19 November 2004

Sub-committee set up on cotton

WTO members on 19 November 2004 set up a body to focus on cotton as a specific issue in the agriculture talks, as required in the 1 August 2004 decision — sometimes called the “July Package” — covering all the WTO negotiations.

The agreement to create a body to focus specifically on cotton is WTO member governments’ latest response to proposals from four African countries — Benin, Burkina Faso, Chad and Mali — to tackle the sector.

Following consultations on the details of how the Sub-Committee on Cotton should operate, the formal meeting of the agriculture negotiations (the “Special Session” of the Agriculture Committee) agreed on the new body’s terms of reference, which draw on the July 2004 Package decision.

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 2004 Package 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 all three key areas of the agriculture talks — 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.

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The cotton initiative was originally raised both in the General Council and the agriculture negotiations by Benin, Burkina Faso, Chad and Mali. It describes the damage that the four believe has been caused to them by cotton subsidies in richer countries, calls for the subsidies to be eliminated, and for compensation to be paid to the four, while the subsidies are being paid out, 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 is now a Cancún Ministerial Conference document, WT/MIN(03)/W/2 and WT/MIN(03)/W/2/Add.1. It seeks 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 broader heading of agricultural subsidies and domestic support. They also differed over the question of compensation.

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August 2004 framework

In the main text (paragraph 1.b), 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”, paragraphs 4 and 5 ) 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.

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The decision

Committee on Agriculture, Special Session: Establishment of the Sub-Committee on Cotton

  1. Terms of reference: “Taking into account the need of coherence between trade and development aspects of the cotton issue and in accordance with the agreement under paragraph 1.b and paragraphs 4 and 5 of Annex A of the Decision adopted by the General Council on 1 August 2004 (WT/L/579 refers) to address cotton ambitiously, expeditiously, and specifically, within the agriculture negotiations, to work on all trade-distorting policies affecting the sector in all three pillars of market access, domestic support, and export competition, as specified in the Doha text and the Framework text.”.

  2. While recognizing the great importance of the work of this Sub-Committee to particular Members, the Sub-Committee meetings shall be open to all WTO Members and Observer Governments.

  3. The Observer International Organizations of the Special Session of the Committee on Agriculture shall have observer status in the Sub-Committee on Cotton.

  4. The rules of procedure of the Special Session of the Committee on Agriculture shall apply, mutatis, mutandis.

  5. The Sub-Committee shall report periodically to the Special Session of the Committee on Agriculture which in turn will report to the TNC, the General Council and the next Ministerial Conference.