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FREE TRADE MUST GO HAND IN HAND WITH RAISING SOCIAL, HEALTH AND ENVIRONMENTAL STANDARDS

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The prime minister today welcomed a Performance and Innovation Unit ...
The prime minister today welcomed a Performance and Innovation Unit

(PIU) report that shows it is possible to balance an open system of

free trade with raising labour and animal welfare standards and

protecting human health and the environment. The UK government has

been leading the way in taking a strategic look at these issues and

hopes that the analysis will be useful for trade negotiators,

interest groups, businesses and consumers alike.

The report, 'Rights of Exchange: Social, Health, Environmental and

Trade Objectives on the Global Stage', highlights growing public

concerns about how and where products are made and the extent to

which the trading system can accommodate labour standards, animal

welfare, human health and environmental objectives. While consumers

want more and clearer information about where and how products are

made, there is a real danger that these issues will be used as a

cloak for protectionism with negative impacts for everyone, but

especially for poorer countries.

The report's main conclusions are that:

* opening international markets can be expected to benefit social,

health and environmental objectives over time by raising standards

of living;

* but open markets will only deliver these benefits if supported

by the right policies - for example, measures to address increased

pollution or to improve health care systems;

* developed countries and international institutions need to do

more to help poorer countries gain market access for their

products and to implement supportive social, health and

environmental policies;

* unilateral trade restrictions by rich countries to force poorer

ones to adopt higher standards will almost always be

counter-productive;

* world trade rounds are not suitable as the main forum for

negotiating non-trade issues;

* the role of the World Trade Organisation (WTO) is poorly

understood, but it provides an effective framework for trade;

* the trade rules need more clarity and transparency in several

areas including production processes, product labelling and the

precautionary principle; improvements are also needed to the

dispute settlement processes;

* more multilateral agreements are needed to address social,

health and environmental issues, with these agreements and trade

rules mutually supporting each other;

* there is much that business and consumers can do to influence

standards and government can play an enabling role in encouraging:

* voluntary initiatives by business and best practice in corporate

social responsibility

* better product labelling which can significantly improve

consumer choice and social, health and environmental outcomes.

The prime minister said:

'An open and rules-based trading system brings great opportunities

and benefits. As consumers, we now enjoy greater choice and

competitive prices; as businesses, we profit from greater access to

markets; and as citizens, we benefit from improvements to living

standards at home and abroad.

'However, trade liberalisation also presents new challenges on the

environment, conditions at work, human health and animal welfare.

But there is much that all of us can do - as government, businesses

and individual consumers - to help raise standards around the world.

'I welcome the PIU's report. The government's future policy-making

will be guided by the principles it sets out. We intend to use the

report's conclusions as the framework for our long-term agenda. I

also hope that its analysis will create a more informed and open

debate on the issues.'

Brian Wilson, minister of state at the Scotland Office, and sponsor

minister for the PIU report, said:

'This report shows that in general a liberal trading environment

brings economic benefits and social advances. It also identifies

areas where additional efforts are needed to help ensure that trade

liberalisation makes the maximum contribution to sustainable

development and poverty elimination.

'Trade cannot and should not be used indiscriminately as a big stick

with which to force change in developing countries. This approach is

usually seen by them as just another form of protectionism imposed by

rich countries. However there is a need to make further progress

through co-operation and support.'

Richard Caborn, minister of state at the department of trade and

industry, said:

'The PIU have provided a convincing and coherent intellectual

framework for addressing these complex issues. I welcome the report's

conclusions setting out the limits to the sensible use of trade

measures to pursue social, health and environmental objectives. In

addition, I strongly support the emphasis placed on the need for a

more coherent approach towards social, health, environmental and

trade objectives at the multilateral level and the important role of

business and consumers in bringing about change.'

NOTE

Copies of the report, 'Rights of Exchange: Social,

Health, Environmental and Trade Objectives on the Global Stage',

can be obtained from the PIU on 020 7276 1452.

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