Cotton producers call for an outcome on cotton at MC11

Cotton-producing countries have urged the WTO to tackle the longstanding subsidy-induced distortion of trade in the crop at its next Ministerial Conference.

by Kanaga Raja

GENEVA: The Cotton-4 grouping as well as other cotton-producing countries including India, Pakistan, Senegal and Nigeria have called on members of the WTO to reinforce the dynamics in the negotiations so as to come up with a “fair and balanced outcome” on cotton at the eleventh WTO Ministerial Conference (MC11) in Buenos Aires next December.

According to trade officials, the call from these countries came during the latest round of consultations on cotton, held on 23 November by the chair of the agriculture negotiations, Ambassador Vangelis Vitalis of New Zealand.

The consultations also included the sixth dedicated discussion on trade-related developments for cotton and the 26th session of the Director-General’s Consultative Framework Mechanism on Cotton.

According to trade officials, the chair said that most WTO members consider an outcome on domestic support for cotton “a priority” for the Buenos Aires Ministerial Conference.

While welcoming the recent submissions and “intense debates” among the members, the chair however said that “none of the new submissions enjoyed consensus so far”.

Vitalis reiterated that for “the overwhelming majority of WTO members”, an outcome on domestic subsidies at MC11 should include a decision on cotton.

Lack of progress

Mali, on behalf of the Cotton-4 countries (Burkina Faso, Benin, Chad and Mali), said that the Nairobi Ministerial Conference in 2015 “marked an important step to arrive at a negotiated global solution for cotton.” However, it expressed regret over the lack of progress since the last session in July, especially on issues where no binding commitments were made in Nairobi.

According to trade officials, Mali said that the meeting of the Cotton-4 ministers in Bamako, Mali, on 26-28 October had launched an urgent appeal to eliminate all forms of export subsidies and domestic support for the production and marketing of cotton before MC11.

Vitalis welcomed the recent submissions on domestic support that were discussed at a meeting of the Special Session of the WTO Agriculture Committee on 16-17 November. He said that these submissions “show members’ willingness to take negotiations forward”.

“While none of the ideas or options enjoyed consensus so far, the intensity of the debates was encouraging,” he said.

The Cotton-4 had indicated earlier on 16 November that they intend to table soon a contribution on a possible outcome on domestic support for cotton at MC11.

The Cotton-4 and the least-developed countries (LDCs) also highlighted the increasing costs of cotton production in their countries, despite a global trend downward. They said that this, together with a drop in the prices obtained by cotton producers, is a threat to all efforts made by African cotton producers in their domestic reforms to enhance their competitiveness.

Meanwhile, according to a presentation made by the Executive Director of the International Cotton Advisory Committee (ICAC), Jose Sette, over 88% of cotton production in Africa is exported.

Sette said cotton exports have remained stable over recent years and direct assistance to cotton has decreased from $10.7 billion in 2014-15 to $7.2 billion in 2015-16, although this is still the third largest amount since 1997.

The ICAC said China’s demand for cotton has decreased by 24% between 2013 and 2016 due to record-breaking national reserves in 2014, but demand is forecast to go back up in 2017.

According to trade officials, the Cotton-4 stressed the need to consider environmental, social and economic indicators when monitoring global trends in the cotton industry.

It called on WTO members to help small-scale cotton producers to make a living out of cotton exports.

The Cotton-4 also pointed to the importance of diversifying the group’s cotton exports by transforming raw material locally.

Ambassador Eloi Laourou of Benin, a member of the Cotton-4 group, presented his country’s recent initiative to incentivize public-private partnerships to this end.                                               p

According to trade officials, the chair again voiced concerns about the “lack of critical information from key players in the cotton market” on how they support their farmers. He said that this is “disastrous from a systemic point of view” and “highly problematic” for the negotiations.

To date, he noted, six (Brazil, Hong Kong-China, New Zealand, Norway, Russia and South Africa) among the 32 WTO members identified as potential markets of interest for LDCs have notified their domestic support measures up to at least 2014.

The chair called on members to reply to the cotton questionnaire that the WTO secretariat circulates on a biannual basis.

According to trade officials, Benin, on behalf of the LDCs, deplored the lack of updated data on the volume of members’ domestic support by category and of commitments to reduce domestic support. It said that members’ silence to the concerns of the LDCs is “worrying” because domestic support measures are distorting cotton trade.

The LDCs called on concerned members to supply the necessary information before the end of 2016.

On the issue of development assistance provided for cotton, the WTO secretariat briefed members on the evolving table used to monitor the assistance. It noted that the number of committed projects and programmes has increased from 46 in July to 67 presently.

According to trade officials, Japan briefed members on latest updates and support initiatives that it has extended to the African region, while Brazil and China also briefed members on their contribution to South-South cooperation in the cotton sector. (SUNS8365)                   p