John’s speech in the House of Commons Fair Trade debate
25 June 2003

Mr. John Battle (Leeds, West): I welcome the title of the debate; it is fresh and new. It is not often that a title of a debate in the House is "Fair Trade". For hundreds of years, we have constantly talked about free trade. The ultimate free traders were the Liberals, when they were in power—hundreds of years ago. For nearly 20 years, we heard nothing but free trade from the neo-Conservatives, the new right. I welcome the fact that we are all fair traders now and that we are campaigning for managed trade. We should be asking: how is trade to be managed and who manages it? If we can find consensus on that in this place, the debate will have moved on significantly and in a helpful way for the 21st century.

When I first worked on development in the 1970s, someone sent me a cartoon. It showed a man holding a teaspoon to a peasant's mouth. On the teaspoon was the word "Aid". The man's other arm was around the peasant's throat, in a stranglehold grip. Emblazoned on his arm was the word "Trade". Sadly, nearly 30 years later, we have hardly moved on enough to realise that the grip on the windpipe is the trade processes that undermine any increases in the aid budget. That Mexican cartoon rings just as true today.

The campaign for increased overseas aid has taken on a new dimension. It has shifted so that it includes a focus on the unfair workings of the trade system. The Trade Justice Movement is to be congratulated on achieving that nationally; it includes many bodies, non-governmental organisations and faith communities, such as CAFOD, Oxfam, the World Development Movement, Christian Aid or the Save the Children Fund. They are all to be congratulated on shifting the focus and on getting across the message that trade relations are as crucial to long-term sustainable development as any aid. There is no trade justice in a world where 800 million go hungry. The trade system is not delivering for the poor. The trade system is unfair; it is weighted in favour of the rich countries and its massive in-built global imbalance is likely to continue unless action is taken to give the poor a break into the system.

It is to the credit of the Government that they recognised the need to tackle unfair trade. In 2001, they published a helpful pamphlet, "Trade matters, eliminating world poverty", which acknowledges that trade can be a force for development, but only if it is fair and works for the whole world, not just for rich countries and—I would add—multinational companies. Central to the Government's development policy is a commitment to the internationally agreed target to halve the proportion of people living in extreme poverty by 2015.

Yes, the Government also have positive targets on basic health care provision and universal access to primary education. Yes, there has been some progress. Yes, there has been a welcome increase in the aid budget, ending a decade of cuts imposed by the Opposition when they were in Government. However, any current analysis of progress towards the millennium development goals shows that, on current trends, there is hardly a cat-in-hell's chance of halving poverty by 2050, never mind by 2015, unless there are radical changes in the trading system and in debt as well.

Tragically, many poor sub-Saharan countries are struggling their way up an overwhelmingly down-moving escalator. The situation is getting worse for most sub-Saharan countries. Take health—some 7 million people still die every year from preventable diseases. Take education—more than 115 million children do not go to school, and 88 countries are nowhere near achieving the targets in education, to give but two examples. So without radical changes in the unfair trade balance, real and welcome increases in the aid budget will make hardly any impact on development.

The preparations for the WTO round in Cancun in September—labelled the development round—have hardly got anywhere so far. They have not heralded much progress. Discussions on agricultural trade reform—a basic building block for any fair trade system—are well behind schedule. There are no signs of progress in dismantling the massive subsidies, which many other hon. Members have mentioned, that go to American and European agricultural production. The American Farm Bill and the European Union common agricultural policy subsidies are being reinforced and strengthened, rather than being dismantled.

Yes, to our credit, the Government are pressing for genuine CAP reform, dismantling those subsidies that keep developing countries' products out of Europe. In practice, those subsidies are generating a huge system of agricultural dumping. That dumping is occasionally dressed up under the heading of food aid or other aid, but it ensures that agriculture in poor countries has no real chance of getting off the ground. In effect, it is being killed off by dumping. EU Tomato paste is sold cheaply in Ghana and subsidised EU dried milk powder is destroying the Jamaican Dairy Farmers Federation, to give two practical examples.

While we press for CAP reform, let us not press on developing countries methods of change that we have not adopted in the past. Let us not say, "Do as we say, but not as we did." Let us not say, "You liberalise, while we continue to subsidise." I shall give a quotation from the US-based National Law Centre for Inter-American Free Trade:

"The historical record in the industrialised countries which began as developing countries demonstrates that intellectual property protection has been one of the most powerful instruments for economic development, export growth and the diffusion of new technologies."

That is classic, so let us not ask developing countries to move faster than they can. They need managed trade, but in the context of what they can achieve; otherwise, in the words of one great writer on these matters, we are simply "kicking away the ladder" and leaving developing countries with no chance at all.

Finally, I recommend the Chancellor's International Finance Facility. That is the way to get investment into the developing countries quickly, effectively and for the longer term, rather than by being jumped into a new framework. My hon. Friend the Minister referred to "an appropriate framework", but let us take up the Chancellor's proposal on the international finance facility as one means to put in more investment quickly. Perhaps the WTO could take a leaf out of this debate. I close with this remark: as well as adopting the millennium development goals—getting into line on development would cost the WTO nothing—why does it not change its name? Instead of being the World Trade Organisation, why does it not call itself the fair trade organisation? In the meantime, we have much work to do.