Westminster View – Fair Trade

I am delighted that due to the great efforts of many people in Chelmsford, we have now been named a fair trade town. This is a fantastic achievement which we should all be proud of.

I am very supportive of the broad aims and objectives of the Make Poverty History campaign and the fair trade movement. They have certainly made a very important contribution to placing these issues right at the top of the political agenda. It is important to present a united British front to tackling the problems of Africa so the Conservative Party are supportive of the aims and objectives of the millennium development goals and we are committed to British development work overseas.

Nevertheless, it is important to note that increasing aid budgets alone is not sufficient: Africa needs trade. To maximise the benefits of trade, international trade needs to be both freer and fairer. I understand that this cannot happen immediately, but the Conservatives are committed to working towards genuinely free and fairer trade by supporting developing countries and less-developed economies through the transition period.

It is clear that international trade has lifted millions of people out of poverty, particularly in China and south-east Asia. Tragically, however, sub-Saharan Africa has not only been left behind, but its share of global trade has declined from 6% to just 2% in the past 20 years, despite significant levels of aid.

The economic benefits resulting from greater openness and freer trade are immense. Countries across the globe have benefited through trading, which has led to faster growth rates, cheaper imports, new technologies and stronger political ties, as well as increased security. Protection for developed countries at the expense of the developing world must come to an end. For every pound in aid that rich countries give to poor countries, the poor countries lose £2 through protectionist barriers. It is clear that opportunities for international development are being restricted by western protectionist policies. As the World Bank has said: “Current trade restrictions are the biggest impediment to economic advancement and poverty reduction in the developing world”.

This is a critical time for the UK to play a role, particularly as we take over the presidencies of the G8 and the European Union. The Government have a duty to use their influence to promote freer and fairer trade in the developing world. The EU and US should allow poor countries tariff-free access to our markets for raw materials and added-value products, thereby ending tariff escalation.

I support much of what the trade justice lobby has done in bringing fair trade to the top of the political agenda. Protectionist measures that shelter some EU and US farming products are not free and fair trade. The trade justice lobby believes that fair trade requires some protectionism on behalf of developing countries. However, high levels of infant industry protection, including total bans on competing imports, particularly in the absence of offsetting incentives to exports, are extremely inefficient.

We must also recognise that much of the poverty across Africa is a result of economic mismanagement, misrule, corruption and the misguided ideology of certain African rulers. The failure of many African countries to establish good governance, the rule of law and economic stability has clearly contributed to poverty and suffering. To arrest that trend and lift populations out of poverty, African Governments must create the conditions in which a market economy can develop and thrive: the rule of law, stable Governments and the establishment of private property rights.

The level of poverty around the world is unacceptable. Nearly half the world’s population live on less than a dollar a day. One billion people do not have access to clean water; 100 million children do not go to school and 40 million are suffering from HIV/AIDS. We have a moral duty to take action. Trade, both free and fair, is the best means of alleviating poverty in a sustainable way in the developing world.