TWN Info Service on WTO and Trade Issues (June10/01)
14 June 2010
Third World Network

Complaints voiced at WTO over lack of progress on cotton
Published in SUNS #6940 dated 9 June 2010

Geneva, 8 Jun (Kanaga Raja) -- A number of developing-country Members of the World Trade Organization (WTO) on Monday complained about the lack of progress on the issue of cotton, stressing that there can be no successful conclusion to the Doha Round of trade negotiations without a resolution of this issue.

The concerns over the cotton issue surfaced during the eighth round of consultations under the WTO Director-General's consultative framework on cotton.

The various comments showed that there is no progress on the issue - with the United States, a major subsidiser of cotton production and export, giving no ground, but merely repeating its positions.

The consultations were chaired by Deputy Director-General Harsha Singh on behalf of Director-General Pascal Lamy.

According to trade officials, the consultations are mainly about the development or aid aspects of the cotton issue. However, this time around, a number of comments were made by Members on the trade policy aspects of the cotton issue, namely, in the context of the Doha Development Agenda (DDA) negotiations.

According to trade officials, Minister Leonce Kone of Burkina Faso, speaking on behalf of the "Cotton Four" (Benin, Burkina Faso, Chad and Mali), expressed regret that Members are still far from achieving the objectives set at the Hong Kong Ministerial Conference (in 2005) of treating the distortions in the cotton trade "ambitiously, expeditiously and specifically".

He added that the present rhythm of the negotiations does not give ground for optimism.

[Paragraph 11 of the Hong Kong Ministerial Declaration states: "We recall the mandate given by the Members in the Decision adopted by the General Council on 1 August 2004 to address cotton ambitiously, expeditiously and specifically, within the agriculture negotiations in relation to 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 July 2004 Framework text. We note the work already undertaken in the Sub-Committee on Cotton and the proposals made with regard to this matter.

["Without prejudice to Members' current WTO rights and obligations, including those flowing from actions taken by the Dispute Settlement Body, we reaffirm our commitment to ensure having an explicit decision on cotton within the agriculture negotiations and through the Sub-Committee on Cotton ambitiously, expeditiously and specifically as follows:

[-- All forms of export subsidies for cotton will be eliminated by developed countries in 2006.

[-- On market access, developed countries will give duty- and quota-free access for cotton exports from least-developed countries (LDCs) from the commencement of the implementation period.

[-- Members agree that the objective is that, as an outcome for the negotiations, trade distorting domestic subsidies for cotton production be reduced more ambitiously than under whatever general formula is agreed and that it should be implemented over a shorter period of time than generally applicable. We commit ourselves to give priority in the negotiations to reach such an outcome."]

[Paragraph 12 of the Hong Kong Ministerial Declaration states: "With regard to the development assistance aspects of cotton, we welcome the Consultative Framework process initiated by the Director-General to implement the decisions on these aspects pursuant to paragraph 1. b of the Decision adopted by the General Council on 1 August 2004. We take note of his Periodic Reports and the positive evolution of development assistance noted therein. We urge the Director-General to further intensify his consultative efforts with bilateral donors and with multilateral and regional institutions, with emphasis on improved coherence, coordination and enhanced implementation and to explore the possibility of establishing through such institutions a mechanism to deal with income declines in the cotton sector until the end of subsidies.

["Noting the importance of achieving enhanced efficiency and competitiveness in the cotton producing process, we urge the development community to further scale up its cotton-specific assistance and to support the efforts of the Director-General. In this context, we urge Members to promote and support South-South cooperation, including transfer of technology. We welcome the domestic reform efforts by African cotton producers aimed at enhancing the productivity and efficiency, and encourage them to deepen this process. We reaffirm the complementarity of the trade policy and development assistance aspects of cotton. We invite the Director-General to furnish a third Periodic Report to our next Session with updates, at appropriate intervals in the meantime, to the General Council, while keeping the Sub-Committee on Cotton fully informed of progress. Finally, as regards follow up and monitoring, we request the Director-General to set up an appropriate follow-up and monitoring mechanism."]

According to trade officials, Brazil, speaking on behalf of the G-20, referred to the unfair competition faced by developing countries in the face of subsidies given by developed countries.

It voiced both disappointment and concern that the current negotiations are deadlocked and are even backtracking in the consultations of the Special Session of the Committee on Agriculture (where the agriculture negotiations are taking place).

According to trade officials, India also expressed disappointment over the lack of progress and stressed that if there is no resolution to this problem, there can be no successful conclusion of the Doha Round.

Tanzania complained that none of the three aspects of the cotton negotiations has been addressed to date and nothing of substance has been reported since 2005.

According to trade officials, Tanzania asked for the subsidies (to cotton) to be stopped, pointing out that technical assistance and capacity building, without the reduction of subsidies, leads to nowhere.

It also said that everyone talks about how important cotton is but nothing seems to be happening.

China said that the substantive negotiations are deadlocked and there won't be any DDA unless the cotton problem is solved.

According to trade officials, this view was also shared by Argentina.

The European Union said that it is acting according to the mandate of the 2005 Hong Kong Ministerial Conference by not giving Amber Box support (price or income support of the most trade-distorting kinds), not providing export refunds, as well as liberalizing access to markets.

The United States was of the view that Members first have to agree on the general content on the three pillars of the agriculture negotiations (market access, domestic support, export subsidies and other aspects of export competition) before addressing the issue of cotton. +