Info Service on WTO and Trade Issues (Dec15/01)
1 December 2015
Third World Network
Cotton-4 shocked at
US ‘NO' to binding outcomes at Nairobi
Published in SUNS #8145 Monday 30 November 2015
Geneva, 27 Nov (D. Ravi Kanth) -- The four West African cotton-producing
countries - Benin, Burkina Faso, Mali, and Chad - on Thursday (26
November) received the biggest shock after the United States categorically
rejected binding outcomes at the Nairobi ministerial next month on
The Cotton-four had called for binding outcomes at Nairobi on duty-free
and quota-free market access for some 40 tariff lines and cuts in
trade-distorting domestic subsidies on cotton, several trade envoys
told the SUNS.
More aggressively, the US also maintained that the best endeavour
deliverables for the C-4 countries at Nairobi ministerial shall not
even be referenced to the previous Doha Development Agenda ministerial
mandates such as the 2004 July Framework Agreement, the 2005 Hong
Kong Ministerial Declaration, and the 2013 Bali ministerial declaration,
a C-4 trade envoy told the SUNS.
On Thursday, the chair for Doha agriculture negotiations Ambassador
Vangelis Vitalis of New Zealand convened a closed-door meeting with
trade envoys from around a dozen countries to discuss the possible
textual elements for the deliverables on cotton.
Countries that attended the meeting include the US, the EU, Brazil,
the four countries from West Africa, China, India, Pakistan, Colombia,
and Argentina among others.
Prior to the meeting, the chair on 23 November had suggested draft
textual elements on cotton to explore middle ground outcomes. The
chair's textual elements cover the three pillars of market access,
trade-distorting domestic support, and export competition pillar.
The elements include in market access:
a) Acknowledgement that more is needed to meet the objective of providing
DFQF access for cotton and other related products originating from
b) Confirmation that this objective will be pursued after MC10, based
on an evolving list ("the list") of products annexed to
c) Continuation of DFQF market access for products on the list originating
from LDCs by developed country Members and developing country Members
declaring themselves in a position to do so.
d) Ongoing efforts to improve existing duty-free and quota-free market
access coverage by Developing country Members which are unable to
grant DFQF market access for all the products on the list originating
e) Transparency and monitoring of the implementation of DFQF market
access on markets of interest to LDCs, based on existing notification
requirements and supplemented as necessary by additional requests
for information by the WTO Secretariat.
f) Review of the list and DFQF access granted for products on the
list originating from LDCs by the 11th Ministerial Conference.
g) Discussion of possible additional measures to improve market access,
including the elimination of non-tariff barriers.
In domestic support, the chair suggested the following elements:
* The C4 proposal for ambitious cuts submitted on 12 October.
* Standstill at current subsidy payment levels.
* Due restraint.
* Best endeavour.
In the export competition pillar, Ambassador Vitalis suggested elements
based on the Hong Kong Ministerial mandate that called for prohibition
of all forms of export subsidies for cotton.
On export subsidies, the chair suggested that the industrialized countries
must eliminate all their export subsidies for cotton by 1 January
2017 and the developing countries by 1 January 2018.
Further, the chair said that "to the extent that new disciplines
and commitments for export credits, export credit guarantees or insurance
programmes, agricultural exporting state trading enterprises and international
food aid create new and additional obligations for Members as regards
cotton, any such obligations shall be implemented by 1 January 2016
for developed country Members, and by 1 January 2018 for developing
At the meeting on Thursday, the C-4 countries demanded binding outcomes
in all three pillars at the Nairobi ministerial beginning on 15 December.
The four African countries said they had waited for more than ten
years for binding outcomes to address the worst crisis they are facing
for the past many years.
The four African countries praised the chair for his relentless efforts
to find a suitable landing zone but they cautioned that only binding
outcomes - "ambitiously, expeditiously, and specifically"
as mandated in the 2005 Hong Kong Ministerial Declaration - will address
their grave crisis.
The C-4 countries circulated a detailed draft ministerial decision
on 12 October listing out the proposed outcomes in the three pillars
- market access, domestic support, and export competition - on a binding
They argued that their proposal is the basis for negotiating the final
outcomes at the Nairobi meeting, an African trade envoy told the SUNS.
In a belligerent response to the C-4 proposal, the US said it will
not accept binding outcomes in all three pillars and will also not
agree to any mention of the previous Doha ministerial mandates in
the Nairobi deliverables, according to the African envoy.
The US said it can only agree for best endeavour outcomes but not
standstill or due restraint provisions for reducing trade-distorting
Other developed countries such as the EU were willing to consider
binding outcomes in the market access (everything but arms), trade-distorting
domestic subsidies (except in blue box and green box measure), and
export competition pillar, the African envoy said.
China and India said they will provide DFQF access in market access
over 90% but ruled out binding provisions as they are not required
to do under the 2005 Hong Kong Ministerial Declaration. "Both
China and India addressed our concerns in market access," according
to the African trade envoy.
The C-4 countries said they cannot accept the US position to deny
binding outcomes as well as avoid referencing the deliverables to
the previous Doha ministerial mandates.
The four countries threatened that they will take their battle over
the binding commitments for cotton to Nairobi.
"As the conference is taking place in Africa, we shall have concrete
results in terms of the level of commitments and time-frame for implementing
the outcomes," the African envoy said. "We are frustrated
over the response we heard today at the meeting from the US,"
the envoy said.
"The US' stance has made one thing clear," said another
trade envoy who took part in the meeting. "Even before deciding
on reaffirming continuation of negotiations on outstanding issues
of the DDA after the Nairobi meeting, the US seems to have embarked
on a warpath to ensure that there is no mention of the DDA decisions
in the cotton outcome," the envoy suggested.
From the US position on cotton at the meeting, "it clear that
the Bali decisions will be repeated at the Nairobi ministerial so
to ensure that the package of outcomes for the least-developed countries
will be an empty bag of meaningless decisions," the envoy argued.
Meanwhile, the G-33 group of developing countries on Wednesday ( 25
November) upped the ante on their deliverable for a permanent solution
for public stockholding programs for food security at the World Trade
Organization's Nairobi ministerial next month.
The chair for Doha agriculture negotiations Ambassador Vitalis convened
the closed-door meeting on Wednesday to discuss the G-33 draft ministerial
decision on the permanent solution.
Countries that attended the meeting include the US, the EU, Australia,
Brazil, Paraguay, Indonesia, China, India, the Philippines, and Nigeria.
Indonesia provided a detailed account of the four-page draft decision
that calls for amending the WTO's Agreement on Agriculture by inserting
a new annex six to cover the domestic subsidies underpinning the public
stockholding for food security purposes.
The G-33 draft decision maintained that programmes for the acquisition
of foodstuffs at administered prices by developing and poorest countries
"with the objective of supporting low income or resource poor
producer," and "subsequent distribution at subsidized prices
with the objective of meeting food security requirements," shall
be exempt from subsidy reduction commitments.
Australia raised extraneous issues about the draft decision asking
whether it would properly address the "unintended consequences."
The G-33 proposal, according to Australia, will create another "green
The EU maintained that it wants to engage constructively in finding
a permanent solution. But the real deadline for finding the permanent
solution is the eleventh ministerial conference in end-2017, and not
the Nairobi ministerial, the EU argued.
At the Bali ministerial, trade ministers set a deadline for finding
the permanent solution by end-2017, at the eleventh ministerial meeting
while members at the General Council had mandated making all concerted
efforts to resolve this issue by 31 December 2015.
The EU suggested that the General Council's decision last year carries
legally less weight than what ministers had decided at the Bali ministerial
meeting in December 2013.
The EU said the G-33 countries must start implementing the interim
solution as worked out at the Bali ministerial in December 2013, instead
of asking for a permanent solution.
The US said it remains committed to public stockholding discussion
but the latest G-33 proposal doesn't change the substance of retaining
such programs in the green box, according to participants familiar
with the meeting.
The US also said that "amending the AoA [Agreement on Agriculture]
is not the right way."
Pakistan defended the EU's stand by arguing that the Bali decision
struck the right balance. Further, the public stockholding programs
will lead to unsustainable production as well as undermine reform
of global farm trade, Pakistan maintained.
Brazil said it is seriously concerned about the "unintended consequences"
- which the proponents have not addressed in the draft decision. Paraguay
said the G-33 proposal offers a huge carve-out from exempting the
food security programs from subsidy disciplines.
China said if members have objections about including the public stockholding
programs in the green box, then, they must suggest in which box they
must be placed.
India dismissed the concerns raised by Australia, the EU, US, and
Brazil, saying that those countries that are speaking about farm trade
reforms remain silent about the huge subsidies provided by few major
India said pointedly to the EU that interpretation of the General
Council decision on public stockholding programs last year is plainly
India said the GC decision to conclude a permanent solution by December
is on the same footing as any decision taken by ministers at a ministerial
because the GC has the power to take decisions during the inter-ministerial
conferences, according to people familiar with the meeting.
Some countries, said India, spoke about "unintended consequences"
but have not given any suggestions on how they can be addressed, according
to participants familiar with the meeting.
India asked the opponents pointedly whether they are rejecting the
G-33 proposal for permanent solution on the ground that the interim
solution is adequate and will not require change, according to people
familiar with the meeting.
In response, the EU said "we are not rejecting the G-33 proposal
but in the current form it cannot be accepted," said a person
who was present at the meeting.
With less than two weeks left for the Nairobi ministerial, the developing
and poorest countries are all set to face a scorched earth policy
effort by the US and its allies on African soil that will result in
developing countries and LDCs not only returning from the meeting
with empty hands but worse still, suffer the most humiliating outcome
in which the Doha Round is put to bed without any trace, an African
trade envoy warned. +