JOHN HUMPHRYS: Stephen Byers, you should be arguing for fairer trade rather than freer trade shouldn't you? STEPHEN BYERS: I'd go along with that and I think when we get to Seattle the United Kingdom can play a very constructive role to bridge the divides that that film has just shown and there are many issues where I think we can be very constructive and we can take a lead. HUMPHRYS: Let's take child labour: Free trade means that a country can sell goods made with child labour, what we would define as child labour. You don't actually want to change the rules within the WTO to stop that do you? BYERS: Well we do and we'll be proposing the setting up of a new forum where we can involve both the World Trade Organisation and the International Labour Organisation that has responsibility for core labour standards. We believe by bringing them together we can look at trade liberalisation and core labour standards in the same forum, bringing the two together. HUMPHRYS: Yeah, but that's not saying the same as changing the rules within the WTO. You want a separate clause, you want a separate outfit to put this thing together which isn't quite the same is it? BYERS: Well there's a separate outfit at the moment which is the International Labour Organisation so we have these two bodies......... HUMPHRYS: ..... not as powerful as the WTO in this respect...... BYERS: .... Well there are two bodies - the World Trade Organisation and the International Labour Organisation. The two are quite separate at the moment. We recognise that greater trade liberalisation will have an impact on Labour standards so what we need to do is to get those two international organisations together. We're proposing a standing working forum which will do that so you begin to get people to discuss the implications of increased trade and the effect it may have on labour standards. Now the real difficulty we've got is that many of the developing countries see this development as potentially a protectionist measure to deny them access to the important markets in the West so what we need to do is to take them on board and we think by having this joint group it may be a way of doing that. HUMPHRYS: But a couple of years ago you were quite clear about this in your policy document that accompanied your manifesto, you said ,We will call for a social clause to be added to international trading agreements.' That's not what you're saying now it is? BYERS: Well the issue is how we can achieve that. HUMPHRYS: You were quite clear about it two years ago. BYERS: Well the World Trade Organisation operates on the basis of consensus with a hundred and thirty-four nations in membership. If any one of those objects then we can't go ahead with our proposal so it's not within our gift John to say there must be a social clause...... HUMPHRYS: ....It's your gift to argue for it..... BYERS: We are. We're the ones who actually have taken the initiative. We've got the European Union to agree the idea that the WTO and the International Labour Organisation can work together in this joint forum. We've taken the initiative to do that. HUMPHRYS: Yeah but the point is that some countries want it written into WTO rules, that's the important point isn't it? BYERS: Sure. But you only need one country to say no and the whole thing grinds to a halt. So on the one hand we've got people who are arguing a very fundamentalist position saying we've got to have a social clause in all trade agreements...... HUMPHRYS: ..... which was your position..... BYERS: .... Which was our position but we've got other countries, India particularly is arguing that that would not be appropriate so somehow we've got to bring the two together and the key role that I think the United Kingdom can play in Seattle is to be a bridge between those sort of fundamental positions. I think we can do it over core labour standards in the hope that we can achieve our objective which is to recognise that the two do go together and we can do it in other areas as well. HUMPHRYS: But it is backing away from your original much more hard line position. BYERS: No, it's how we can achieve it in practice and I think being in government shows there are practical means to achieve it, not gesture politics, the easiest thing in the world......... HUMPHRYS: Was that a gesture then in '97? BYERS: No. The easiest thing in the world...a statement of where we wanted to be.... The easiest thing in the world is to say that and continue to say it knowing full well that it cannot be achieved because people will walk away from the negotiating table. The initiative we've taken now bringing the rest of Europe with us to say let's get the two international bodies together in a joint standing forum, that is a way by which we may be able to achieve that objective. HUMPHRYS: Okay, well let's look at the environment. The way the WTO operates at the moment undermines efforts in all sorts of directions to protect the environment, that is the case is it not? BYERS: I agree with that. I agree absolutely. HUMPHRYS: So why therefore are we not taking a tougher line? BYERS: What we need to do, and we're going to be proposing in Seattle as well that we get on the agenda the effect that free trade will have on the environment. At the moment there's a real issue here which is there are these things called multi-lateral environmental agreements and there's the World Trade Organisation rules. I don't think that the rules of the WTO are clear enough in relation to the environmental agreements and one of the things that we want to get on the agenda at Seattle is a recognition that the WTO needs to clarify its own rules in relation to the environment, to be far more supportive and to recognise environmental concerns which do exist. HUMPHRYS: Well you say supportive. Should they not be subordinated, the WTO rules? Should they not be subordinated to international environmental agreements? BYERS: They don't have to be incompatible. I think we can have.......... HUMPHRYS: ...... they are, sometimes they are as you've acknowledged..... BYERS: .... Well at the moment they are and we've got a real problem with the way in which the rules of the WTO operate. I mean I think they're unclear to be honest in relation to how they impact on multi-lateral environmental agreements and one of the initiatives that we'll be taking in Seattle is to say - 'look we've got to recognise that the rules at the moment are not clear enough as far as the environment is concerned. Growing trade potentially could have damaging effects on the environment and so we do need to get it as part of the negotiations.' HUMPHRYS: So you're standing by your position which was, and I quote again from the document, 'we will call for international environmental treaties to be exempt from challenges under the WTO.' That is your position? BYERS: What we'll be saying in Seattle is we need to clarify the WTO rules. HUMPHRYS: It's not quite the same as what I've just quoted you is it? BYERS: If I can explain what we'll be doing this coming week. What we need to do is to clarify the rules of the WTO so that they are not, if you like, more powerful and they can't override the multi-lateral environmental agreements that may be reached as far as particular countries or particular projects are concerned. HUMPHRYS: Right so they will be, let's be quite clear about it, they will be subordinate to them? BYERS: No, I mean I can't predict how the negotiations will.. HUMPHRYS: But that's what you want. I mean of course in every case you can't make any predictions because as you say a lot of countries are involved but I'm looking to explore the British position and our position is that we want the rules to be subordinate to environmental protection. BYERS: I want a member country of the WTO, if they are developing their own environmental approach, to be able to say no to a particular proposal if it conflicts with their own environmental policies. Now we need to find a way of monitoring that because you could get countries using that for protectionist reasons and that's always the problem that we do face. HUMPHRYS: Ah but you see this is the point isn't it. That's exactly the issue here, whenever that comes up the WTO says: yeah, protectionist - can't have it. And the WTO tends to be, as it were, the supreme body in these matters. What you are saying is you don't want that to be the case. BYERS: I want to find a mechanism by which we can arbitrate whether or not there is a genuine environmental concern which then will need to be addressed as opposed to a country that puts up environmental issues but purely as a protectionist measure. Now we need to find a way of arbitrating between the two but the UK government's position is very clear - if there is a genuine environmental case which is made then that should not be overridden by the rules of the WTO. HUMPHRYS: Right, but so long as the WTO is allowed to rule on these issues it will rule in favour of trade won't it. BYERS: Well what we need to do is to ensure that when we discuss these in Seattle that we can make this clear distinction. If it's genuine trade then fine, provided people are not putting up environmental concerns for protectionist reasons but if there is a genuine environmental reason why a country is adopting particular policies, then that should be protected and it shouldn't be overridden by the WTO. HUMPHRYS: Exactly, it can't be left to the WTO because we know which way it would go. BYERS: Well no because what we need to do..this is the rules based approach, we need to change the way in which the WTO will look at these matters. HUMPHRYS: In other words, trim its powers in effect. Putting it very simply. BYERS: No, the important thing to remember about the WTO is that a hundred and thirty-four states are in membership. Any one of them can block a development, it works on the basis of consensus. It is unique in terms of these international organisations... HUMPHRYS: Some are more equal than others. BYERS: I think the big thing we will see in Seattle is a fundamental shift in global politics because for the first time the least developed countries and those developing countries have got their act together, they are going to be confident, they are going to be self-assertive and I think they will be arguing for their own particular policies. It will be the first time we've seen that. HUMPHRYS: Well let's look at how that might then effect food. I mean at the moment it is very difficult for a country, as we have found ourselves, to ban foreign food on safety grounds. I mean we don't like - Europe didn't like hormone stuffed beef coming in from America so we said we don't want that, a great row then with America, America goes to the WTO, the WTO says you can't do that, sanctions and so on. That's not right is it. BYERS: It's got to be a scientifically based approach and that's what we are arguing. And at the moment you are absolutely right again, I mean the WTO is not a perfect organisation and needs to change and one of the things I'll be doing in Seattle is arguing the case for reform and modernisation of the WTO. It's crucial that that happens and one of the things that we need to look at very carefully is the situation where there is conflict over scientific advice in relation to food safety. I mean what does happen for example if the American scientific advice is that something is safe, European advice is that something is not safe - there's a conflict between the two. At the moment the WTO has to arbitrate between those two opposites. What I want to see is a system where there is a proper dialogue and wherever possible consensus came be reached. And I think, in discussions that we have already had in the lead up to Seattle, that the Americans are beginning to understand that the position that they have adopted really in the last twelve months is not an acceptable one and there has to be far more give as far as the Americans are concerned. HUMPHRYS: Because it should not be possible for the WTO to overrule a country, a democratic country saying we have decided we don't want this stuff because we believe it isn't safe, it shouldn't be allowed to happen should it? BYERS: Well we shouldn't get ourselves into that situation and that's why what I am saying is that we need to have a mechanism where there is dialogue, and where there is discussion, where people then are content at the outcome. I mean this is the important thing about the WTO being a consensus body, they do need - the WTO does need to recognise that we need to take all one hundred and thirty four members together if Seattle is going to be a success. And I happen to believe that free trade can be fair trade and that all countries can benefit from it. HUMPHRYS: What I am saying to you is that the bias should be shifted away from free trade to fair trade, that's the whole point at the moment as you acknowledged right at the beginning. The bias is in favour of free trade, what I am saying is that it should be hugely tilted in the other direction. BYERS: Well I don't..the United Kingdom government doesn't support free trade at any cost. What we need to have is a rules based system which can benefit all our people and that doesn't just mean the people in the United Kingdom. It means people across the globe. I mean free trade is actually an engine for economic growth, but it's got to be economic growth and prosperity which we can spread around the world and we will be taking a number of initiatives in Seattle to try and break the deadlock which exists at the moment and as we sit here today, there isn't going to be an agreement in Seattle anyway because there's what thirty-five pages of draft script, seventy-seven paragraphs, all of them in square brackets because agreement has not been arrived at. And what I want to do is for the United Kingdom to build a bridge and to try and ensure that we can have a successful Seattle which will be for benefits of all countries and not just a few big ones. HUMPHRYS: So under the changes that you would like to see coming in, let's look at our pigs. Now we British farmers are forced, quite rightly most people would say, to produce pigs in a humane, a relatively humane manner. The United States produces pigs in a less humane manner, they want to sell their pigs to us, we should be able, should we not, to say no we don't want those pigs (a) because they are not produced in a humane manner and (b) because they will drive out of business our pig farmers who cannot compete on that basis. Are you saying, we should be able to do that, to say to the United States, under the WTO rules, no, none of your pigs. BYERS: We want to get animal welfare as one of the issues which will be on the negotiations post-Seattle. Seattle is setting the agenda for three years of negotiations and items animal welfare is one of them - is an issue that we want to be on the agenda for those negotiations, for the reasons that you have mentioned John. HUMPHRYS: So, you will be very disappointed, this government will be very disappointed if we are not able, putting it very crudely, to keep American pigs out. BYERS: We want to get to a situation where at the end of the Seattle talks, in a week's time, we will be able to say that animal welfare is one of those issues that can be discussed as part of the negotiations. Now once again I can't predict the outcome of that, but let's at least get it on the agenda. Now the Americans don't want it on the agenda, the Americans want a very narrowly focussed set of trade negotiations to occur. We want a broad and comprehensive set of trade negotiations because we believe the time is right to address these issues, whether it is animal welfare, whether it is core labour standards, whether it is concern for the environment, that should be part of the WTO agenda. HUMPHRYS: Yeah, but the trouble with that is that what you're going to be talking about over these next few days is actually liberalising the agricultural market, so it's going to go the other way isn't it, it's going to go in the direction we don't want it to go? BYERS: Well, it can go in the direction which would be of benefit. I want for example, and this is one of initiatives that we're going to be announcing on Tuesday to try and overcome the deadlock which exists at the moment, is that for the forty-nine least developed countries in the world, and this is in particular relation to agricultural subsidies, for those forty-nine countries they should have their goods, agricultural goods in particular, should have access to all markets with no tariff being imposed upon them. Now that will fundamentally change not just the prosperity in those countries, but will change the way in which our own markets will operate as well, and we need to take those sorts of initiatives. And that is trade liberalisation, but I think that's liberalisation which will benefit the globe and not be a disadvantage. HUMPHRYS: But the other side of that coin is that they, the poorest third world countries then have to open their markets, their investments and all the rest of it to the rest of the world. Enormous damage can be done to them, we're seeing an example of that now in all sorts of different places. BYERS: We are, and the proposal which I'll be announcing on Tuesday will in fact be said unilaterally not part of a deal, that we're doing this because it's the right thing to do, but for those forty-nine least developed countries they should have access within the period of round which is three years, to our markets with no tariffs being imposed on those goods. HUMPHRYS: Yes, but the point I was making was that you want them - what is happening at the moment is that they will be under the present system forced to open up their markets to us, which may sound equitable, but in fact is desperately unfair on them because the big boys will gobble them up. BYERS: But no, I'm not saying that. Because I was saying it was not part of a deal. I'm saying that in order to show those forty-nine least developed countries, and we're talking here about Ethiopia, about Sudan, countries in desperate need, our markets will be opened up not as part of a deal that they must open up their markets, but we'll open up our markets, no tariffs at all being imposed upon their goods. That will make a huge difference in terms of their economic prosperity. The European Union, three-hundred-and seventy million people, a market opened up to them with no tariffs, so...... HUMPHRYS: So you're saying you don't want them then, to open up their markets to us for investment. For instance in the Namibia I think it is, where foreign tourism is a terribly important part of their ..., part of their national income. People are saying, the Americans are saying, : we want to get in there now and we want to be able to run their tourism if we so wish, if we could you know, invest in their - they say : we don't want that. Are you saying they should not have to have that happen to them? BYERS: Well as far as investment is concerned I actually want investment to be part of this round. Investment is already taking place in many countries and there are no rules attached to it, and it really is a race to the bottom and we've got to get away from that. I think the WTO can have investment as part of this round but investment which actually has rules attached to it. Now if Namibia don't agree with that they can block in the WTO, you know, any one country can say no, and that will be the end of the matter, but I think most people are beginning to recognise that investment is one of those issues that it's actually worth having as part of the round. HUMPHRYS: So you are going to Seattle today to argue for fairer trade, not necessarily, though it may part of it as well but not necessarily fair trade, Fairer trade is where the bias should be? BYERS: We'll be arguing for extending liberalisation of trade but within a context which recognises that fair trade, social justice and wealth creation can be part of the same agenda. That's what we're aiming for in Seattle and I hope that we'll be successful. HUMPHRYS: Stephen Byers, thank you very much indeed.