The Rt. Hon. Patricia Hewitt

Statement to the House of Commons on the WTO Ministerial Conference at Cancun

The UK delegation included my hon. Friend the Member for Putney (Mr. Colman), who represented the Select Committee on International Development, as well as representatives of the CBI, the TUC, the Consumers Association and the UK Trade Network. I warmly welcome their participation and thank them for their work.

The conference was attended by delegates from all 146 members of the World Trade Organisation, accompanied by many thousands of parliamentarians and civil society organisations as observers. On the opening day, we welcomed the accession of Cambodia and Nepal.

The British delegation worked hard to help to secure an outcome that would meet the needs of developing countries. Ministerial colleagues and I met a large number of representatives from those countries, and we ensured that their views were reflected when we met the United States and EU colleagues and others.

The conference was the WTO's opportunity to restore momentum to the Doha development round, which was launched with such high hopes in November 2001. It is with great regret that I must report that we were unable to reach an agreement. Talks broke down on the final day.

Before the talks ended, however, Commissioner Lamy, on behalf of the European Union, offered to abandon completely negotiations on two of the so-called Singapore issues-investment and competition-which was a position that the British Government fully supported. Many other WTO members also signalled a willingness to be flexible on various issues. With more time, I believe that it would have been possible to reach agreement.

Failure to reach agreement at Cancun is a serious setback for the Doha round, but it is not the end of the round or the WTO itself. In anticipation of Cancun, we had already reached agreement, which was overdue but welcome none the less, on access to medicines for developing countries. That agreement stands and must now be built on, especially through the global fund to fight HIV/AIDS, tuberculosis and malaria.

In June, the Agriculture Council of the EU agreed significant reforms of the common agricultural policy. The reforms will mean substantial cuts in the trade distorting support and export subsidies that we give to our own farmers, which do so much damage to farmers in the developing world. The EU has already offered, in principle, to phase out export subsidies on products of particular interest to developing countries. The agreement on CAP reform was, of course, not conditional on agreement at Cancun.

We also saw at Cancun the formation of the G21 and other strengthened developing country groupings. I wholeheartedly welcome the emergence of this stronger voice for poorer nations. Indeed, the Government has led the way on helping developing countries to build their negotiating capacity. We have given £110 million to trade-related capacity building and technical assistance since 1998 and an additional £50 million was announced by the Secretary of State for International Development last week. Furthermore, at Cancun itself we made real progress in discussions on agriculture and other vital issues. There is no doubt that we were closer to agreement at the end of the Cancun conference than we were at the beginning.

We now need to lift our sights once more to the prize that is on offer, particularly for developing countries, if we can get the round back on track. The Cancun conference agreed a new deadline of 15 December to try to resolve the issues that we could not sort out at Cancun. I have already spoken to the director general of the World Trade Organisation, Dr. Supachai, about how the United Kingdom can help to drive that forward.

The final ministerial statement of the conference urged that those renewed discussions be based on the concessions that delegates offered at Cancun and not on their earlier positions. In the case of the European Union, that means that we should accept that, despite our continuing commitment to encourage and to facilitate direct investment in developing countries, WTO agreements on investment and competition are off the EU's agenda.

The International Monetary Fund and the World Bank announced in Cancun a new initiative to help developing countries to overcome problems in adjusting to a more liberal trading environment. I warmly welcome that. The UK Government will make a substantial input to the design and implementation of the initiative.

In the wake of Cancun, it is, I am afraid, inevitable that more emphasis will be put on regional and bilateral trade agreements. Although those could help to promote south-south as well as north-south trade, they risk excluding many poorer countries and leaving others isolated in negotiations with far larger countries. We continue to believe that the multilateral system should be the cornerstone of world trade rules.

All WTO members now need to reflect on the lessons to be learned from Cancun and to find ways of improving processes. We also have to address the issues of substance that prevented agreement at Cancun. We shall discuss how best to make progress on all those matters with our EU partners, the European Commission and others, taking particular account of the views of developing countries.

This Government is determined to do all we can to help to deliver a development round in line with the promises that we made at Doha. All countries stand to gain, but the poorest stand to gain the most. That is why we support the round and will continue to work for its success.