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AGRICULTURE NEGOTIATIONS: BACKGROUNDER

The Cotton Initiative

Just over a year after it was first proposed in 2003, a Cotton Sub-Committee was set up under the Agriculture Committee’s “Special Sessions”. The August 2004 General Council decision that created the sub-committee also said the General Council would look at development issues.

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UPDATED 1 DECEMBER 2004

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This briefing document explains current agricultural issues raised before and in the current negotiations. It has been prepared by the Information and Media Relations Division of the WTO Secretariat to help public understanding about the agriculture negotiations. It is not an official record of the negotiations.


Origins  back to top

The Cotton Initiative was originally raised both in the General Council and the agriculture negotiations by Benin, Burkina Faso, Chad and Mali.The proposal described the damage that the four believe has been caused to them by cotton subsidies in richer countries, called for the subsidies to be eliminated, and for compensation to be paid to the four while the subsidies remain, to cover economic losses caused by the subsidies.

The four first wrote to WTO Director-General Supachai Panitchpakdi on 30 April 2003, introducing a “Sectoral Initiative in Favour of Cotton”, which was presented on 10 June 2003 to the Trade Negotiations Committee by Burkina Faso President Blaise Compaoré. The Agriculture Committee’s Special Sessions (i.e. the negotiations) also discussed the proposal (document TN/AG/GEN/4) on 1 and 18 July 2003.

The proposal became a Cancún Ministerial Conference document, WT/MIN(03)/W/2 and WT/MIN(03)/W/2/Add.1. It sought a decision in the Cancún Ministerial Conference as an agenda item titled “Poverty Reduction: Sectoral Initiative in Favour of Cotton — Joint Proposal by Benin, Burkina Faso, Chad and Mali”.

Members’ views differed as to whether this should be handled as a specific question or whether it should come under the three pillars of the agriculture negotiations (market access, domestic support and export subsidies). They also differed over the question of compensation, how it should be paid, for example whether it should be development assistance, and who should handle it — the WTO does not have development funding except for training officials in WTO affairs.

No conclusion was reached in Cancún and in early 2004 the debate continued, including how the discussion fits in with the negotiations and the Doha Development Agenda.

  

The Cancún draft  back to top

This is not part of the agriculture frameworks, but a separate paragraph in the draft declaration.

  

August 2004 framework: cotton  back to top

In the August 2004 main text, members say they consider the cotton initiative to be important in both of its two main points: the trade issues covered by the framework and the development issues. The two are linked.

Development: Referring to the WTO Secretariat’s 23-24 March workshop on cotton in Cotonou, Benin, and other activities, the main part of the text instructs the Secretariat and the director general to continue to work with the development community and international organizations (World Bank, IMF, FAO, International Trade Centre), and to report regularly to the General Council. Members themselves, particularly developed countries, “should” engage in similar work.

Trade: The annex (the “framework”) instructs the agriculture negotiations (the “Special Session” of the Agriculture Committee) to ensure that the cotton issue is given “appropriate” priority, and is independent of other sectoral initiatives. It says that both the overall approach of the framework and the cotton initiative itself are the basis for ensuring that the cotton issue is handled ambitiously, quickly and specifically within the agriculture negotiations.

  

Cotton Sub-Committee  back to top

The Cotton Sub-Committee was set up under the framework at the 19 November 2004 meeting of the agriculture negotiations. Its purpose is to focus on cotton as a specific issue in the agriculture talks.

The terms of reference say the sub-committee will be open to all WTO members and observer governments. International organizations that are observers in the agriculture negotiations will also be observers in the sub-committee. It will report periodically to the agriculture negotiations body, which in turn reports to the Trade Negotiations Committee, General Council and Ministerial Conference.

The July Package decision of 1 August 2004 stipulates that cotton will be addressed “ambitiously, expeditiously and specifically” within the agriculture negotiations. The sub-committee is tasked to work on “all trade-distorting policies affecting the sector”, in the “three pillars of market access, domestic support, and export competition” as specified in the 2001 Doha Declaration, which launched the current negotiations, and the “framework” text, which is part of the July 2004 Package decision.

Its work will take into account the need for “coherence between trade and development aspects of the cotton issue”. This is a reference to the two major components of the original proposal: trade, which is covered by the negotiations on trade barriers, domestic support and export subsidies; and development, which covers various aspects of helping the less developed cotton producers face market conditions and other needs.

More on the Cotton Sub-Committee

 

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