DEVELOPMENT: COTTON DEVELOPMENT ASSISTANCE CONSULTATIONS
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.
The discussions included a dedicated meeting to review the trade-related developments in the cotton sector and a session of the Director-General’s Consultative Framework Mechanism on Cotton, which deals with the development aspects of cotton and was chaired by Deputy Director-General David Shark.
Ambassador Eloi Laourou of Benin, speaking on behalf of the four West African cotton-producing countries - Benin, Burkina Faso, Mali and Chad (Cotton-4) – stressed that “domestic support remains the cornerstone of the cotton trade problem”. Ambassador Laourou said that the Cotton-4 countries had reflected on their priorities for cotton negotiations when they gathered at the 5th ministerial meeting of the Cotton-4 that took place on 18-21 April 2017 in Cotonou, Benin. He reminded members that these priorities are to follow-up on the effective implementation of all WTO ministerial decisions on cotton and the progressive phase-out of all forms of trade-distorting domestic support for cotton and its by-products .
Ambassador Karau welcomed the recent submissions in the agriculture negotiations and noted several members’ support for an outcome on cotton that should go “one step further than for domestic support in general”. Meanwhile, he noted that a couple of delegations had expressed their lack of optimism, taking into account the overall negotiation prospects.
The Cotton-4 countries signalled their intention to table a proposal on a possible outcome on domestic support for cotton at the WTO’s 11th Ministerial Conference to take place in Buenos Aires in December 2017.
Updated information on trade policies in cotton
“Our negotiation must absolutely be based on recent and up-to-date data on members’ policies and support levels, especially in terms of domestic support,” Ambassador Karau told members.
At the dedicated meeting on cotton, a background paper prepared by the WTO Secretariat (TN/AG/GEN/34/Rev.6 and its Addendum) was discussed. This revised paper provides updated information on cotton based on new notifications, and includes new tables showing export volumes and share of world exports for major cotton exporters.
“These dedicated discussions provide a unique opportunity to get the facts right about members’ cotton trade-related policies from a WTO perspective and to have a constructive exchange around these facts and relevant related developments,” said Ambassador Karau. He noted that this process is about monitoring, examination, identification and transparency. As such, this process is not a negotiation process but is of great importance to inform the negotiation.
The WTO Secretariat and the International Trade Centre (ITC) gave a presentation on the market analysis tools that can help members better understand the trade trends and policies in the cotton sector and presented a project that would provide a single entry point containing all the information available in the various WTO and ITC databases on market access, trade statistics, notified requirements, country-specific business contacts, etc. This proposed “cotton portal” was welcomed by members.
According to a presentation by the International Cotton Advisory Committee (ICAC), the global cotton market is still characterized by a high level of cotton stocks while production has remained stagnant in recent years. India is now the largest cotton producer in the world, followed by China and the United States, and the yields for many African cotton producers are still low with some potential to catch up in the coming years. The United States is the main cotton exporting country, followed by West Africa and India. Bangladesh is now the largest importer, followed by Viet Nam and China.
The Cotton-4 also highlighted the importance of diversifying cotton products for export. Ambassador Sékou Cissé of Mali highlighted African leaders’ commitment to develop cotton value chains in Africa, upgrade skills and create more jobs in the sector. He noted that African cotton value chains are rich in knowhow and traditional craft, and are especially beneficial for women. To achieve tangible results, donors, governments and the private sector must work together to ensure the inclusive and sustainable development of cotton value chains.
Cotton development assistance
In briefing members on the evolving table used to monitor the development assistance provided for cotton, the WTO Secretariat noted that Brazil, Canada, the European Union, Japan and Switzerland as well as the International Trade Centre (ITC) and United Nations Conference on Trade and Development (UNCTAD) had provided updates on their assistance for cotton. China has also provided several training courses to a number of African countries on cotton growing and spinning technology. China funded the participation of the Cotton-4 focal points to attend the meeting.
Members also shared information on on-going implementation projects: for instance, the Cotton Roadmap project, an integrated regional project on cotton value chains coordinated by Benin. Various representatives also shared information on national reforms in the cotton sector, highlighting progress and challenges ahead.
“I am pleased to report that the figures in the latest version of the table show that progress has continued in providing development assistance to the cotton sector. There has been, in particular, an improvement in the ratio between commitments and disbursements which relates to cotton specific development assistance,” Director-General Roberto Azevêdo said in a cover note accompanying the Evolving Table.
The interim Executive Director and the newly appointed Executive Director of ICAC participated in the meeting. ICAC made a presentation on the challenges and opportunities to improve cotton mill use in Africa.
The Chairman of COS-Cotton, a steering and monitoring committee of the EU-Africa Partnership on Cotton based in Brussels, highlighted the need for African cotton-producing countries to change their model of development to add value in the cotton value chain.