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World Trade (Doha Development Agenda)

I am pleased, Mr. Amess, to be under your chairmanship. I hope that neither I nor members of the Select Committee on International Development, which I chair, will cause you any trouble. I hope, too, that you will find the debate interesting. It is important and, I suggest, timely. The Committee’s presence demonstrates that we are pleased to have the opportunity to debate the report. In April, when we produced it, the situation was tricky and a little disappointing. It is now considerably worse inasmuch as the talks are suspended, time is fast running out and even the political will to find a solution seems almost invisible, and certainly unclear when it comes to utterances, never mind activities. The importance that the Committee attaches to a successful outcome of the Doha round—by that, we mean one that favours developing countries—cannot be overstated. It goes much further than simply securing a development round. If the Doha round of trade negotiations does not deliver a deal for developing countries, not only will it be a betrayal of the world’s poor, but it will prejudice the very foundations of and justification for free trade. In a separate report earlier this year, the Committee argued the case for having an expanding private sector in developing countries as an essential component of poverty reduction. However, that in turn requires the opening up of trade possibilities as well as developing the capacity to trade. In other words, if a country does not have the opportunity to access markets, it will not be able to develop its private sector. We concluded that if such countries could not develop the private sector, they would not succeed in reducing poverty. Earlier this week, I attended a lecture at the Royal Society at which David King, the Government’s chief scientific adviser, projected that gross domestic product for Africa in 2050 will be less than that of the United Kingdom. The whole of Africa will be generating less wealth in 44 years’ time than the United Kingdom will be. That is entirely unacceptable, and it reinforces the need for trade, aid and development all to be working in the same direction. David King also predicted that Africa will have fallen behind in the green revolution—a change that has enabled many other developing countries to feed their expanding populations, as well as achieving economic growth. I am sorry to say that that reinforces somewhat the hypocrisy—I cannot find a gentler word—of the United States and the European Union in lecturing the developing world about free trade while applying the regressive protection of their own agriculture sectors and demanding conditions for liberalisation. Economies that still champion the Monroe doctrine and support agricultural subsidies are not well placed to offer leadership. The developed nations, notably the EU and the USA, have talked one way and walked another, and they seek to pass blame back and forth between them. Although the Committee welcomed the Government’s success in securing a commitment to policy space in the G8 communiqué under the British presidency, we believe that they have failed to use our presidency effectively to break the logjam. In particular, the Government allowed the EU to make conditional proposals on non-agricultural market access, and did not demur when benchmarking was tabled by the EU, both of which actions contradict the spirit of a development round. I am glad to say that benchmarking did not make much progress. In that context, I refer to paragraph 39 of our report, which quotes evidence from Sheila Page. She said:"““If we believe that liberalising the EU will benefit the EU, to say that we will not do it unless someone else does something first makes no economic sense. It certainly does not make development sense to tell developing countries, you must do what we consider sensible or we will not help you in other ways.””" If we believe that it is a good thing to do, there should not be any conditions. At paragraph 42, we say that the UK should have rejected the benchmarking proposals. That would have allowed us to avoid what was a wasteful distraction. I repeat that if we are to have a real development round—one that people can understand—the least developed countries would have 100 per cent. and unconditional duty-free and quota-free access to our markets. That, I believe, is what people understand the development round to mean. That should be accompanied—I accept that this is more qualified—by the recognition of these countries’ need for policy space. The Committee debated that, and some would argue—I concur—that policy space has to be time-limited and case-dependent. The purpose of that policy space is to allow those countries to achieve free trade competitiveness, and to recognise that small, weak, poor countries cannot immediately step up into the international marketplace and expect to compete on the same terms as the established, developed economies. The Committee was also concerned, and remains concerned, that the EU wanted to designate up to 8 per cent. of its products as sensitive, and therefore eligible for continued protection against the weakest economies. A World Bank analysis suggested that even 2 per cent. would virtually eliminate the poverty impacts of a Doha agreement. When we published the report, I said:"““If this is to be a development round then the EU should not make its offers on agriculture or wider market access to the EU conditional on reciprocal non-agricultural market access, services or anything else. A true development round gives developing countries unconditional access to developed countries’ markets for the widest range of products.””" Similarly, if we are to agree to an aid-for-trade package, it should not be considered as part of the aid budget—I fear that the Minister will probably tell us it will be—but as an investment by the UK and the EU in developing stronger trading partnerships with emerging economies, to everyone’s mutual long-term benefit. If the current round collapses or goes into deep freeze, it seems likely that trade patterns will be determined by bilateral agreements rather than multilateral ones. That would be a negation of free trade; it tends to mean some developing countries getting more favourable treatment than others. In addition, it means that when the agreements come to an end, which must happen, there will be further pain and disruption. Indeed, the Committee took evidence on that with the sugar regime.