Ann McKechin MP

Labour Member of Parliament for Glasgow North

Trade Justice - 23 June 2003

I welcome today's debate on a subject that, sadly, receives very little time in this Chamber; indeed, it would largely be ignored without the tremendous effort of the many people throughout the United Kingdom who support the Trade Justice Movement. Sadly, despite the urgent and pressing need for widespread reform of our own trading policies and a truly development-led settlement, the prospects for a meaningful agreement are currently bleak.

In February, I had the pleasure of being part of the British Inter-Parliamentary Union delegation to the World Trade Organisation parliamentary conference in Geneva. For me, that event symbolised a number of the issues that are blocking real progress. Unfortunately, the United States has withdrawn its membership of the IPU and accordingly did not participate. The US Government has a political philosophy that is generally suspicious of multilateral agreements. They have placed increasing emphasis on securing bilateral agreements where it is clear that they will always hold the upper hand. If the current talks fail, the route back to bilateral negotiations is already being marked out.

Many EU member states appeared defensive about their own policies. In fact, some argued bare-faced that, because of their own economic problems, the developing world would have to wait before the EU could make further concessions on CAP. That is not very comforting for a country the majority of whose population is living on less than a dollar a day. The developing nations were exasperated and hostile about the lack of progress, and the WTO gave every impression of being completely uninterested in engaging in any form of parliamentary scrutiny or accepting criticism for the growing fault lines among member states.

How can we make real progress? As the Minister confirmed this afternoon, it is certainly not in the interest of developing countries to return to a system of bilateral trade agreements in which they will always be the junior player. Under that system, the hope of comprehensive reform of either the CAP or US subsidies will rapidly vanish. A multilateral system should offer the best opportunities for change and development, but, rather than every player hanging on to their vested interests, it needs to operate on a basis of trust and with political will to reach agreed goals.

The current round of negotiations has been termed a "development round", but there is no consensus on how development is defined, or on the process by which the details of that hugely complex group of negotiations is supposed to fit round it. Unlike the International Monetary Fund and the World Bank, the World Trade Organisation has not incorporated the UN millennium development goals as integral to its own doctrines. If development is truly the ultimate objective, rather than just an add-on benefit of reducing trade barriers, the WTO needs to consider a much more radical reform of its own agenda.

The test for a rule or proposal to be considered by the WTO should not be whether it is "trade-distorting", but whether it is "development-distorting". Many less developed countries quite rightly feel that they have been let down badly in previous trade deals. While they agreed to open their doors to our goods and suffered from our subsidised dumping, the richer nations were largely shielded and successfully clung on to their trade barriers. At the same time, the world prices of many basic trade commodities, such as coffee or bananas, have slumped, with disastrous effects on the economies of poor countries. The developing countries are understandably much more reluctant to make any further concessions unless they can achieve significant concessions from the west this time.

There is, frankly, an increasing difficulty in achieving trade-offs in all sectors, and we need to consider whether the present round of negotiations should be the last permanent round, followed by a period of review and consolidation. As yet, there is no formal requirement for the WTO to review its own policies to determine which ones contribute and which detract from the goal of development. Currently, once commitments are made, it is virtually impossible to withdraw from them, however injurious they are to a nation's economic development, without severe penalty. Given the fractious atmosphere in which the current negotiations have been conducted, there is also a need to examine the scope and mandate of the WTO. There are key world trade issues—including, as I said earlier, primary commodity markets—that the WTO is not seriously concerned about. On the other hand, the WTO has become involved in domestic policy issues, such as intellectual property laws, domestic investment and subsidy policies.

The WTO has evolved trade principles such as non-discrimination, most favoured nation and national treatment, which were correctly derived in the context of trade in goods, but there is no clear evidence or political consensus that the application of those same principles to areas other than trade will lead to positive development outcomes. Just about every developed country, including our own, expanded initially on the basis of special treatment for its own industries and Government procurement. The benefits of investment and procurement liberalisation are not likely to outweigh the disadvantages unless there is sufficient strength within the domestic economy itself and sufficient capacity to regulate foreign investment and adequately to enforce that regulation. Liberalisation, as the Government to some extent acknowledge, should not be pursued automatically as an end in itself. What is much more important is the quality, timing, sequencing and scope of liberalisation, and how the process is accompanied by other factors. Only last week, African Trade Ministers, meeting in Mauritius, issued a statement that referred to "the complexity and importance of the Singapore issues". It also said that the Ministers "note that WTO members do not have a common understanding on how these issues should be dealt with procedurally or substantively. Taking into account the potential serious implications of these issues to our economies, we call for the process of clarification to continue".

Those are clearly very different views from those held by our own Government and other western countries, but I hope that, instead of forcing that part of the agenda forward now as part of a settlement this year, we will engage with the concerns of the developing world and consider a more appropriate mechanism to deal with those matters in a systematic manner. I know that our Government, who have taken the lead in so many development matters, will fight hard for a successful outcome at Cancun later this year and I urge them to focus their negotiating priorities on agricultural and non-food tariffs and on reaching agreement on the supply of vital drugs for AIDS, TB and malaria so that we can achieve a better world for future generations.


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