Cote d'Ivoire attended the cotton days for the first time as a Cotton 4 (C4) observer country following its application for observer status at the C4 ministerial meeting in N'Djamena, Chad.

At the two-day meeting, known as the WTO “cotton days”, WTO members discussed both the latest developments in cotton trade and the assistance provided to developing countries. At the end of the two days, WTO members endorsed the joint initiative of the WTO, the United Nations Conference on Trade and Development (UNCTAD) and the International Trade Centre (ITC) to enhance the economic potential of cotton by-products.

Development assistance

DG Evolving Table and project presentations

According to the latest version of the Director-General's Evolving Table on Cotton Development Assistance (WT/CFMC/6/Rev.25, 15 November 2018) prepared by the WTO Secretariat to keep record of all cotton-related development assistance projects, 29 active cotton-specific projects have been recorded, benefiting 32 countries. This reflects an increase in development assistance in this area. Three new projects were recorded from GIZ-Germany and Switzerland. This is the 10th year that the evolving table exists in its current form (see flyer).

Members examined the Cotton 4’s "Cotton Roadmap Project" (WT/CFMC/W/73 and presentation by Amb. Laourou), including two country-specific projects from Mali and one from Benin. The Cotton 4 selected Mali to carry out two new pilot projects to address high soil acidity and improve yields. If successful, the model will be replicated in other countries. Benin proposed a project looking at the possibility of improving organic matter in soils by introducing more diversified crops. The estimated cost will be evaluated on a country-by-country basis.

The Brazilian Cooperation Agency presented its activities on cotton. Since 2015, Brazil has started a new trend of working with international organizations, such as the UN Food and Agriculture Organization and the World Health Organization to assist African countries in the development of the cotton sector. Thirty-six projects have been implemented, mostly in Africa and Latin America, and various new technical missions will start in December 2018.

Business sheds lights on how to tap into the cotton markets

Since the Cotton Day meeting of June 2018, the Consultative Mechanism has taken a pragmatic approach by bringing the private sector into the discussion. This time Mr Ryota Karube, President of the Japanese trading company Toyoshima Inc., introduced its business model and its role in linking African cotton producers to the international market. Toyoshima called for African farmers to build relations with trading companies and stressed the importance of developing strategies to exploit the increasing consumer-driven opportunities offered by cotton such as the Better Cotton Initiative and Cotton made in Africa.

Emphasizing the ministerial mandate on cotton development assistance, DDG Wolff, Chair of the Consultative Mechanism on behalf of Director-General Roberto Azevêdo, underlined the importance of "effective assistance" and invited beneficiaries to "continue identifying their needs linked to cotton or related sectors, including on a regional basis".

DDG Wolff video

Discussions on cotton policies and negotiation prospects

WTO members noted that the WTO cotton initiative, launched in 2003, has seen many historic moments over the past ten years, including:

• the 2013 Bali Ministerial Decision on Cotton, which introduced “dedicated discussions” twice a year for WTO members to address the trade-related developments that underpin cotton negotiations
• the 2015 Nairobi Ministerial Decision on Cotton, which committed members to abolish agricultural export subsidies for cotton as of 1 January 2017, with developed members and developing members with the capacity to do so agreeing to grant duty-free and quota-free market access for exports of cotton and cotton-related products from least-developed countries
• the launch of a joint WTO/ITC cotton portal at the 2017 Buenos Aires Ministerial Conference, with the aim of helping cotton producers, traders and policymakers better harness market opportunities in the cotton sector.

Recalling the vital importance of cotton for developing countries and least developed countries (LDCs), in particular for more than 30 African countries that produce and trade cotton, Ambassador Ford, Chair of the Dedicated Discussion, noted that "the 12th Ministerial Conference would be a perfect opportunity to fulfil the mandate of delivering ambitiously, expeditiously and specifically on cotton".

Amb. Ford video

The WTO Secretariat introduced the updates to the 9th revision of the background paper (TN/AG/GEN/34/Rev.9-TN/AG/SCC/GEN/13/Rev.9 and two addendums), which captures information on the three pillars of agriculture policies, namely market access, domestic support and export subsidies provided by members. Members expressed their appreciation for the background paper as an important and useful tool.

The C4 and several African countries called for members' engagement in cotton negotiations. The C4 reported on the C4 Ministerial Conference held in N'Djamena on 15 and 16 November where ministers expressed strong concern regarding the lack of results on cotton domestic support despite the strong mandate given by several WTO ministerial decisions, and urged WTO members to notify updated data to support that process.

In his update on the state of play of the negotiations on cotton, the Chair of the Committee on Agriculture in Special Session and Cotton sub-committee, Ambassador Deep Ford, acknowledged the call made by the C-4. He noted that "while there remained stark differences in the approaches to that end, some members have suggested looking into possible incremental options, including possibly a stand-alone outcome".

In conclusion, he said: "I am confident that if members continue to work together towards a common goal and if we step up our efforts, we can and will secure further achievements on cotton, including on the outstanding issue of trade-distorting domestic support." Ambassador Ford asked members to take advantage of the upcoming meeting of the Committee on Agriculture on 6-7 December and subsequent discussions to continue exploring possible options and ways to bridge the gaps.

US submission on cotton

The United States presented its first-ever paper on cotton (JOB/AG/144,25 September), an integral part of its work to "identify the challenges farmers face today that limit their ability to thrive and opportunities for trade liberalization to address these challenges". The new submission contains data on domestic support, market access and export subsidies for cotton for 23 WTO members involved in cotton production and trade.

In its paper, the US looks at the level of "water"(tariff overhang) between the average bound rate and the average applied tariff rate for cotton. The US also looks at the evolution of cotton-specific domestic support based on members' notifications as well as other sources (OECD and the International Cotton Advisory Committee) using different calculation methodologies. The US flagged the transparency issue surrounding members' notifications to the WTO, which made the notifications-based calculations less robust, and reiterated the importance of up-to-date data for well-informed negotiations.

The Cotton 4 and other WTO members welcomed the US submission and shared the US concerns on transparency. The Cotton 4 invited members to reply to the questionnaire circulated before the summer break as a complementary way to update the data.

First technical sessions on the Cotton Portal and ePing

At the request of the Cotton 4 countries, a first hands-on session on the new Cotton Portal was delivered by ITC. ITC agreed with the Cotton 4's suggestion to provide more online training sessions for officials in their capitals. The WTO Secretariat also introduced the cotton-related functions of the e-ping alert system, an online service for updates on product requirements in foreign markets.

The Cotton Portal, developed jointly by the WTO and ITC, was launched in Buenos Aires on 11 December 2017. It is a single-window portal for officials, farmers and traders and includes practical information, such as an export potential map and contact details of buyers in destination countries.

The WTO Secretariat made a presentation on ePing. ePing is an alert system on sanitary and phytosanitary measures and technical barriers to trade measures notified to the WTO. It assists producers, stakeholders and government officials in keeping track of product requirements in foreign markets, including for cotton.

Cotton trade trends and the issue of increasing African cotton yields

Mr Kai Hughes, the Executive Director of the ICAC, gave two presentations on the major trends in cotton trade and on the issue of increasing yields in Africa. According to ICAC, although global production will decrease slightly in 2019, African countries’ production is expected to continue to grow. On the consumption side, China remains the largest consumer and should surpass Bangladesh and Viet Nam to become once again the top cotton lint importer. Despite the negative correlation between subsidies and the price of cotton, the share of cotton receiving subsidies is expected to increase in 2018-2019.

ICAC showed confidence in the potential of the African cotton sector, which represents 12-14% of the global cotton area and comprises 3.5 million people. However, the average yield of lint cotton in African countries is below 200 kilogrammes per hectare, only 10% of Australia’s level. Various possible explanations were debated, such as the high ratio of rainfed cotton in Africa, pesticide problems, climate change, and shortage of technologies.

Visibility campaign on the WTO work on cotton

The WTO Secretariat has strengthened communication and outreach work through a new visibility campaign on cotton. This includes a social media campaign on Youtube and the WTO's social media accounts, while various communication tools and platforms have been introduced to the public, including a new cotton logo, a new dedicated cotton webpage for cotton days, flyers and a video campaign entitled “share your views on cotton!”.

Next meeting

The next "cotton days" are tentatively scheduled for early June 2019.

Links

All the videos and presentations can be found in the new dedicated page on "Cotton Days".

Contact the WTO Cotton Section for further information: cottonclub@wto.org.