Previous SectionIndexHome Page

Dr. Jenny Tonge (Richmond Park): Will the Secretary of State comment on an article in the Financial Times this morning which reports that the WTO trade negotiations are faltering badly and there is not much optimism that an agreement will be reached?

Clare Short: To be honest, I read the headline, not the whole article, but it appeared to suggest that because of the moves on steel and the US Farm Bill, there was a real danger that the Doha development agenda, which is an agenda for a trade round, would not be taken forward and we would not get a trade round, and that would grossly weaken the WTO. I agree that taking the WTO as an institution for granted would be a grave mistake. If the Doha agenda is not taken forward, the WTO will start to break up and lose its authority, which depends on consensus in the international system. We could easily end up with the rich countries making regional and bilateral trade agreements and the poorest countries being squeezed out of the rule making on international trade. If that danger were realised, it would be a terrible loss for the world and for developing countries.

Mr. David Curry (Skipton and Ripon): Does the Secretary of State agree that one of the reasons why it is

19 Jun 2002 : Column 292

essential to maintain agreement by consensus in the WTO is that without it the disputes procedure, which arbitrates in extremely difficult cases and is widely respected, simply could not continue to operate?

Clare Short: I agree. It gives one pause for thought to consider that whereas in national politics we have the conflictive style of politics that we all know and love, on crucial matters such as multilateral environment agreements and world trade agreements, all the world's countries are represented in a set of negotiations and manage to reach agreement by consensus. That is the only way to enforce such agreements—there is no world army that can make any country that gets out of line get back into line. Only through consensus and everyone understanding that it is in the world's interests that we all play by the rules and accept fair ways of decision making can we equitably manage the current phase of human history. I strongly agree with the right hon. Gentleman.

There is no doubt that in the run-up to Seattle there was a general view among developing countries that they had achieved less by the Uruguay round than had been promised, and there was resistance to a new trade round as a result. That was understandable: many of the agreements made during the Uruguay round were more difficult to implement than countries had understood when they made them. The rules of world trade are now enormously complicated, and they are difficult for all countries to implement and individual Ministers to grasp and negotiate. The agenda is now extremely complex and extended in scope.

The argument that we advanced prior to Seattle—I made a speech to this effect in early 1999 at the UN conference on trade and development—was that if world trade rules were unfair to developing countries, the only way to make them fairer was to have another trade round. My mother would have said that we would be cutting off our nose to spite our face if we said that we would not have another trade round because the rules were unfair. A lot of work went into building momentum so that developing countries, rather than feeling hurt and aggrieved by the consequences of the Uruguay round, would agree that another trade round was in their interests. The South African Government have played an important role in building an international coalition of developing countries. They started their efforts in the run-up to the Seattle conference and continued that work on the way to Doha.

To help developing countries to advance their interests, my Department announced—in 1998, I think, during a prime ministerial speech at the WTO in Geneva—a big increase in UK funding on trade capacity building. That is not a large part of development aid spending, but it is important technical work that enables countries to consider economic strategies—to see in which sectors they have a comparative advantage that will enable them to expand their economy and take up trading opportunities, giving them the capacity to enter the international system and negotiate to advance those trade interests. We have done a great deal of work in that area. It helped many developing countries to build the confidence to advance their interests at Doha and demand the sort of development agenda that was agreed there.

We also worked hard—this is an interesting story, which answers one of the questions from the hon. Member for Meriden (Mrs. Spelman)—to build a legal advisory

19 Jun 2002 : Column 293

centre in the WTO to provide advice from trade lawyers to the poorest countries free and to low income countries extremely cheaply—a law centre to enable low income countries to exercise their rights under the rules of the World Trade Organisation. When we tried to promote the proposal early on, we met massive resistance, first within our own Government, which we overcame in the ways that I described earlier. [Interruption.] It is all part of a process to get everyone to globalise their minds and look for a way of running the world that takes account of everybody's interests. It is a movement that is taking place in political analysis across the world, rather more rapidly in some places than in others.

Then we encountered resistance in Brussels, where we were told that we could not give countries money so that they could get advice, which might mean that they would take action against an EC country under the WTO. I said, "We give legal aid to murderers." There was a ferocious battle. It was interesting to see the two mindsets on trade. Do we want a rules-based, fair system under which everyone can apply the rules and has rights? Trade lawyers cost a fortune. Anyone who thinks lawyers are expensive should look at the bills of trade lawyers. Poor countries would be unable to exercise their legal rights without some support.

The resistance to setting up a legal advisory centre was an interesting example of the way in which people regard trade as their vested interest against someone else's vested interest, as opposed to our joint interest in growing the global economy and giving the poorest countries the chance to grow their economies, which is not against our interest. It is in our interest. If the poor of the world had the capacity to consume more, the people employed in industry and manufacturing in this country would have opportunities to produce and export, which would be beneficial to them and everyone else.

Mr. Patrick McLoughlin (West Derbyshire): As usual, the Secretary of State is being honest and open with the House. Will she tell us which countries caused the most trouble? [Interruption.]

Clare Short: That would be very honest. The hon. Gentleman knows, as I do, that it is incredible that the world reaches agreement by consensus in the global negotiations that are more and more important to us. The "globaphobes" attack all those intergovernmental meetings and say that there is no proper democratic accountability, but the proper accountability is to each democratic Government's Parliament and civil society. We each send our representatives to global meetings to reach agreement and there are many difficulties on the way, but we frequently make progress. That is remarkable.

We are at a turning point in history. I am not in favour of globalisation, and I am not against globalisation. Globalisation is history, and it is stupid of anyone to be for or against it. It parallels what the industrial revolution meant for Europe—an opportunity to spread technology, trade, economic growth and investment across the world. The question is how we are to manage it and who will benefit. Will everyone be included or are some countries to be marginalised? It is one of the leading tasks of politics to bring about a more just world and a more sustainable and stable world for future generations.

19 Jun 2002 : Column 294

The first big, violent outing of the anti-globalisation protesters was Seattle, where they called on everyone to oppose trade and claimed that poor countries cannot afford to open their markets and do not want to be exploited by multinational capital. They said that the WTO is dominated by multinational capital trying to impose its rules on the poor of the world. That was the rhetoric. There were massive demonstrations, with many legitimate groups on the streets, as well as the groups that went around smashing up windows in Seattle.

I believe that after Seattle, if one had gone down most high streets and spoken to decent, caring people, most of them would have said that the WTO is an evil organisation that is trying to exploit the poor of the world. It is a danger of these times if the anti-globalisers are seen to be the ones who care about the poor. They advocate policies that will harm and divide the world and harm the interests of developing countries. That is why our own dear development NGOs' move to calling for equitable trade, instead of opposition to developing countries opening their markets to trade or having the opportunities to attract foreign direct investment, is a very important change. It puts the UK in a strong position to advocate for a more just, equitable and sustainable world.

I pay a tribute to the spokesperson for the Liberal Democrats on trade and industry. He has written a pamphlet or small book on globalisation. At the time of the Seattle talks, he was speaking strongly—the right hon. Member for Skipton and Ripon was another, but there were not many others—in the spirit that I am putting before the House, which I think now has cross-party consensus. This is an important day and the unity in the country is important. The shift of development organisations is important.

I shall say a word on behalf of Mike Moore, the retiring director general of the World Trade Organisation. One of the reasons for the Seattle talks going wrong was the delay in agreeing who should take over that post—whether it should be Mr. Supachai or Mike Moore. After a long delay, during which we should have been preparing for the Seattle talks, there was an agreement that they should divide the job, I think for three years each.

The two men have worked well together. Mike Moore worked extremely hard to get us to Doha and to the Doha development agenda. In the past few days I read a savage attack on Mike Moore in a newspaper. It came from Kevin Watkins, of all people, from Oxfam, who is usually a reasonable person. He suggested that Mike Moore had no concern for developing countries. That is completely false, untrue and unfair. Mike Moore worked hard to enable the world to reach a consensus. I pay tribute to him and to the incoming Mr. Supachai. They have worked well together and they will take the world forward.

I am optimistic because it is possible to take on complex issues when we do not have agreement in our own countries. It is necessary to arrive at global agreement if we are to take the world forward. In a relatively short period we can see a big shift in public opinion. If these moves can be made, we can take ourselves forward into an era of better management of the global economy.

After Seattle, we were working with the World Bank to ensure that the bank took more interest in trade and the need for developing countries to make advances in trade access to improve their economic position. There was

19 Jun 2002 : Column 295

slowness and reluctance, but since then the World Bank has undertaken more work and produced the statistics that are quoted about how trade opening and trade liberalisation would be much more beneficial to developing countries than increases in overseas development assistance, although we need that to create institutions in developing countries that will enable those countries to run their economies and public services properly, and then to take advantage of trading opportunities and the opportunity to move their economies forward.

The considerable task that remains is to move the world forward into implementation of the agenda that was agreed at Doha. On the way to the world summit on sustainable development, which will take place at the end of August into the beginning of September at Johannesburg—that is 10 years on from the Rio UN conference on the environment—a preparatory meeting took place recently in Bali. It was the cause of great derision. Happily I did not go to Bali, so I do not have to be criticised. I have been there under my own steam, having paid for myself. The meeting went sour, but that did not mean that it was a disaster. It went sour largely because the G77, having seen the action on steel tariffs and the US Farm Bill, is ceasing to believe that the world meant what it said at Doha and then at Monterrey about finance for development.

We have been building up a fantastic consensus throughout the world, from the millennium development goals to the UN millennium assembly. At Doha, there was a round of talks to make trade rules fairer. At Monterrey, finance was discussed, and what would be a sensible reform agenda for a proper balance between the public sector and the role of markets. There was a commitment to a reversal in the decline in development assistance that is available to the world.

We want to go on to Johannesburg to integrate the environment in the analysis and to overcome hostility between OECD countries, environmentalists and developing countries. Instead of environmentalists saying, "We don't want development", we want them to say, "We want sustainable development, and we must guarantee development to the poor in a way that is sustainable for the world." That is the only way that we will keep the world united.

Our commitment to implement what was agreed at Doha is absolutely crucial if we are to keep the sort of consensus that we have been building to drive forward progress towards a more just world. That will not be easy. As I am sure that hon. Members know, it was very difficult for France to agree to the commitments made at Doha on reduction of subsidies and reform in the agricultural sector. It held out until the end, and that was the most difficult part of the agreement. Changes have taken place in the US and some of our European Union colleagues have difficulties with holding to what was agreed at Doha.

We now have a fantastic consensus in this country, but we need to appeal to all our parties in all our networks throughout the world and to all the NGOs and faith organisations that are mobilised so impressively here today. We need to ask them to reach out to their networks in Europe and especially in the United States. Through the Church networks in particular, they need to say to the United States, the biggest economy in the world, "Please don't think that you can run the world without multilateral

19 Jun 2002 : Column 296

rules." To achieve a just and sustainable world, we need the US to work with other countries to give everyone the chance to grow their economies.

There is a lot left to do, but this is a very important moment for the UK to have built the sort of agreement that we have got. It now suits our country very well for us to go out to bat on the world stage for more just rules for trade and in other areas, in order to make the world safer and more sustainable and decent.

Next Section

IndexHome Page