DG Azevêdo pays tribute to Mali’s leadership on cotton issues

Ministers,
Excellencies,
Ladies and gentlemen,

Good morning. It is a great pleasure to join you in Bamako today, and to discuss these important issues.

I would like to pay homage to the tireless efforts of the C4 countries - Chad, Benin, Burkina Faso and Mali - to advance your interests both in Geneva and in capitals. I also want to welcome the active and constructive role played by Mali, and previously Burkina Faso and Benin, as coordinator of the C4.

I will use my remarks today to update you on the latest developments on cotton at the WTO, and also to discuss the broader work going on at the WTO which I think is also important for the C4 countries to consider.

Cotton has always been considered a litmus test of WTO Members' commitment to delivering development-oriented negotiations and outcomes, especially in favour of LDCs.

That remains the case today. We have to ensure that the trading system works for you.

And I think there are a range of challenges before us.

For example, we need to respond to challenges in improving productivity. We also need to respond to changes in the market. We are seeing a major shift among cotton importers with China's imports continuing to decline at quite a dramatic rate. So C4 countries will need to seek to reposition themselves in markets of emerging cotton importers such as Bangladesh and Viet Nam.

And, of course, we need to keep working to reform the global trading system so that you can compete fairly in international markets.

The WTO has an important role to play here. I think we have begun to make progress - and I am hopeful that we can achieve more in the near future.

Agriculture issues, including cotton, will need to be an important part of this discussion.

This was a clear message that I heard from many ministers at a WTO informal ministerial meeting convened by Norway in Oslo last weekend.

That said, I cannot pretend that at the present moment the path forward on these issues is clear, or that it will be straightforward.

This is why I want to work with all of you to make sure that we identify that path.

Cotton has come to the forefront of the WTO negotiating agenda since the C4 Sectoral Initiative in Favour of Cotton was launched in 2003.

And we have been able to take some significant steps.

At our Ministerial Conferences in Bali in 2013 - and even more so in Nairobi in 2015 - WTO Members delivered a number of significant and encouraging outcomes for cotton …

• Members agreed on the elimination of export subsidies for cotton, and disciplines on export measures with equivalent effect. Indeed, the Nairobi Decision on Export Competition mandates that this should happen at a quicker pace for cotton than other products.
• They also agreed to a specific transparency process to examine cotton trade-related developments. These dedicated discussions will take place twice a year.
• And we reaffirmed the decision to grant duty-free quota-free market access for LDC exports of cotton and cotton-related agricultural products. This commitment was made by developed countries, and developing countries in a position to do so.

Ministers also expressed their shared commitment to keep working on the cotton issue as a priority.

We need to work together to ensure that this commitment is delivered upon.

And we have established and recognized mechanisms to do so.

Indeed, pursuant to the Bali Decision on Cotton in 2013, as reaffirmed in Nairobi, the WTO organizes a full day of discussions dedicated to cotton twice a year. The next "cotton day" is scheduled for 23 November.

So I think this is important progress. But, of course, there is much more to do.

Action on domestic support for cotton remains an important missing element.

Progress here is very much linked with the overall progress in the agricultural negotiations - and despite our best efforts this has so far proved very difficult to achieve.

So we need to put renewed energy into this work.

Nevertheless, I think there are reasons to be optimistic about the work in Geneva.

The successes of the Bali and Nairobi Ministerial Conferences have energized the Membership. Engagement is higher than it has been for some years. Members want to deliver more.

Several of the issues on the agenda may be of interest to you and I would encourage you to engage in these conversations which are still at an early stage.

I think this could open up new opportunities to make progress - including, potentially, on cotton issues.

Members remain strongly committed to delivering for development - particularly for LDCs - and to advancing negotiations on the Doha issues that are still open.

Indeed, this was the clear message I picked up in Oslo. Over 20 countries attended that meeting - with developed, developing and least developed countries represented, including Benin as LDC coordinator.

Many stressed the importance of action on domestic support - including cotton. This is encouraging, but the challenge remains considerable.

Other issues on the table for discussion included, for example, fisheries subsidies, domestic regulation in services, investment facilitation, services facilitation, e-commerce and micro, small and medium-sized companies - or MSMEs.

Some of these issues can be very important for this region - and for LDCs more broadly.

For example, MSMEs account for a huge proportion of companies in LDCs - around 90%. These firms can play an important role in economic and social development in LDCs.

However, WTO research suggests there is a "missing middle" in LDCs. There are lots of micro and small firms - but there are very few medium-sized firms. One reason for this is that the smaller firms don't have the opportunity to grow.

Their direct participation in trade is low. Their Internet access is more limited than that of the larger enterprises, making it more difficult to use the potential of technology to overcome trade barriers, such as costs and distance.

Only one in four people in Africa use the Internet - and only one in seven people in LDCs. This hinders business development. Tackling this challenge could change the outlook, even for many small agricultural producers, which account for the largest share of these firms in LDCs.

All countries have an Internet connectivity gap between small and large firms, but this gap is especially large in LDCs. The connectivity score of small firms in LDCs attains only 22%, as compared to 64% in developed countries.

Of course, in order to do business online, communication services must be accessible and cheap.

And these connectivity issues are particularly significant in LDCs.

There is huge potential here to use technology as a springboard, particularly for smaller companies. This would require significant investment - with a range of donors, governments and international organizations working together.

Indeed the key to advancing these issues at the WTO is to ensure that the interests of developing countries and LDCs can be taken into account.

Your participation in these discussions can help ensure this is the case. For example, I don't see why the provision of technical assistance and cooperation with other international organizations like the World Bank or regional development banks, shouldn't be a key component of any work that is taken forward.

The WTO's Aid-for-Trade Initiative is another vehicle that can be used. It is doing good work in helping developing countries to address the problems in their trading infrastructure.

Since 2006 over 260 billion dollars have been disbursed through this Initiative. And this work puts a significant focus on MSME internationalization. Aid for Trade for MSME development has risen by around 50% between 2005 and 2013.

Next July, we will be holding the 6th Global Review of Aid for Trade at the WTO, and Members will be putting a particular focus on connectivity.

I think discussions on these issues at the WTO may prove very positive - and even fundamental - for LDCs.

Working with a range of partners, we could move forward in tackling the broader infrastructural and connectivity issues.

The WTO Trade Facilitation Agreement could be a useful model. Under that Agreement a range of practical, capacity-building support is on offer, through a range of agencies. Members could look to follow a similar model in their current discussions.

On this point, I want to mention the importance of ratifying the Trade Facilitation Agreement. This Agreement can boost world exports by approximately 1 trillion dollars. Most of the gains will be for the developing countries, and especially the LDCs. We now have almost 100, which takes us very close to the threshold at which the Agreement will come into force.

If you haven't yet completed your ratification I would urge you to do so. It will help you to access the benefits of the Agreement and the practical assistance that is being made available. This is a matter of great importance for the multilateral trading system, and I would ask you for your attention and personal commitment in securing the conclusion of the ratification process in your countries. It would be a demonstration of support and political commitment to the WTO.

In addition, I would urge you to ratify the TRIPS amendment on access to medicines.

This amendment was made at the request of the WTO's African Members - and again we are very near the threshold of ratifications needed for entry into force. So, if you have not done so already, I would ask that you look into taking this simple but important step. Ratification of the amendment does not require any change in your countries' polices, laws or regulations. I note with great satisfaction that our host, Mali, has set an example and has already ratified the Trade Facilitation Agreement as well as the amendment to the TRIPS Agreement.

The WTO Secretariat is ready to help on any of these issues.

With all this in mind, I would like to reaffirm that there is a mood of optimism at the WTO given our recent successes.

I think the kind of positive, proactive engagement we are seeing can create a more dynamic atmosphere where real progress can be made. This could include progress on areas which have long been stalled - including cotton.

Members have an opportunity to deliver some important outcomes in the years ahead - including as we look to the 11th Ministerial Conference in Buenos Aires in December next year.

So I think we should keep trying to make incremental progress, and build on the successes of recent years.

We are moving in the right direction - so let's keep pushing forward.

Thank you.