WTO news: what’s been happening in the WTO

WTO: 2005 NEWS ITEMS

29 April 2005
WTO COTTON SUB-COMMITTEE

African Group proposes cotton distortions scrapped by September

The African Group has now circulated a text (dated 22 April 2005) for radically reforming trade in cotton and “cotton by-products”, which it says includes textiles goods. Many members welcomed the proposal because it has allowed the Cotton Sub-Committee to start focusing on substance rather than procedure, but some said the sector’s reform should be part of the full agriculture negotiations package.

150pxls.gif (76 bytes)
NOTE:
THIS NEWS ITEM IS DESIGNED TO HELP THE PUBLIC UNDERSTAND DEVELOPMENTS IN THE WTO. WHILE EVERY EFFORT HAS BEEN MADE TO ENSURE THE CONTENTS ARE ACCURATE, IT DOES NOT PREJUDICE MEMBER GOVERNMENTS’ POSITIONS. THE OFFICIAL RECORD IS IN THE MEETING’S MINUTES]

SEE ALSO:
> press releases
news archives
Supachai Panitchpakdi’s speeches

> Cotton Sub-Committee
Mandate (July-August 2004 framework, paragraph 1.b and Annex A paragraph 4)
Background explanations in the agriculture negotiations backgrounder
 


Chairperson Tim Groser concluded the discussion by praising members for keeping cool in what could have been a heated and unproductive discussion. As a result the sub-committee’s work is “beginning to move”, he said, in a well-attended meeting and delegations really interacting with each other.

He described the sub-committee’s latest discussions as drawing together various threads of the real situation in the sector: internal reforms a number of producing countries have implemented; the possibility of autonomous actions by subsidizing countries and those with high trade barriers; preferences (such as duty-free market access for exports from least-developed countries); formal commitments on the three “pillars” of the agriculture negotiations; the relevance of various dates; development assistance; and the promotion of trade and marketing.
  

The African Group proposal back to top

This is “Proposed Elements of Modalities in Connection with the Sectoral Initiative in Favour of Cotton, 22 April 2005” (TN/AG/SCC/GEN/2)

The African Group (Rwanda speaking) said the proposal reflects the urgency of the issue. The heart of the paper contains proposals on all three “pillars” of the agriculture negotiations, which the group says are in line with the 1 August 2004 “framework” decision and are intended to speed up the negotiations. The group wants cotton included in the planned text of July 2005, when the agriculture negotiations chair, Ambassador Tim Groser of New Zealand, aims to produce a “first approximation” of the agriculture “modalities”. The African Group’s cotton proposal would amount to full modalities for the sector, with only some procedural details to be sorted out.

On the three pillars:

Market access: This would be “improved”, with duties and quotas scrapped for cotton and its by-products when exported by least-developed countries and net exporters.

Domestic support: Distorting supports to be eliminated by 21 September 2005 at the latest (the Africans explained in the meeting that this relates to dates in the cotton dispute (DS267, ruling adopted by the Dispute Settlement Body on 24 March 2005)). Also proposed are disciplines for preventing “box-shifting” (recategorizing supports without reducing their distorting effect), and “ambitious cotton-specific criteria” to be developed for “the measures authorized under the green and blue boxes”.

Export subsidies: All types of export subsidies on cotton to be eliminated by 1 July 2005 at the latest (also related to dates in the cotton dispute).

Other proposals include:

Emergency support fund: Amounting to 20% of the highest value of cotton production in the last three years in each country concerned, to “contain the serious socio economic consequences for the farming communities” of loss of revenue, and managed by representatives of donors, producers and governments. The amount would decrease proportionately as subsidies and supports are eliminated.
  

The discussion back to top

African countries (Benin, Zambia, Guinea, Burkina Faso, Zimbabwe, Senegal, Mali, Tanzania, Uganda) and some others (Cuba) supported the proposal in full.

Paraguay, Brazil, Argentina and China were more broadly in favour. However, China said the reductions in the three pillars should not apply to developing countries, and opposed including industrial “by-products” such as textiles — these would come under the non-agricultural market access (NAMA) talks, China said. China, now a net importer but with over 100 million people involved in the cotton sector, and Paraguay with cotton sometimes exceeding 40% of its export earnings, described how important the sector is to their poorer farmers too. Chairperson Groser said the information provided by China, Paraguay and others is an important reminder that the African countries’ problems are shared elsewhere as well.

The EU repeated the recent statement of its trade commissioner, Peter Mandelson, on fast-tracking cotton by implementing reductions in trade barriers and domestic supports and eliminating export subsidies from “day one” (the date that the results of the agriculture negotiations would take effect) rather than phasing them in over an implementation period. Other actions could also be achieved by countries taking autonomous actions in addition to whatever is agreed multilaterally, the EU said.

The US stressed it is committed to dealing with the problem because it understands the critical role cotton plays. But, the outcome should be part of the “single undertaking” of the Doha negotiations and part of the ambitious and comprehensive package on agriculture, the US said (Canada agreed). The US cautioned that a “early harvest” on cotton would undermine the “cross-cutting” approach of the negotiations. The US added that its position on an emergency fund is unchanged — a stabilization fund would not work and would be anti-competitive, it said. Instead, members should focus on better aid programmes, the US said. Japan had similar reservations about the proposed fund.

  
Development aspects back to top

A third consultation on development aspects was held on Monday 25 April, chaired by Stuart Harbinson, director of the Director-General’s Office. The Secretariat summarized on the latest information from that consultation on development assistance (details to be in this meeting’s minutes).

  
Next meeting back to top

22 June 2005

  
Chairperson: back to top

Amb.Tim Groser of New Zealand, who also chairs the agriculture negotiations.

  
Some of the groups: back to top

See also agriculture negotiations backgrounder

PROPONENTS: Benin, Burkina Faso, Chad, Mali

AFRICAN GROUP (41 countries): Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo, Congo (Democratic Republic), Côte d’Ivoire, Djibouti, Egypt, Gabon, The Gambia, Ghana, Guinea, Guinea Bissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, , Swaziland, Tanzania, Togo, Tunisia, Uganda, Zambia, Zimbabwe

150pxls.gif (76 bytes)