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World Trade (Doha Development Agenda)

Tempted though I am, I do not want to get drawn into Japanese economic history, except to say that we Conservatives recognise the necessity for a transition period and sequencing to allow developing nations to grow their industrial bases. That is the key to their ultimately joining the international trading system and alleviating poverty far faster than they would by exporting agricultural produce alone. The hon. Member for Richmond Park (Susan Kramer) was right to mention economic partnership agreements. As the hon. Member for Glasgow, North said, yesterday she and I were at a meeting with African representatives who are very concerned about EPAs and the damage that they may cause their growing economies and prospects for job creation. The hon. Member for Richmond Park will be pleased to hear that her conversation with a representative of the Windward Islands was the same as the one that the hon. Member for Glasgow, North and I had with a representative from Barbados. Consideration has to be given to small island states and landlocked countries, which have problems generating international trade and getting their produce to markets. We Conservatives recognise that trade is the best way to lift people out of poverty. We agree with the World Bank that current trade restrictions are the biggest impediment to economic advancement and poverty reduction in the developing world. We support the Doha round and its specific development agenda, and, like other Members, we are extremely disappointed that it seems to have run into the ground. We also acknowledge that the benefits of trade are numerous and varied; it contributes to faster growth, cheaper imports and new technologies and it enables Governments of developing nations to generate revenues and reinvest in infrastructure and essential public services. The British agenda is a cross-party one; collectively, we all want poverty in the developing world to be alleviated and the developing world to join the international trading community. As the hon. Member for City of York rightly pointed out, progress has been made on aid and debt, but there is an enormous way to go on trade. The Doha ministerial declaration clearly stated that"““International trade can play a major role in the promotion of economic development and the alleviation of poverty.””" It promised to put the needs and interests of citizens of developing nations at its heart, but, as hon. Members have said, that seems to have been lost in the detail of the conversation and the negotiations that have taken place. It is now widely accepted that the millennium development goals will not be met in anything like the time scale envisaged without a successful and development-focused round of trade talks. We all know that things have stalled due to the intransigence of the European Union and the United States, which both need to bear responsibility for the failures. I should like to highlight one or two of their highly cynical moves. The US offered to end export subsidies by 2010, and that may appear very generous. However, it does not amount to much. The US provides very little by way of export subsidies; instead, it relies on export credits and food aid in kind. As I hope the Minister will be aware, food aid in kind has exactly the same impact as export subsidies, as it helps farmers find a market for their excess production. I have another example. The EU offered to cut payments to farmers by 70 per cent., contingent on other reductions from other major countries. That offer includes a 50 to 60 per cent. cut in the highest import tariffs and smaller cuts in lower tariffs, giving an average of 25 per cent. The EU also offered to end export subsidies, but did not offer a date. Again, on the surface that appears extremely generous, but if we look at the detail, we see that the EU will not have to reduce the amount of money that it pays to farmers by a single euro. The EU offered to end export subsidies, which comprise only 3.6 per cent. of the common agricultural policy. Such highly cynical moves need to be exposed for what they are—a disgrace. I do not want to repeat the very good point made by my hon. Friend the Member for Buckingham when he highlighted the importance of duty-free and quota-free agreements, but I should like to make two additional points to build on what he said. First, as I am sure he is aware, the 3 per cent. that he mentioned is supposed to apply only for a transitional period. However, that transitional period is indefinite and will go on into perpetuity unless it is specifically stopped. What really strikes me is that 98 per cent. of Bangladeshi exports are in textile manufacturing. If the 3 per cent. figure were agreed to, that would have a significant detrimental impact on the Bangladeshi economy. As other Members have mentioned, steps must be taken on the special and sensitive product exemptions. The right hon. Member for Gordon cited the World Bank analysis that even if 2 per cent. of products from developed and 4 per cent. of products from developing countries came into that special or sensitive category, that would virtually eliminate the impact on poverty of the Doha agreement. Many hon. Members have rightly mentioned the importance of aid for trade. The commitments on that are welcome. Will the Minister will say whether aid for trade will be within the umbrella of the already existing budgets, or in addition to them? It is essential to get over the supply-side constraints—whether they be in respect of electrification or water supply—to enable developing countries to generate the industrial base and wealth creation that they require. There is concern in the developing world that the international donor community’s focus on the public services of health and education, worthy and important though they are, is distracting from the vital issue of putting more money into infrastructure projects. Other hon. Members have talked about NAMA—non-agricultural market access—on which an enormous amount more needs to be done. I have a quick question for the Minister. The ability to decide sequencing and transition on a case-by-case basis may be limited by existing WTO agreements. Will the Minister explain whether that is the case or whether there is sufficient flexibility to ensure appropriate transition phases and sequencing in market liberalisation? Members have rightly mentioned benchmarking. There seems to be a contradiction, which is highlighted in the report, in what UK Ministers are saying about the importance of and necessity for benchmarking. It would be helpful if the Minister clarified the Government’s view on that. There are significant other barriers that need to be overcome in respect of the infrastructure, roads and railways and financial conditions. Furthermore, Governments often follow short-sighted policies such as controlling interest rates below exchange rates, granting subsidised credits and keeping exchange rates artificially low. There is also the regulatory environment; there are serious barriers within African regions that I hope the Minister is trying to address. For example, the average tariff for importing agricultural produce from one African nation to another within sub-Saharan Africa is 34 per cent. It is 21 per cent. on other products. Those tariffs must be reduced, but in the context of ensuring that sufficient revenue goes into particular sub-Saharan African Governments’ coffers to enable them to provide the public services and all the other enhancements that we want them to provide. Limited technological transfer needs to occur. Part of that comes out of the agreement on trade-related aspects of intellectual property rights. That needs to be more flexible, and there is a need for greater capacity on the ground. I shall conclude, as I want to give the Minister plenty of time to wind up. It has been said that the United States and Europe have perfected the art of arguing for free trade while simultaneously working for trade agreements that protect them against imports from developing countries. As they have in the past in other areas, the British Government must take the lead in urging the EU and the rest of the world to do more to reach an agreement. The Minister may have gathered that there is some pessimism in the Chamber today, across political parties. As the agreement is an urgent priority, I ask for three things to be done. First, the Prime Minister should be persuaded during his last few months in office to become re-engaged in trying to drive an agreement through. Secondly, the UK should urge the EU to reform the common agricultural policy further and faster by abolishing all production-linked subsidies, by scrapping import tariffs and by removing all export subsidies. The Minister should consider the suggestion made by the hon. Member for City of York that that will happen with or without WTO agreement. Thirdly, pressure must be put on the EU trade commissioner and member states to enable movement in the agricultural offer from the EU. That would enable other key players to make offers in manufacturing trade and services, thereby unlocking the Doha round. Failure successfully to conclude the round would be detrimental to the developing world, to free trade, to wealth creation and, ultimately and most importantly, to poverty alleviation.