Conservative Party Statement on the Trade Justice Movement

From Andrew Mitchell
Shadow Secretary of State for International Development
House of Commons
18 October 2005

I am writing to outline the Conservative Party’s position on the ‘Trade Justice Movement’ (TJM) ahead of their mass lobby of Parliament on 2 November 2005.

The Conservative Party agree with the TJM that Western protectionism, particularly the European Union’s Common Agricultural Policy and US farm subsidies, should come to an end.

As I said at Party Conference, “protectionism for developed countries at the expense of the developing world must come to an end. It is both immoral and hypocritical. President Bush said we’ll scrap our farm subsidies if you scrap yours. I’d like to see us take him up on that.”

Conservatives want radical reform of the EU’s protectionist Common Agricultural Policy. The CAP costs every family in Britain £400 per year in taxes and higher food prices, and is a direct engine of the impoverishment of Africa. It encourages European overproduction and subsidises exports, thus depressing world market prices and preventing farmers in developing countries from exploiting their competitive advantage. Poor farmers are further damaged by the high tariffs imposed on food imported to the EU.

Following the 2005 election, the Conservative Party committed itself to a timetable for the dismantling all trade distorting agricultural policies by 2013. We challenge the British Government to fight for this agenda in Europe

Free Trade needs to be part of an agenda which includes debt relief, aid and improved infrastructure. A Conservative government would create an Advocacy Fund to provide developing countries with the expert legal and economic advice they need to hold their own in world trade negotiations.

However, contrary to the views of the TJM, we believe that free trade is good for poor people in developing countered (sic) and should be promoted. We also believe that business investment in poor countries is good for the poor, and should be encouraged.

Conservatives believe that free trade is fair trade. We believe that poor people, not their politicians, should be free to choose where they buy their goods and services. If they want to buy cheaper goods from abroad, and spend the money they save on food or medicines, they should be free to do so.

Free trade facilitated voluntary co-operation between people all over the world. It is blind to race, creed or religion. Free trade increases the range of goods available to people. It allows countries to specialise in what they produce most efficiently, thus leading to greater wealth creation.

Protectionism does not aid development. Developing countries with open economies are catching up with rich ones; those with closed economies are falling further behind.

Poor countries need more foreign investment, not less. Private enterprise creates wealth and jobs, and spreads technology. Foreign investment invariably drives up labour standards and improves living conditions. We should encourage companies to invest abroad, not demonise those that do.

We salute the efforts of the TJM for their success in focusing attention on the scandal of Western protectionism in advance of the WTO talks this December. However, it is clear that just as protectionisn is counter-productive for developed countries, it can be equally damaging for poor countries.