Mr Speaker,
I rise before the House today to make a ministerial statement regarding this government’s policies towards ensuring fair and responsible trading practices are embedded at every stage of the UK economy. This ministerial statement is to update the House on this government's policy regarding the promotion of free and fair trade, to deliver a stronger world economy in the interests of the people of the UK, developing economies, and all those who depend on global trade for their prosperity and livelihoods. Under this government, we are seeing an increasingly holistic approach to development, one that recognises the importance of not just development aid, but also of trade and the reform of international economic institutions. That is why ministers for international development and ministers for economic policy are today coordinating to a heretofore unprecedented degree.
Mr Speaker, the first policy on which I would like to discuss with the House is the Everything but Arms initiative of the European Union. The European Union’s ‘Everything but Arms’ initiative is one of the shining lights of European trade policy. It is, in my eye, an emblematic example of how trade and economic opportunity can be used to achieve tangible economic benefits. By allowing the least developed economies of the world duty and quota-free access to European markets, it has strengthened economic and sociopolitical ties; provided the foundations for long-term mutually-beneficial economic growth; and allowed many of the world’s most disadvantaged individuals a chance to gain from the fruits of global trade. By maintaining restrictions on the arms trade, it helps countries diversify their economies and avoid becoming dependent and entangled on an industry that often carries with it severe externalities.
It is an easy way to help rectify the historical injustices these countries have endured, to break the stranglehold of protectionism and economic stagnation, and to transform foreign aid investments into long-term economic sustainability. We should begin to view trade liberalisation, and opening developed markets for the developing world, as an integral component of our international development strategy. Giving preferential trade access to the developing world is a fine way, and a free way, of meeting our obligations to help them develop, and remove the obstacles that stand in their way.
However, there are areas where we can do more. As such, this government will now be taking every step possible to promote and advocate for five reforms, including by lobbying the Commission and working with other national governments. Firstly, that more countries should receive preferential treatment. Developing economies, that have risen above the level of least developed country, can still benefit from generous quota and duty reductions. The benefits afforded to these more successful countries could at first be more modest, to preserve the degree of advantage given to the least developed countries, but the long-run objective should be to bring the doctrines of free and fair trade into harmony, to show them as complementary rather than adversarial, to allow the world’s poorest, wherever they live, access to the global economy.
Secondly, not every community is equipped to join the global community. Some lack basic infrastructure. Some lack human capital. Foreign aid and investment should be recalibrated, to prioritise these communities, to give them the means to make the most of global economic opportunities and ultimately to thrive without dependence on aid. The budget’s increase in foreign aid spending will help towards this goal, and we will work with other nations in order to implement this change in culture to the best of our ability. This is something we can do unilaterally, however, and we shall be doing that.
Thirdly, arms were excluded from the abolition of quotas and duties because of the devastating social impacts of those markets if left unchecked - we should look to ensuring that industries and sectors that threaten similarly high costs are not unduly encouraged by EBA. Industries entangled with serious and legitimate concerns about human rights and environmental repercussions must be monitored and trade assistance to those industries assessed. The UK sounds ready and willing to provide the technical support needed to conduct those monitoring and assessment activities, and to assist in plans to move away from such industries or reform them in a way to mitigate those impacts. Again, there is much we can do on that front unilaterally, including by directing some of the increase in development aid appropriately.
Fourthly, barriers to trade exist beyond quotas and tariffs, and the EU and its constituent countries should do what they can to remove such barriers - including providing compensation for such barriers when they cannot be removed outright. We will use development aid to support developing countries in overcoming such hurdles and meeting high technical standards that can threaten their export industries. Finally, country of origin rules, thanks to the complicated nature of global supply chains, mean that many more advanced and fruitful industries often do not fall under the aegis of the EBA. Such rules should be modified to address this.
The second policy area on which I shall address the house today is certification. This government has an obligation to promote certification efforts to prevent conflict materials and fight deforestation, poaching, and international smuggling. This is not just a manifesto commitment, but also a moral obligation, an essential first step to stamping out these issues. As a first step, we are officially submitting our candidature to join the Extractive Industries Transparency Initiative, to meet good governance standards in oil, gas and mineral resources industries.
We will also be working, primarily with our European Union partners, to pursue reform of the Kimberley Process. The Kimberley Process is a certification process to prevent conflict diamonds entering mainstream diamond markets, but the growing criticism of NGOs such as Global Witness is cause for concern. We will also be reviewing the EU FLEGT Action Plan on addressing illegal logging, which we believe to be a great initiative but we are sure more can be done. We will be consulting on reforming procurement and export support policies - such as the practices of UKTI - to promote the efficacy of fair trade and promote the efficacy of certifications.
In order to ensure a fair trading infrastructure globally going forward, it will be the official and public policy of the United Kingdom to, both as part of the joint European trade negotiating team and through our own efforts, promote fair and effective reforms to the current trading system. These reforms must address the inequities and inequalities of the current trading system while recognising that free trade is a political, moral and economic imperative. We will officially call for an international body, ideally under the auspices of the WTO but wherever possible bolstered and supported by British expertise and assistance, to provide guidance on how to enforce and design good contracts, develop fair auction procedures, and provide model laws in areas such as polluter-pays, trade adjustment assistance and fair resource and land usage. The purpose of this body will be to help every country develop the necessary institutions to not just interact as seamlessly and frictionlessly as possible with global trading networks, but also to have the internal capacities to best manage the challenges and utilise the opportunities created by the transition towards free trade.
We will support stronger measures to restrict, and ultimately end, tariff escalation, where raw materials are governed under the norms of free trade but value-added products are subject to undue protectionism. We will support the establishment of impartial international tribunals, again ideally using existing international structures as an organisational starting point, to provide impartial assessments of the legitimacy of dumping duties and technical and non-tariff barriers to trade and the externalities of bilateral trade deals and environmental policies, and to promote reviews and reforms of TRIPS to better allow developing countries to gain access to the drugs and products needed to attend to basic needs such as essential medicines.
We also stand ready to commit to, as government policy, renewing our efforts to fight biopiracy and promote biodiversity, to ensure sustainable and equitable growth and ensure natural resources are not exploited. We will also do what we can to help promote and strengthen the Convention on Biological Diversity, including providing resources and technical assistance in helping developing countries meet these goals and in promoting international cooperation on biological diversity. We will ensure the Nagoya Protocol is implemented wholly and effectively.
To recap, Mr Speaker, this government will be leading the charge on reforms to the Everything but Arms initiative; using increased development aid to support the goals and maximise the efficacy of Everything but Arms; signing up to the Extractive Industries Transparency Initiative; pursuing a review of the Kimberley Process; building on the good work of the EU FLEGT Action Plan; promoting fair trade and effective certification processes in government procurement and export strategy; recognising the moral imperative to take more substantial action on biodiversity preservation and promotion; and pushing for a fairer and more development-oriented common European position within global trading negotiations.
Graham Adiputera (Lib Dem - Sutton and Cheam)
Deputy Prime Minister
Liberal Democrat Leader
Foreign Secretary
Secretary of State for Business, Energy and Climate Change
Secretary of State for Culture, Media and Technology
Parliamentary - 36
Media - 53
Policy - 48
Mr Speaker,
This Government has its heart in the right place, I can see that, but I must press for further details.
Foreign aid has been referred to as 'modern day colonialism' by many in the very countries it is meant to help, for its effect of crowding out the development of local business, thus strangling the ability of these countries to eventually sustain themselves. By flooding developing countries with free products and services, we prevent businesses which could sustainably provide those for the local economy from gaining a toehold and drive them out of business – after all, nobody can compete with free stuff.
Furthermore, Mr Speaker, there is clear evidence that a great deal of foreign aid spending is grossly misused, being used by authoritarian regimes to purchase arms, finance corruption, and shore up political support with handouts to powerful interest groups. Because money is fungible, even if aid money is not spent for these purposes, other government funds are often redirected when foreign aid comes in.
I must therefore ask the Rt Hon. gentleman, what measures will the Government take to ensure that this new injection of foreign aid is spent responsibly – to ensure that it is spent on projects that benefit development without crowding out local business? And how will the Government keep funds from being repurposed for corruption?
The Hon. Emmanuel Runswick-Jones
Member of Parliament for Camarthen West and South Pembrokeshire (2010-present)
Mr Speaker,
I understand the viewpoint the member is espousing and I appreciate the degree of thought and intellectual consideration he has clearly given these issues.
However, I must disagree with the characterisation he has of the foreign aid programmes being talked about within this statement as "flooding developing countries with free goods and services". I urge him to reread this statement as, quite clearly, that's not what we're talking about here. It's a valid criticism of certain food aid practices used by other countries, for example, one I'd agree with, but it's not what is being discussed here. Not at all.
Under this statement, we are using aid to support businesses in those developing countries build up the necessary infrastructure - and gain access to developed markets. There is no "flooding" here, no "free goods and services" being talked about here, and someone who shares the member's concerns should be welcoming this statement fullheartedly, as it prioritises the need to build long-term sustainability of local businesses.
As to the point around corruption, while we are always working to improve the transparency and accountability surrounding aid - and as the gentleman will recall this very statement contains measures designed to promote good governance, something again I'm sure he's applauding - British aid is, overwhelmingly, spent with integrity. I must disagree with the characterisation of it being grossly misused. The current processes, by and large, work, and while they always remain under close scrutiny and review, a vast majority of British foreign aid is spent well.
Graham Adiputera (Lib Dem - Sutton and Cheam)
Deputy Prime Minister
Liberal Democrat Leader
Foreign Secretary
Secretary of State for Business, Energy and Climate Change
Secretary of State for Culture, Media and Technology
Parliamentary - 36
Media - 53
Policy - 48
Mr. Speaker,
I thank the Foreign Secretary for the statement he has provided to the House on the Government's trade priorities. I'll begin my reply with outlining the areas in which the Rt. Hon gentlemen and I find ourselves in agreement. More must be done on cracking down on the illegal arms trade, on prohibiting illegal mining and logging, and in reducing barriers to trade between the European Union and developing nations. While the finer aspects of the Government's proposals on these matters remains to be seen, I do appreciate that the Government is highlighting these areas as matters of priority.
With that said, Mr. Speaker, I must echo the concerns of my Hon. Friend the Member for Camarthen West and South Pembrokeshire. While I share the Government's concern that our foreign aid policy could lead some nations to become even more dependent on assistance from Britain and other developed nations, I remain wholly unconvinced that the Government has a real strategy to address this problem. In his statement the Foreign Secretary acknowledged that our aid to these nations must be "recalibrated," but failed to provide any explanation of what that means. The Foreign Secretary goes on to explain that the Government has increased the foreign aid budget to achieve this recalibration, but again fails to provide any rational as to how this budget increase will result in changing how we allocate the aid. The Government must do more than simply throw more taxpayer money at the problem, and the British public should be briefed fully on how the Foreign Secretary's proposed recalibration will actually be achieved.
The other area I take issue with, Mr. Speaker, is the Foreign Secretary's decision to neglect this opportunity to address much needed reforms to the European Union Agricultural Policy. With the Government proposing significant reforms to other aspects of the EU's trade policy, it's a shame that the Foreign Secretary has missed this clear opportunity to simultaneous bring forwarded needed reforms tot the EUAP. British farmers, particularly those in rural Wales and Scotland, are being crushed under the burdensome regulations imposed by Brussels as a result of the EUAP. The subsidies provided by the EUAP are overwhelmingly allocated to Britain's biggest farms, making it harder for small and family-owned farms to remain in business while simultaneously skewing markets and produce prices. The Foreign Secretary's decision to exempt the EUAP from the focus of their EU trade policy reforms is a mistake, and a massive disservice to British farmers relying on the Government to secure a better deal for them and the communities that rely on their business.
The Member for Camarthen West and South Pembrokeshire summed it up best, Mr. Speaker. The Government's proposal is well intentioned, but as presented fails to achieve the extent of the change needed in both our and the EU's trade policies. The Foreign Secretary seems well intentioned, but his proposals lack the detail and specificity needed to have a lasting impact. These ideas look good on paper, but that's not what matters Mr. Speaker. What matters is how these ideas will hold up in the real world, how they will translate from words into real action. On that front, as we've seen in the past, these proposal from the Government are sorely lacking.
William Croft
Member of Parliament for Bracknell
Shadow Foreign Secretary
Chairman of the Conservative Party
Chief Whip of the Conservative party
Mr Speaker,
If I may turn to the point of the Common Agricultural Policy - the Shadow Foreign Secretary knows my views on the matter. The Liberal Democrat manifesto in the last election contained substantive and workable CAP reform proposals, and those proposals were incorporated into the coalition agreement as per paragraph 8. If the Shadow Foreign Secretary feels so strongly about CAP reform, why did the manifesto he stand on not make any mention of it?
This statement is not - and I need to make this clear - not intended as the be all and end all of this government's programme on international development or on EU trade policy. We are talking about discrete and distinct policy issues here. I am of course committed to CAP reform, but it is fundamentally incorrect to say that this statement suggests we are not interested in CAP reform. I invite the Shadow Foreign Secretary now to accept that he is incorrect to mischaracterise the government's statement in such a way.
How to use these funds will, of course, be an ongoing process. More details will be provided as and when it is appropriate to do so - but we are informing the House about policy changes and priorities as and when they are being made.
Graham Adiputera (Lib Dem - Sutton and Cheam)
Deputy Prime Minister
Liberal Democrat Leader
Foreign Secretary
Secretary of State for Business, Energy and Climate Change
Secretary of State for Culture, Media and Technology
Parliamentary - 36
Media - 53
Policy - 48
Mr Speaker,
I must express my disappointment that the Secretary of State will not be be taking measures to avoid destructive crowding-out.
Going on, Mr Speaker, I must echo my colleague, the Shadow Foreign Secretary, in his concern regarding the Common Agricultural Policy; the Rt Honourable gentleman insists that CAP reform is a priority for the Government, but his colleague the Foreign Secretary only recently confirmed to the House that the Government has, in fact, made no substantive efforts at EU reform of any sort. I am afraid I am unconvinced of the Government's dedication to CAP reform, especially when the left hand has no idea what the right is doing.
Opening up our markets to developing countries is nobly-intended, I dare not disparage my Rt Hon. friend's objectives. But when can British businesses – like farmers in my constituency in Wales – expect some measure of reciprocity in our trade policy?
The Hon. Emmanuel Runswick-Jones
Member of Parliament for Camarthen West and South Pembrokeshire (2010-present)
Mr Speaker,
I will repeat my conviction that the aid policy measures discussed within this ministerial statement support, rather than crowd out, local businesses. It is the explicit intention of the policy reforms made here to enable local businesses in developing countries to gain access to the infrastructure, training and markets necessary to compete globally - as well as in helping support reforms to global institutions that will actually help fight crowding out and prevent goods dumping.
Unless he is able to produce an argument to indicate otherwise, I think the gentleman's concerns about crowding out - while a legitimate criticism of certain overseas aid practices - should motivate him to welcoming this announcement.
Mr Speaker - "my colleague, the Foreign Secretary"? Mr Speaker, last time I checked, I was the minister who gave the answer that the member refers to. I think that might have been a parliamentary first, someone thinking that a single secretary of state is actually two people.
But, Mr Speaker, we have only been in office a few months. The new Parliament and Commission in Brussels are not yet fully settled in. We have been using this time to prepare comprehensive statements on a variety of issues, so we can hit the ground running. But there would have been very little point in negotiating comprehensive reform packages with a Commission President who was nearing the end of his mandate.
And at least this side stood on a manifesto that talked about CAP reform. The Conservative manifesto, let's not forget, didn't use the word "agriculture" once. It didn't mention the word "farm" once. This government stood on clear and transparent plans on these issues, and they take time to implement.
As to the question of reciprocity in trade policy, I am happy to return to actual policy matters rather than having to rebut flimsy attempts at political point-scoring. Through the EU's single market and customs union, recent years have seen a dramatic expansion in the markets that British farmers and producers can export to. This measure is but the first in this government's commitment to free trade and further opening up of markets, and I'm sure in the long-run British consumers will benefit from the more mature trading partners and more global support for free trade that we hope these steps will entail.
Graham Adiputera (Lib Dem - Sutton and Cheam)
Deputy Prime Minister
Liberal Democrat Leader
Foreign Secretary
Secretary of State for Business, Energy and Climate Change
Secretary of State for Culture, Media and Technology
Parliamentary - 36
Media - 53
Policy - 48
