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Geneva, 10 June 2003
TRADE NEGOTIATIONS COMMITTEE
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Address by President Blaise Compaore of Burkina Faso

On the Cotton Submission by west and central African countries to the Trade Negotiations Committee of the World Trade Organization.

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Opening remarks of TNC Chairman, 10 June 2003


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.