THIS NEWS STORY 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.

> cotton, including the sub-committee
> Agriculture negotiations: www.wto.org/agnegs
> Development: www.wto.org/development

The chairperson of the agriculture negotiations, Ambassador John Adank of New Zealand, said: “With only five months left before the Nairobi Ministerial Conference, we need to engage without any further delay in a more focused negotiation on what could constitute a possible specific outcome on cotton.”

This was the third of a series of meetings following the decision on cotton agreed at the Bali Ministerial Conference in December 2013. In this decision, members said they would hold “dedicated discussions” twice a year to “enhance transparency and monitoring” of cotton trade policy.


Possible outcome in Nairobi

Chairperson Adank updated members on the broader picture of the agriculture negotiations and recalled that the decision in December 2013 reaffirmed members’ commitment to address cotton “ambitiously, expeditiously and specifically” within the agricultural negotiations. “I think there is no doubt amongst you that cotton will be part of any outcome coming out of the 10th Ministerial Conference in Nairobi,” said chairperson Adank.

Ambassador Adank described his views on the current status of the cotton negotiations with regards to the three pillars of agricultural reform in export competition, market access and domestic support.

On export subsidies, Ambassador Adank suggested that a specific outcome on cotton could be envisaged in the context of a wider outcome in the export competition pillar. On market access, he noted that the objective is to achieve duty free and quota free access for cotton exports from least-developed countries (LDCs) to developed countries and to increase import opportunities in developing countries. He invited members to express their views on the possibility of granting such improved market access. On domestic support, Ambassador Adank admitted that the overall situation in the agriculture negotiations remains uncertain, "but the overall uncertainty should not hide the fact that a specific domestic support outcome on cotton should be part of any final outcome in the Doha Round negotiations".

Members, in particular the “Cotton 4” countries (Benin, Burkina Faso, Chad and Mali), generally shared the Chair’s assessment and a few members signalled certain reservations on how to approach the negotiations.


Trade policies

Members welcomed the latest WTO Secretariat document (TN/AG/GEN/34/Rev.2) outlining information on cotton subsidies and other policies. The document was based on members’ notifications, replies to a questionnaire circulated on 4 February 2015, and relevant information on cotton markets and policies from the WTO's Trade Policy Review reports.  

Several participants — including the “Cotton 4” countries, Australia, Argentina, the United States and the European Union — urged members to respect their notification obligations and to provide the latest information on their policy measures.

The "Cotton 4" group and various members sought clarifications on a few points and suggested the inclusion of additional summary information in future updates.

The United States announced that on 29 June it had extended its Generalised System of Preference scheme, allowing the relevant legislative authority to eliminate import duties on cotton imports from LDCs on five additional tariff lines. The measure is expected to enter into force in October.


Market situation

Members heard the latest market assessment by the International Cotton Advisory Committee (ICAC). Ms Rebecca Pandolph of ICAC noted that the United States remains the top exporter of cotton in 2015, with about 30% of total cotton exports, while India is the second-largest cotton exporter.  ICAC also noted that China is the largest cotton buyer and cotton stock holder in the world. Ms Pandolph summarised recent developments relating to government measures in the cotton sector.

More details are available in the ICAC’s presentation here (pdf).


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