Charlotte Denny Tuesday July 15, 2003 The Guardian
Backbench MPs warned Patricia Hewitt that deadlocked global trade talks could end in a repeat of the disastrous Seattle meeting unless Europe drops demands for negotiations on new issues such as investment.
With less than two months to go before the World Trade Organisation's next meeting in Cancun, MPs on the international development committee said Europe should stop forcing its priorities on to the agenda against the wishes of developing countries.
"The chances of a genuine development round being delivered and of Cancun being a success are not improved by overloading an already overcrowded agenda," MPs said in a report published yesterday.
MPs urged Europe and the US to live up to their promise that the new round will be good for development by focusing on the key issues for poor countries. Without substantial cuts to farm subsidies and an end to the deadlock over imports of cheap copycat drugs, MPs warned that the Cancun talks could collapse.
"Much is at stake: the development prospects of half the globe, international security, multilateralism and transatlantic relations," the report said. "So far, the signs are not good."
The European commission wants greater access to the developing country markets for EU firms to offset the pain of curbing its farm subsidies in the new round.
But with half of the WTO's developing country members opposed to the new issues, Europe's strong support has put Britain in a difficult position. Last month Ms Hewitt promised the UK would put the interests of developing countries first in the new round.
Privately, Whitehall officials say Britain no longer wants talks on investment and competition but is unable to break ranks with Brussels. "There is no way we could go against the EU now," said one official.
The MPs welcomed statements by Lady Amos, the new international development secretary, that investment was no longer a priority for Britain but urged her to persuade the rest of Europe to drop the issue.
"These issues are not wanted by most developing countries. And it is questionable whether the WTO is the right forum for agreements on investment and competition," the report said.
MPs rejected calls by some lobbyists for a halt to trade liberalisation, saying that trade was an important route out of poverty for many countries. The report calls for "cautious liberalisation" rather than the wholesale sweeping away of trade barriers that many countries were forced to implement by the World Bank and IMF.
Developing countries are becoming frustrated with the lack of progress on issues such as access to medicines and cutting farm subsidies, which were to be decided ahead of Cancun. Washington has so far vetoed attempts to find a compromise over cheap drugs.
"US opposition to an agreement on patent rights and public health puts Cancun and the whole 'development agenda' at risk," the report said. It attacks Brussels' recent overhaul of the common agriculture policy, warning that the switch to paying farmers for protecting the environment was unlikely to curb the mountains of subsidised food Europe dumps in developing countries.
"Market distortions produce a wasteful, warped world in which millions of people are unnecessarily trapped in poverty," the report says. "The recently agreed CAP reform will not tackle directly export subsidies, and will fall far short of stopping the dumping of EU surpluses."