Previous SectionIndexHome Page

Clare Short: I agree that we need to make the trade rules give more opportunities to the poorest countries. However, the WTO is only five years old; it was created after the Uruguay round, and three quarters of its members are developing countries. It does not matter what the secretariat says; if the countries involved do not want a round to be launched on the basis of that document, it will not happen. The WTO is an intergovernmental organisation. Of course the question of the different capacities of different Governments arises, but the organisation gives developing countries the chance to equalise the rules of world trade and make them fairer. That is what is important about what the WTO could deliver.

Mr. Thomas: I agree. I accept the principle of working within the WTO, but as her the Secretary of State says, the capacities of different countries are very different. We have already heard about how many members of staff some countries have working for the organisation on a daily basis, and how much influence certain lobbyists can have there. I welcome her comments and I agree with her, but we shall see what happens over the weekend. We shall see whether we arrive at a round that benefits the poorest countries.

I should like the Government to accept that trade liberalisation is not a goal in itself, but a tool for meeting the aim of worldwide sustainable development. We need a paradigm shift in thinking in the developed world. Perhaps the Secretary of State and her Minister have already made that shift, but at European Union level it has still to be seen.

We see that most clearly with the subsidies to agriculture, and the difficulties that we have in setting up a new system that would, in my view, benefit not only the farmers in this country but the developing world. To use the word in a different context, perhaps it is time for

7 Nov 2001 : Column 322

protectionism for the poor. The launch of the Trade Justice Movement this week in the House was an important step in involving parliamentarians of all parties in the developing discussion of what might be happening in the WTO.

We must look at our agricultural subsidies and how they exclude trade. We must also look at the general agreement on trade in services and how that can work properly in developing countries. In Mauritania, for example, 20 per cent. of the household budget is needed to pay for water following the privatisation of water services.

The WTO conference also needs to look at TRIPS, or trade-related aspects of intellectual property rights. It is important to support patenting in order to develop new drugs, but it is also important to recognise that generic copies of vital drugs are essential for developing countries. In that context, the potential is there for the global health fund to work almost as a counter balance to TRIPS. As was said earlier, we hope that the global health fund money will become additional to any sources of funding in the Department for International Development.

I accept that the WTO has been established for only five years, but it has yet to prove that it is working for the world's poorest. One issue that needs to be considered is the hidden subsidies in the west that may not be in the WTO agreements but are in associated international agreements. The most obvious one is Kyoto. The American Government's refusal to implement Kyoto represents, in effect, a massive subsidy to its industry. American exports are not fully priced in that respect because the full implications of Kyoto are not placed on them. America is depending on developing world carbon sinks to keep its exports cheap and its industry subsidised. Although it is not on the agenda in Doha as far as I know, it must be appreciated that the next round, whatever it is, can move forward only if it goes hand-in-hand with other international agreements such as Kyoto. If sustainable development is to mean anything, there has to be full implementation, particularly by the USA, of the Kyoto agreement.

We must also consider the possibility of a Tobin tax, or some form of international agreement on currency speculation. In that way, international capitalism, along with Governments, can make a contribution to the needs of developing countries.

Finally, we must keep our promises. We promised in 1970, at the General Assembly of the UN, that we would meet the contribution to international development of 0.7 per cent. of GDP by the middle of the 1970s. It is now the beginning of the 21st century. We reiterated the promise in the real declaration under the local Agenda 21 process. All Governments have a lamentable record on meeting the 0.7 per cent. target. It is true that the Government have recently increased their contribution to international development to about 0.31 per cent. and are on target for a contribution of 0.33 per cent. However, at the present rate of growth, it will take us 50 years to reach 0.7 per cent. I hope to be around in 50 years, although I hope that I will not be a Member of this House then. However, I hope that I do not have to wait 50 years to see us reach the 0.7 per cent. figure. Whether the target is incorporated into the Bill, which might not be acceptable, or whether it is in a strategy introduced by the Government, it must be reached. Let us aspire to be like Luxembourg, and meet that target.

7 Nov 2001 : Column 323

8.58 pm

Mr. Robert Walter (North Dorset): I welcome the opportunity to participate in the debate. I have tended to agree with most of what everybody has said. I agreed with the hon. Member for Ceredigion (Mr. Thomas) until he mentioned the Tobin tax, but as he did not elaborate on it, I did not intervene on him.

The debate and the Bill highlight the issues at the forefront of many people's minds with regard to Britain's tradition of aid—particularly humanitarian aid—when it is directed towards the situation in Afghanistan. We have had debates about the situation on other occasions and I do not want to go into it in any detail.

The Bill is about the longer-term objectives of international development and how we meet our obligations.

To some extent it is a motherhood and apple pie Bill: there is little in it to which most of us would object. Few people—apart, perhaps, from some in the odd public bar—would be against our providing assistance to developing nations. Few people would be against us doing something to alleviate world poverty. Few Members do not believe that we should make globalisation work for every nation—rich and poor.

The real test is whether the Bill and the activities of the Department for International Development can make a difference. Will the powers enacted under the measure be effective in delivering our objectives? The Bill is really about outcomes. Will the results of the use of our limited resources make a difference to the developing world and to those people in the world to whom we have an obligation?

I am not alone in thinking that the long-term answer to poverty alleviation rests with trade liberalisation. I was impressed by the contribution of the hon. Member for Glasgow, Maryhill (Ann McKechin), in which she referred to the WTO talks in Doha and to the effort that we must make to put pressure on our WTO partners to bring about trade liberalisation. That pressure must be exerted especially on our partners in the European Union and the United States—

Clare Short: And Japan.

Mr. Walter: And, indeed, in Japan, as the Secretary of State has just pointed out. We had better not get into a debate on how the rice market affects Japan.

The real opportunity for much of the developing world lies in agricultural production. Developing countries need to be able to market their produce globally without being subject to the protectionism erected by the industrialised world where other things could be produced much more effectively. We should all be dedicated to that.

In the UK, we traditionally believe that we have an obligation to equip the developing world with the capital and resources to supply those global markets. We have always seen it as our role to provide education and expertise to developing economies, so it is ironic that the Department devoted to poverty alleviation—the House must forgive my slight criticism on one point—should have imposed conditions on one of the essential vehicles for the delivery of that assistance, thereby causing it to turn its back on key sectors of industry in the developing world. I was disappointed by the Secretary of State's response to my intervention about the Commonwealth Development Corporation.

7 Nov 2001 : Column 324

The Commonwealth Development Corporation, whose name does not appear in the Bill, should be key to the delivery of the Bill's objectives. Alas, I believe that the corporation has turned its back on that important agriculture sector in the developing world. Before it is too late—before the Bill leaves the House and receives its Royal Assent—we should re-dedicate the corporation to a key role in meeting our international development objectives.

Like many colleagues, I have been fortunate enough on several occasions during my four and half years as a Member of this place to visit developing countries under the auspices of the Commonwealth Parliamentary Association. I have visited countries in Africa and Asia, and this year I was fortunate enough to visit Belize and Jamaica. Some of my comments about DFID and the Commonwealth Development Corporation are based on my experience on those visits.

The history of the CDC goes right back to 1948 and the Colonial Development Corporation. It was renamed the Commonwealth Development Corporation in the mid-1960s. In 1997, its new mandate was to invest in sustainable and socially responsible projects that were also profitable. There is no criticism of that or any objection to it. The idea of the changes was simply to raise capital from the private sector. The Secretary of State alluded to that in her response to my intervention. However, the reality is that the management team at the CDC seems to have different objectives.

Many of the CDC's assets are loans in Africa and developing countries elsewhere in farms and forests. They were in long-term, labour-intensive agricultural projects run by local experts, but the trouble is that agriculture does not produce the kind of returns that emerging market funds are looking for. It produces returns of at best 8, 9 or 10 per cent. There are many emerging market funds based in the City of London that could return 20 per cent. or more, and that seems to be what the CDC now aspires to be. Therefore, many agricultural projects are going; many are up for sale. I saw one in Belize this summer. The Del Oro citrus project, which was put together and funded by the CDC, is now up for sale, but there are no buyers. The despair among the citrus growers in that region has to be seen to be believed. They feel that the CDC, Britain and DFID are turning their backs on them.

Offices of the CDC have been closed. When I asked about the CDC in Jamaica, I was told that the regional office had moved to Miami—that well-known Commonwealth country, and of course in a developing nation. I do not believe that the CDC's role is to be an emerging market fund alongside all the other emerging market funds. It is a genuine development bank, a development corporation that can take equity stakes in Commonwealth and other countries. Its objectives have been widened. That is part of what the objectives of the Department for International Development should be—using CDC as a vehicle.

I believe that the CDC is a key weapon in Britain's armoury, not just another investment bank. It now sits with its £2 billion budget somewhat uneasily—

Next Section

IndexHome Page