STWR - Share The World's Resources

Patrick Wintour and Larry Elliott

EU must end world poverty to win respect

The EU should win over critics by abandoning protectionism and taking the side of campaigners fighting to secure justice for the developing world, the trade and industry secretary has told the Guardian.

In an interview Patricia Hewitt - one of the most pro-European members of the cabinet - admitted that the European cause had suffered because the EU often appeared more interested in protecting rich countries than helping poor ones.

"Europe is not popular now," she said - but the EU, usually seen as a byword for agricultural selfishness, could instead take the lead in the battle for trade justice.

"If Europe can be seen to be turning outwards, really seizing the moment, delivering trade justice and hope to millions of people in poverty, then Europe can make itself more popular at home," she said. Ms Hewitt, who is likely to play a vital role in winning over a sceptical British public in any referendum on the EU constitution, said that at present the EU lacked a sense of idealism.

"My parents' generation saw Europe as a real beacon of hope that offered peace and prosperity to a continent that had been devastated by war," she said.

"That sense of idealism about Europe that drove the founding fathers means nothing to the younger generation. Europe needs to recapture a sense of idealism and represent something more than raising living standards and quality of life".

"Trade justice, development and ending world poverty is a way the EU can win people's hearts."

Trade issues were highly technical, involving "going through volumes of tariff schedules", but "the idea of trade justice and a world trading system that is fair as well as free - those are simple value-based principles".

Developing countries needed three things to help them escape poverty: aid, debt relief and trade. "We must not let trade be the weak link."

"Our goal is a world without tariffs and quotas, but the developed world has got to get there first and get there quickly."

One person with the power to help make that happen is Peter Mandelson, a former holder of Ms Hewitt's cabinet job and now the EU commissioner charged with speaking for the EU on trade. His role is crucial since trade is one of the few areas where the EU acts as a single body rather than a collection of nation states.

Mr Mandelson, Ms Hewitt said, was fully behind her agenda. She also claimed that the new US deputy secretary of state Robert Zoellick understood that open trade made the world secure.

"He is one of those members of that administration that understands the linkage between security issues, poverty and economic development," she said. "He understands we cannot sustain a coalition against terrorism unless we bring people out of poverty and create a just system of world trade."

The next year will be crucial. The Doha round of trade liberalisation talks, launched in November 2001, has made slow progress. Ms Hewitt said 2005 would be a critical year, and she was looking for "substantial progress" by the time trade ministers met in Hong Kong in December. If that happened, there was a chance to complete the round early, "ideally in 2006".

The two big goals are to persuade rich countries to stop protecting their farmers at the expense of poor ones, and to cut tariffs stopping developing countries exporting manufactured goods.

At the moment the trade system meant developing countries were able to export cocoa beans to Europe, but not more profitable chocolate.

'Absurd and unjust'

"Germany and Belgium are two of the biggest exporters of chocolates and processed coffee when they don't produce a single cocoa bean between them", she said. "That is absurd and unjust. It is simple: Africa should be allowed to do the value-added processing and get out of poverty as a result."

This is not an easy message to sell. "Some of our producers will scream blue murder at the idea that we are campaigning for more efficient low-cost producers in Africa or Asia," Ms Hewitt said. The second big problem for developing countries was their inability to get products to market because of a lack of infrastructure - roads, refrigerated lorries - that resulted in excessive waste. "Developing countries need a supply-side revolution as well as trade opening."

Ms Hewitt's answer is to bring in reform gradually. She believes that poor countries need time to liberalise their markets so that they can build up the capacity to export first.

"Where there has been overnight market opening, sometimes with disastrous consequences, it has come at the behest of the IMF and the World Bank, not as a result of WTO agreements."

Hidden tariffs

Following talks this month in India, Ms Hewitt said the other big fear in the developing world was that rich countries would merely swap one form of protectionism for another, replacing tariffs with non-tariff barriers such as ludicrously tough health and safety conditions.

She gave the example of the EU's regulations to ensure that an aflatoxin mould did not grow on nuts and dried fruit. These were far tougher than international standards, but it was estimated that as a result of the EU's rules, only 1.4 extra lives per billion people will be saved.

"The EU does not have 1 billion people," she said. "But these unnecessary rules mean Africa has lost exports worth $670m a year. That's a classic example of protectionism disguised as health and safety."

Nor can she overlook the common agricultural policy.

"Eighteen months ago we agreed as a union to keep, in cash terms, the current budget for the CAP until 2013, and that means the CAP is declining in real terms - so now we have to make sure it is now spent on things other than export subsidies".

It may be a tough battle. Last June the EU agreed to begin scrapping export subsidies as part of the Doha round. But, she admits, "we have not yet named one".

First Published: Monday January 24, 2005 The Guardian Newspaper.

Subscribe to this comment's feed

Write comment