Clark backs democracy over trade

A controversial speech by Commonwealth secretary-general Don McKinnon at the opening of the Commonwealth Heads of Government meeting in Malta has been given a swift "thumbs down" by Prime Minister Helen Clark.

Mr McKinnon suggested that trade was more important than democracy.

"Many people are beginning to ask whether building a democracy is really the road to prosperity," he said.

"Does democracy put food on our tables, clothe our children, put roofs over our heads, or give us a future?"

Trade was not just an engine for economic growth, but was the most potent weapon to combat poverty, he told Commonwealth leaders.

Miss Clark told 3 News that she disagreed with Mr McKinnon's comments.

"What is important to us is that the Harare declaration and the expectations around human rights and democracy are upheld."

Helen Clark said Mr McKinnon's comments should not be "over-interpreted".

Western nations need to help developing countries adjust to the removal of export subsidies and tariff barriers.

She warned other leaders the World Trade Organisation's (WTO) Doha Round of trade talks would stall without movement on agriculture. She said Chogm delegates agreed with her but that they all recognised that the adjustments could not be made in isolation.

"What they're saying is that for the small, developing countries it's also more complex, that there has to be a development package that goes with the round," Helen Clark said.

"It's not just about the Western world stopping its domestic support and its export subsidies and its tariff barriers, they're also going to have to help with the adjustment of developing countries."

Helen Clark's comments followed agreement by European Union negotiators in Brussels on a major overhaul of its sugar subsidy programme, cutting prices by 36 per cent in a landmark deal the EU said would strengthen its hand in the WTO talks.

A successful WTO challenge by Australia, Brazil and Thailand forced the EU to propose cuts in its subsidy system. The reforms were required to be made before the end of May.

Failure to reach a deal would have left the EU in a weak position going into the Doha round talks, in Hong Kong.

But the price cuts angered trade groups and officials from Caribbean sugar producers - many of them Commonwealth countries - which had called for cuts of no more than 19 per cent and wanted them backed by generous compensation.

"The hottest issue is the effect on the small, developing countries which produce sugar," Helen Clark said.

"What happens when the EU drops its price of sugar [is] that [it] impacts on the people who were exporting sugar into their market.

"So you've basically got an outcry at the meeting from the countries like Mauritius and Guyana and others who have sugar as a pretty substantial part of their economy."

The smaller countries believed the EU move was another example of how it was becoming more difficult for them to participate in the global economy. They believed that if such decisions were made, they needed a transition period.

"You're just conscious that there is quite a lot of interests - there's the interests of commercial agricultural producers like ourselves, who operate without subsidy, but then you've got these developing countries who have had preferences in the EU market, who lose preference when the EU itself adjusts."

- NZPA