Everyone is agreed that free trade—or even freer trade—would help to lift undeveloped countries out of poverty and, in some cases, famine. However, individual countries—whether it is France protecting its grossly inefficient farmers or the USA, whose every president is in thrall to the powerful agricultural, steel and manufacturing industries—while paying lip service to the concept of reducing protectionism and unfair export subsidies, argue that they should be exempt. I only mention those two countries as examples. The truth is that every country has its own particular niche to protect, and I cannot view with any optimism the possibility of either a great leap forward at Hong Kong, or even a meaningful first step, despite the high-flown rhetoric of the participating governments. Persuading governments to stop trying to protect their own indigenous industries and farmers, is, to quote the well-known cliché, like trying to get turkeys to vote for Christmas. I certainly hope that I am not being too pessimistic. An outline deal was scheduled for this July, ahead of the forthcoming Hong Kong meeting. However, deadlock over—your Lordships have guessed it—agriculture meant that there was no outline deal that just needed some tidying up in Hong Kong. The noble Lord, Lord Brennan, mentioned that. The Doha agreement said, in effect, that everything must be agreed, or nothing is agreed. I note that the noble Lord, Lord Radice, said that if we were to get there by the end of 2006, we need to get a move on. It seems that Hong Kong is going to try to reach partial agreements wherever there is a consensus and to set a new deadline for full agreement. The noble Lord, Lord Radice, used the word ““modalities””, although I was not quite sure what that meant. In other words, the apparent objective at Hong Kong will be to cobble together an agreement on what is to be agreed in the future. I believe that the noble Lord, Lord Radice, said the same thing, but in much more elegant and tactful language. As the European Union Committee’s report forcefully points out,"““it is clear that an agreement on NAMA””—" non-agricultural market access—"““remains a long way off because there is an objection from developing countries to opening up their . . . markets””." The committee’s report also points outs that agreement on services seems unlikely to be reached in Hong Kong. Both my noble friend Lord Brittan and the noble Baroness, Lady Whitaker, spoke of the importance of getting something to happen with the service industries. The committee urges countries at least to set a target date to make their best and final offers on this important aspect, which is vital to the EU, because 69 per cent of EU economy is based on services. Even as recently as last October, the EU and the United States were proposing separate and different solutions to the question of agricultural liberalisation, covering market access and domestic subsidies. Even within the EU, some member states are described as being unhappy, notably France. There are also differences between the EU and the United States over services and industrial products. We also have to ask what the attitude of China will be to the constraints that the WTO will seek to apply to its emerging giant economy. So far, its attitude to issues such as counterfeiting and copyright piracy does not give rise to much optimism. How enthusiastically will EU negotiators press the line that our Government have taken? I quote none other than the Chancellor of the Exchequer, speaking before the G8 conference in June, who said:"““We cannot any longer ignore what people in the poorest countries will see as our hypocrisy of developed country protectionism””." I raise this because of different attitudes in different statements by ministers. In an open letter to the Trade Justice Movement, the Secretary of State for Trade and Industry used emotive phrases such as, ““no forced liberalisation””, a policy which he said the Government supported. In a speech to the Foreign Policy Centre on 20 October, he said,"““We must not prevent developing countries engaging in deals that could offer huge opportunities. Instead we should pursue policies that require less liberalisation from them than we concede to them””." The DTI White Paper, which the CBI supported, stated:"““The evidence shows that those countries which have achieved the biggest reductions of poverty in recent years have been those that have been open to international trade””." That statement is totally inconsistent with the two passages I have just quoted. I ask the Minister, has the Government’s policy changed? If it has, when did that happen? What signal do the two statements give about what the Government are going to concede in Hong Kong without getting anything in return? The fact is that developing countries and less-developed countries are constructing and maintaining barriers, even between themselves, but, in a perfect world, seeking international co-operation while looking after number one cannot be the right attitude. But then we do not live in a perfect world, do we? We shall no doubt find that out when we witness the deliberations at Hong Kong. The CBI pointed out to the Secretary of State in response to his open letter that,"““it is essential to recognise that British exporters face significant barriers to trade, including high tariffs, trade restrictions and bureaucracy. These trade barriers benefit no-one and their reduction or elimination would boost UK economic growth. For British companies providing commercial services, significant discrimination and restrictions remain in overseas markets””." We strongly support a policy of reducing trade barriers to assist poorer countries, but I trust and hope that in the discussions in Hong Kong, the Prime Minister will, in deciding what concessions to make, remember that there is always a price to pay, and that these negotiations must be proper negotiations with give and take. I, too, should mention the much-trumpeted recent reduction of sugar subsidies that has been watered down from a proposed reduction of 39 per cent over two years, to 36 per cent over four years. That was raised by the noble Earl, Lord Sandwich, and my noble friend Lord Haskel. I am reminded of the apocryphal prayer, ““Lord, make me good, but not just yet””. The same applies to the agreement by the EU in 2002 to reduce CAP subsidies. But after the inevitable internal disagreements, spending on CAP is to remain the same until 2013. Even then, according to Oxfam, the proposals will not make a big enough difference and that overproduction will result in the equally objectionable process of dumping. My right honourable friend the Leader of the Opposition said last April:"““The potential [of the WTO] to help the poorest countries of the world is not being realised. The developed countries are still too protectionist. Western tariffs and farm subsidies reduce the export earnings of developing countries by . . . $39 billion a year, 50 per cent more than they receive in aid””." I speak of ““hope””. We can only hope that the outcome of the forthcoming round of negotiations in Hong Kong will in fact reach a high proportion of the objectives set for them. It is also to be hoped that progress will be made in the field of non-trade concerns, such as environmental protection, food security and rural development. And, personally, I can only hope that when we come to discuss the outcome of those talks, as we surely shall after they conclude, my admittedly pessimistic views will be proved to be unfounded and I shall be able to congratulate the Government and the other participants at Hong Kong on a positive result.