Business Interview: Ian Pearson, Trade Minister - A very careful pair of hands: or how to export arms and human rights

Between the Chinese state visit and the Hong Kong trade talks, this minister is learning Mandarin

Ian Pearson is the furthest you could get from being a minister without portfolio. If anything, he has too many. He is minister for trade, which includes overseeing Britain's arms exports, and also calls himself the human rights minister. He denies the two jobs are incompatible: "There is never any contradiction between human rights, which are always relevant, and doing business."

As befits his roving role, he has special responsibility for North America, China and South-east Asia, and jokes that, having been out of the country for 40 days since taking up his post in May, he should check whether he could qualify as a tax exile.

Climate change and international development are thrown into the ministerial mix for good measure. And when he is not racing between his office at the Foreign Office and his rather less grand office at the Department of Trade and Industry, he is learning Chinese (and so should we, he adds). He insists that he has everything under control, but admits: "Occasionally things clash."

At the moment, he is focused on the small matter of saving the world trade system. He will be one of four UK ministers at the next World Trade Organisation (WTO) Doha round of talks in Hong Kong next month. The last Doha round talks, in Cancun in 2003, ended in failure when poorer countries (or LDCs - Least Developed Countries) walked out in protest at the West's failure to open its markets for trade and protect LDC markets from the West's exports.

A favourable deal for the LDCs next month would help them far more than existing agreements to cancel debt and provide aid. "If we can increase Africa's share of world trade by 1 per cent, that would account for more than seven times the amount of aid which goes to the whole continent," he says. "There is no doubt that if we didn't have a successful conclusion to the Doha round there would be a big hole when it comes to what we can do to help developing countries."

Failure is not an option, and not just because Tony Blair, whose presidency of the European Union and G8 expires in January, wants something to show for all his (and Gordon Brown's) rhetoric on trade liberalisation. "The integrity of the world trade system would be put at risk if there was no progress and we had a failure like in Cancun."

Denying poorer countries access to Western markets would make a mockery of the WTO as those excluded would be forced to form bilateral and local trading blocs, he says. "The danger is that the multilateral rules status we have with the WTO would begin to lack credibility."

One of the sticking points in Cancun - as now - is the European Union's Common Agricultural Policy (CAP), a $43bn (£25bn) annual subsidy to European farmers which puts farmers from poorer countries out of business. Peter Mandelson, the European Commissioner for trade, has this month been trying, unsuccessfully, to strike a draft deal with member states to cut average subsidies by about 46 per cent.

The UK would like agreement to go further, he says, but adds diplomatically: "There are a lot of other member states which have different ambitions to the UK."

Western government offers of aid and trade deals have not always been altruistic. Campaign groups such as the World Development Movement welcome the UK ending the practice of making aid conditional on the opening up of the recipient's markets or privatisation of its utilities. But they point out that many grants of UK aid are still dependent on World Bank conditions being met, an estimated three-quarters of which includes provisions for trade liberalisation. Pearson acknowledges past mistakes. "Aid is not made conditional. That is one of the things which has stopped. We have said quite clearly we don't believe in forced liberalisation for developing countries." But aren't countries sometimes forced to open their markets anyway, even if it is not in their interest? "We see benefits of trade. There is negotiation. If developing countries want to take advantage of negotiations and open up their markets they should not be prevented from doing so."

Pearson is clearly fascinated by China. On his desk is the new biography of the late Communist Party leader, Mao Tse-tung, by the Wild Swans author Jung Chang. In the past six months, he has been to China twice, and last week the Chinese President, Hu Jintao, made a state visit to the UK.

Pearson is impressed with the economic progress the Chinese have made. "Over the last 20 years, China has taken one third of a billion people out of extreme poverty. This is staggering. It has done that through trade." Asked about the widespread use of child labour in China, and whether it is inevitable at this stage of China's development, Pearson deftly switches into human rights mode. "Human rights are extremely important. I take every appropriate opportunity to raise human rights matters with the Chinese. This might be to do with religious persecution or labour standards." But ultimately, if we don't want to buy a cheap football that has been made in Chinese sweatshops using child labour, as consumers, we don't have to? "Exactly," he says. And as a politician dealing with China, you can only ask - not tell, he says. Back in trade minister mode he adds: "UK companies must realise there are opportunities in Asia."

Pearson's dextrous diplomacy comes into play again over the sensitive issue of arms exports. Britain is the second- largest arms exporter in the world. But weapons - particularly small arms - also tend to kill people, which has human rights implications. "We have probably got the strictest regime in the world over export licences," he says, again juggling his dual trade/human rights roles. "We rightly have a technological leadership over some of these areas but we are careful over who we allow them to be sold to."

But can you be sure UK arms exports don't end up fuelling civil wars in Africa via middlemen for example? "Weapons are found in the [hands of the] wrong sort of people but not through the UK. We are pretty confident." Just for the record, he has not seen the new Nicholas Cage film about a Russian arms dealer, Lord of War.

A delegation from the TUC is about to batter the door down, and Pearson is keen to reel off some statistics. Last year, he says, 400 projects using investment from overseas safeguarded or created 16,000 UK jobs. "Sometimes we lose sight that we have people working day in, day out, to promote the UK overseas and at home," he says.

Whether he can repeat the trick in Hong Kong next month and help secure an agreement on trade to safeguard millions of jobs in the poorest countries is another matter.

BIOGRAPHY

BORN 5 April 1959

EDUCATION Brierley Hill Grammar School; Balliol College Oxford (BA in philosophy, politics and economics); Warwick University (MA in industrial relations, PhD in industrial and business studies)

CAREER

1985-87: local government officer for the Labour Party
1987-88: deputy director, Urban Trust
1988-89: freelance strategy consultant
1989-94: director of marketing, then chief executive, WMEB Group since 1994: MP for Dudley South
2001-02: Government whip
2002: parliamentary under-secretary of state, the Northern Ireland Office
since 2005: minister for trade and investment

PERSONAL Married, with two daughters and one son. Interests include rugby and architecture