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The
Trade Negotiations Committee
> Opening
remarks of TNC Chairman, 10 June 2003
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Today’s working session of the Trade Negotiations Committee offers me
the welcome opportunity to address your august organization and to speak
about West and Central African Countries concerns related to the Doha
Round negotiations as well as about their efforts towards ensuring
fairness and equity for millions of producers from our countries.
The multilateral trade rules, which you arbitrate, have been shaped and
decreed according to the fundamental principles of: transparency in
trade transactions, national treatment and non-discrimination among
member States in trade relations.
It might be reminded that the “Washington Consensus”, whose underlying
philosophy includes market-based price determination of all goods, in
addition to privatizations and capital market liberalization, has
reinforced these very principles.
The implementation of the WTO trade policy review mechanism led many
member States to bring their trade policies in line with the
multilateral trade rules and helped improve their trade performances.
Our countries, whose economies are yet very vulnerable, have undertaken
adjustments to become more competitive and increase their participation
in global trade.
These reforms, conducted on the basis of structural adjustment
programmes, brought about macroeconomic and financial stabilization and
created favorable internal conditions for the development of productive
sectors promising with sustainable growth potential.
In line with these reforms, West and Central African States gradually
eliminated subsidies to their agricultural sector.
However, the impact of these reforms on our countries’ development has
to date been nullified by the multiform subsidies still provided by some
WTO member States to their agriculture, which is in total contradiction
with WTO basic principles.
Thus, for the year 2001 alone, rich countries provided subsidies to
their farmers which amounted to six times the amount of their
development aid, respectively 311 and 55 billions of dollars.
For example, a country like Mali, for the same year, received 37
millions of dollars in aid, but lost 43 millions, due to lower export
revenues as a consequence of other producer countries’ cotton subsidies.
Moreover, subsidies provided to cotton farmers in rich countries are 60
percent higher that the overall gross domestic product (GDP) of Burkina
Faso.
It goes without saying that such practices provide rich country
agriculture with an unfair competitive edge that works against
developing countries like ours.
Our farmers, who produce the kilogram of cotton 50 percent cheaper than
their competitors from developed countries, ranking them amongst the
most competitive in the world, suffer the negative impact of cotton
subsidies.
These subsidies have caused economic and social crises in African cotton
producing countries. As a consequence of cotton subsidies, in 2001,
Burkina lost 1 percent of its GDP and 12 percent of its export incomes,
Mali 1.7percent and 8 percent, and Benin 1.4 percent and 9 percent
respectively.
The massive subsidies awarded to cotton farmers in some WTO member
States are among the most important and direct causes of the problems
encountered on the international cotton market. These subsidies
artificially inflate the offer and depress export prices.
In 2001, cotton production in Benin, Burkina, Mali and Chad, accounted
for 5 to 10 percent of gross domestic product and an average of about
30-40 percent of overall export revenues.
More than ten millions of people in West and Central Africa directly
depend on cotton production, and several other millions of people are
indirectly affected by the distortion of world market prices due to
production and export subsidies to this agricultural product.
Cotton holds indisputably a strategic position in our countries’
development policies and poverty reduction programmes.
While cotton accounts for only a small portion of economic activity in
industrialized countries, in all our States, it represents a determining
and critical factor for poverty reduction policies as well as for
political and social stability. Through induced effects on
infrastructure development, education and basic health services, cotton
production acts as an essential link within our countries’ development
strategies.
Our decision to submit jointly to the WTO, on 30th of April 2003, a
sector-based initiative for cotton, based on WTO principles supporting
the development of a fair and market-oriented world trading system, is
legitimate.
From this platform, I am launching an appeal, in the name of several
millions of women and men, who live in least developed countries and for
whom cotton is the main means of subsistence.
On their behalf, in the name of the Signatories to the cotton initiative
and on behalf of all those who support it, I ask the WTO and its member
States to prevent that these populations, who are victims of the
negative impact of subsidies, be excluded from world trade.
The WTO, arbitrator and warrantor of international trade rules, is the
most appropriate multilateral forum to deal comprehensively with the
issue of competition-distorting subsidies. The ongoing Doha Round
negotiations on agriculture must imperatively address distortions in
cotton trade.
The example of African cotton offers a conspicuous illustration for the
rare cases, where trade liberalization and respect of multilateral trade
rules can provide substantial and immediate trade benefits to African
States belonging to the world’s poorest countries.
Arguments in favour of sector-based modalities for cotton are
straightforward: our countries are not asking for charity, neither are
we requesting preferential treatment or additional aid. We solely demand
that, in conformity with WTO basic principles, the free market rule be
applied. Our producers are ready to face competition on the world cotton
market – under the condition that it is not distorted by subsidies. West
and Central African cotton producing countries strongly hope that the
Doha Development Agenda’s objectives, namely the establishment of fair
and market-driven trade, will be achieved.
In particular, they invite our partners from the Northern hemisphere to
follow more coherent trade and development policies, so as to not
destroy what they themselves have contributed to build.
For instance, the positive effect of some twenty billions of CFA Francs,
granted to Burkina Faso under the HIPC Initiative, is practically
annihilated as a consequence of cotton subsidies.
West and Central African cotton producing countries recommend that
cotton’s strategic importance for development and poverty reduction be
fully recognised.
They suggest that, at the WTO Ministerial Conference to take place at
Cancún, Mexico, September 10-14, 2003, a mechanism be set up to
progressively reduce support to cotton production and export, with a
view to fully suppressing all cotton subsidies at a defined deadline.
Also, they advocate that, as an immediate and transitory measure in
favour of least developed countries (LDCs), a mechanism be adopted to
compensate their farmers for the revenue losses incurred because of
cotton subsidies.
African countries share the opinion that a satisfactory settlement for
the cotton subsidy issue is both a must for the current negotiation
round and a test that will allow member States to prove their sincerity
behind the commitments taken at Doha.
This is a suitable time and place, for me, to thank all the stakeholders
who support our struggle for fairness, equity and justice in
international trade. I am referring to professional farmers’ and
producers’ organizations and associations, non-governmental
organizations, bilateral and multilateral development institutions and
the Authorities from countries favourable to our case.
I also extend my thanks to the WTO Secretariat for the warm welcome
extended to me and my delegation.
Finally, I wish to congratulate and thank the Representatives of all WTO
member States who support our cotton initiative, in particular the
Ambassadors of ECOWAS member countries, and I call upon them to continue
helping us defend our case.
To all of you assembled here today, I wish best success in your work and
deliberations and thank you for your attention.
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Address
by President Blaise Compaore of Burkina Faso