Wide support for much of ‘Cotton Four’ domestic support proposal

Trade issues 

The proposal from Benin, Burkina Faso, Chad and Mali TN/AG/SCC/GEN/4 was discussed at some length for the third time. Members supporting it stressed different details that they found acceptable, some backing the proposed reductions in trade-distorting domestic support, others stressing their support for the base periods envisaged and the proposed period for accelerated cuts. African countries as a group and individually supported the proposal.

Egypt and Kenya called for technical discussions on the proposal. This was a reference to the procedure used for the agriculture negotiations as a whole, when topics are developed in smaller group technical discussions alternating with discussions in larger meetings of the full membership.

Chairperson Crawford Falconer said he is open to the idea of organizing technical discussions. The question is: “when?” rather than “if?”; and how to avoid duplicating the discussion of more generic questions, such as the base period for product-specific caps, which is already being discussed in the broader agricultural negotiations, he said.

The US said it appreciated the enthusiasm many members have shown for deep cuts, through their support for the proposal. Hopefully, this enthusiasm can be translated into ambitious results in agriculture as a whole, which will also cover cotton, the US said.

China said it generally supports the proposal and added that developing countries need to be given special consideration, as they have large, low income populatiosn depending on cotton production.

The EU repeated its support for most aspects of the proposal, in particular on reducing trade-distorting “Amber Box” (AMS) supports and the proposed base period of 1995-2000. The EU noted that on the “Blue Box”, it is waiting for a clearer picture to emerge from the main agriculture negotiations before taking a stand on this particular point.

The four African countries’ paper deals with “modalities”, in this case how domestic support would be cut. It features a formula (details below) that implies cuts in cotton subsidies that are larger than for agriculture as a whole — much larger if the agriculture cuts are modest, the difference narrowing if the agriculture cuts are more ambitious. The period for making the cuts would be one third the time for agriculture as a whole. Both of those objectives were agreed at the Hong Kong Ministerial Conference in December 2005 (see background explanation). The four also propose additional disciplines on Blue Box subsidies on cotton.

The paper was distributed just before the Cotton Sub-Committee’s 2 March 2006 meeting and only discussed briefly at the time. A first substantial discussion took place at the last meeting, on 27 March.

Development issues 

The Secretariat reported briefly on the latest developments on this side of the subject, which is on a separate, parallel track from the negotiations and chaired by Stuart Harbinson, special advisor to the director-general:

“As reported at the last meeting of the Sub-Committee on Cotton, the Secretariat is intensively engaged, within the Director-General’s Consultative Framework Process, with bilateral donors and multilateral institutions in monitoring and verifying the actual implementation of cotton programmes and projects underway.

“There is considerable yield from several of these programmes and projects of which the implementation has been assisted by domestic cotton sector reforms in the concerned African countries. The international financial institutions, with the support of other relevant multilateral institutions, continued to provide vital support and are working with the WTO Secretariat to further explore what could be done in moving the mandate forward on cotton development assistance.

“At the recently concluded fourth ordinary session of African Union Trade Ministers in Nairobi, Kenya, the Director-General, at various levels of interaction, explained his continuing intensive engagement, and that of the development community, pursuant to the agreed mandate. There continues to be positive evolution in operational implementation and a substantive report will shortly be made in a mid term review of progress.”

Next meeting 

Tentatively 8 June 2006.