Terrorism: the price we pay for poverty

A cabinet minister says it at last: if we truly want security, we must do far more to end misery and

Patricia Hewitt speaks softly. She constructs her sentences carefully. When she gets passionate, her voice tends to quiver. "After September 11, we began to make quite a powerful coalition around the world against terrorism. But if we are going to have a durable, a really powerful international coalition against terrorism and for greater security, then we have to have an equally powerful economic coalition - in other words, a coalition for free and fair trade around the world, because we will never deal with terrorism and other threats to world peace if we don't deal with the hunger and misery and frustration across the developing world."

There you have it, in a nutshell. It's the kind of thing the trade justice movement has been banging on about for years. Tony Blair talked of righting the wrongs in the world from "the slums of Gaza to the mountains of Afghanistan", but he wouldn't make such an explicit link between terrorism and its causes. As for George W Bush, he sees terrorism as evil people doing evil things.

When I met Hewitt, the Secretary of State for Trade and Industry, she had only just returned from the World Economic Forum, the annual gathering of the rich and powerful in Davos, Switzerland. There she met, among others, President Joaquim Chissano of Mozambique, President Vicente Fox of Mexico and Supachai Panitchpakdi, the new head of the World Trade Organisation. They had an alarming message for her, and it's a message she wants to spread.

World trade negotiations are deadlocked. When the most recent round was launched in Doha, Qatar, only two months after the attacks on the World Trade Center in 2001, delegates were infused with a rare sense of purpose. The theory of globalisation, coupled with the practice of protectionism, has worsened the plight of the poor. As the European Union and the US haggle over tariffs and quotas, the WTO is now in serious danger of failing in its task to liberalise trade in agriculture and provide cheaper medicines. The next conference takes place in Mexico in March and already expectations are falling.

There is, Hewitt says, "a massive mistrust between the developing countries and the developed countries . . . if progress isn't made, both in Europe and in the US, on agriculture and on other market issues, developing countries will be forced to take a detour to development, a detour that will cost them 20 years of growth. The issue is quite simple. If the developing countries are going to move towards prosperity and slash the number of people in poverty, they have got to be able to trade with the rich markets."

We talk examples. I recall a film I made in Ghana a year or so ago showing how coffee and cocoa producers are denied access to international markets. I describe talking to a village elder in the Katanga Valley, a once-fertile rice-growing area where production stopped on the orders of the IMF and World Bank. Ghanaian rice was deemed not to be viable on the world market. The locals now have no work, no income, and eat donated, heavily subsidised, imported American rice.

Hewitt describes her conversation with Chissano and the story he has to tell about Mozambique. "There is a country which before its civil war was a very successful producer and exporter of sugar. The IMF came along and said: 'You don't want to trade in sugar. Bad route. You won't be able to sell it.' Mozambique now produces good-quality sugar at half the price of subsidised European sugar beet farmers. But, of course, they are exporting only a fraction of what they could export." Of the 300,000 tonnes of sugar Mozambique produces overall each year, Europe takes only 8,000 tonnes, the US 12,000. "Blocked by quotas in America, tariffs in Europe," Hewitt says. "Absolutely crazy."

You might say that's easy for her to say. We are less culpable than most (though by no means blameless) over protectionism. We have been doing something (though only a minuscule amount of what we could do) to promote debt relief. Especially in these very fraught times, we can portray ourselves where we want to be - the honest cop between the EU and the US. But that doesn't invalidate Hewitt's point.

In one of his first acts as president, Bush signed steel tariffs into law; last July, he approved more than $180bn of domestic farm subsidies. In Europe, meanwhile, the Common Agricultural Policy is still alive and kicking, costing each taxpayer roughly £15 a week.

Hewitt directs most of her annoyance at the French. "We simply cannot claim to be serious in our policies towards developing countries unless we embark on serious reform to the CAP and particularly the export subsidies which ravage the rural communities of developing countries."

Restructuring of the textiles industry has led to job losses in her Leicester West constituency. By contrast, the US has failed to make the same agreed changes. "There are people who talk about globalisation as being all gain and no pain," she says. "They do a huge disservice because there is pain involved in market-opening."

She draws a historical analogy: "Europe can learn from its own history. What did we do at the end of the war? We said there will never be lasting peace in Europe unless there is lasting prosperity." France, Germany and the other founding members of the European Economic Community linked themselves through trade "so that they wouldn't go to war again". Her voice cracks ever so slightly as she says this.

She gives three reasons why all this matters: "sheer immorality"; self-interest (the "if you open your markets for others you increase your prosperity as well" argument); and what she calls the "primary argument".

"Of course there is a connection there between peace and prosperity, there is a connection between destitution and war and conflict and terrorism. If we in the west don't create a system of world trade that is fair as well as free, then the developing countries above all will pay a price.

"But we will also pay a price in even greater pressures on our migration and asylum systems, we will pay a price in increased terrorism and increased insecurity all around the world."

But if we are so concerned about global insecurity, why were we trying to flog India and Pakistan - each with nuclear weapons, and with one million soldiers facing each other in Kashmir - as many arms as possible? Why are we doing the Americans' bidding and providing Israel with spare parts for fighter jets to use against Palestinians? Why are we selling Tanzania, which can barely feed itself, a military-compatible air traffic control system?

Hewitt is responsible for checking the licence applications, but this is the least productive part of the interview. We have, she tells me, the "toughest controls" of any comparable country. We have "a highly competitive and world-class aerospace industry". Her officials apply themselves "painstakingly to every application for an export licence". One former official in the know describes Hewitt on arms sales as being "close to Clare Short in theory, but thoroughly Blairite in practice".

What about one area where she has been forthright? She is a strong advocate of joining the euro. Hewitt does not deviate from the "we will make our assessment by June on the basis of the five economic tests" line, but nobody does. What matters with ministers is the tone, and hers is firmly of the "please give it a chance" variety. "We have to make that judgement for the long term, and not be mesmerised by the real short-term economic difficulties that the world is facing . . . If we come to the conclusion that joining the single currency will be good for the country, for jobs, for our standard of living, then we will get out there and make that case in a referendum."

She concedes that, with Blair having taken some knocks from Europe in recent months, the case for Europe may be harder to make. She is equally worried by the gulf between Europe and the US. "There is a very great danger of growing anti-Americanism in Europe and grow-ing anti-Europeanism in America. There's always been that strong current of European anti-Americanism, particularly on the left, but we ignore at our peril the anti-Europeanism and ignorance of Europe throughout so much of the United States." Both sides, she says, are to blame. Europe has been "very weak" in developing its own defence. Europe should spend more on it, and spend better; the US should pay more heed to nation-building and multilateralism. "It's not a question of choosing between the US and hard power, or Europe and soft power. We need both. It's not surprising you get some Americans saying that Europe is very ready to criticise the US, but it's also very willing to shelter under the American umbrella."

I ask about the preparations for war and the effect on the Labour Party. "People are, for very obvious reasons, very worried about a war in Iraq and they want to see the whole issue of Iraqi weapons of mass destruction dealt with through the United Nations," she says. Everyone on the centre left, pacifists apart, should be able to rally round the proposition that "there are occasions when you need military force. We cannot build the new world order that we need only on moral force." The government's approach, she adds, carries "huge risks and we are all very conscious of that".

She says ministers should listen more to disgruntled activists and voters. "We are entering a very tough midterm, and frankly we got off lightly at the last election." Almost nobody at the top has experience of midterm blues. "It's not a luxury we've enjoyed for a long time." As a former gatekeeper to Neil Kinnock in his darkest hours, she knows a bit about dealing with a fractious party. "Of course there are people who say if we end up invading Iraq without the support of the Security Council, then they will resign from the party. But that is not where we intend to be."