Source: International Centre for Trade and Sustainable Development www.ictsd.org
Bridges: Weekly Trade News Digest Vol. 8, Number 12
An African Regional Workshop on Cotton, held in Benin from the 23-24 March, ended with no firm commitment on development assistance. The aim of the workshop, organised by the WTO, was to address development assistance aspects of an initiative on cotton subsidies that had been presented by four West African cotton producing countries -- Benin, Chad, Mali and Burkina Faso -- prior to last September's WTO Cancun Ministerial Conference (BRIDGES Weekly, 4 June 2003, http://www.ictsd.org/weekly/03-06-04/story3.htm). This proposal, submitted to the WTO Committee on Agriculture, called for the phase-out of subsidies to developed country cotton producers with a view to their total elimination, and for a compensation mechanism to offset the income loss experienced by producers in least developed countries until the completion of the phase-out.
According to a summary of the workshop outcome prepared by the WTO Secretariat, representatives of the Quad group -- the US, EC, Japan and Canada -- and intergovernmental institutions including the World Bank and IMF, merely identified existing and new programmes for financial and technical assistance and provided "positive indications of additional financial and technical assistance". However, no firm commitment was made on delivery or timelines. Members instead outlined areas of focus and delivery mechanisms for assistance, and highlighted the need for enhanced coordination and follow-up arrangements. Some participants, especially from West Africa, criticised the meeting, arguing that its focus on the development dimension was an attempt to deflect the debate from their main concern -- trade issues. The proponents of the cotton initiative have in fact stressed that they are not looking for handouts, but rather for a level playing field and a market undistorted by subsidies on which to sell their products.
At Cancun, no deal was reached on the cotton initiative. However, since the Cancun Ministerial, the proponents of the initiative have continued to push for it to be discussed in the WTO as a separate 'stand-alone issue' rather than as part of negotiations on agriculture. Their concern is that the issue could be subsumed under the difficult and slow negotiations on agriculture, losing its importance and urgency. Civil society groups have also called on the US and EC not to use promises on development funds for the African cotton sector as an excuse for not addressing trade issues such as subsidies, which continue to drive down the world price of cotton and threatening the livelihoods of farmers in developing countries, although world market prices recently have been rising.
Participants said it was evident that the cotton meeting was not about finding a solution to the trade dimension. As noted in the WTO report, "the trade aspects could only be meaningfully and effectively addressed within the broader DDA [Doha Development Agenda] agriculture negotiations". In his opening remarks to the workshop, WTO Director-General Supachai Panitchpakdi reiterated this point, noting that the view expressed by some African countries was that "progress on the trade policy aspects can best be made within the framework of the broader agriculture negotiations" (to see the full speech visit http://www.wto.org/english/news_e/spsp_e/spsp24_e.htm). Some African trade delegates interviewed insisted that this does not represent their position, which remains unchanged -- to have the issue of cotton discussed separately from agriculture.
Since the cotton initiative was submitted at the WTO, the US has sought to address the problem through a proposal to eliminate tariffs on textile and garment imports as well as development assistance in the form of international restructuring aid for cotton industries in Africa. In February this year, the EC unveiled a plan to help African countries dependent on cotton. This plan falls within the framework of a series of Economic Partnership Agreements (EPAs) being negotiated with African countries under the Cotonou Agreement (see BRIDGES Weekly, 19 February 2004, http://www.ictsd.org/weekly/04-02-19/story3.htm). Benin and Chad are also third parties in an ongoing WTO case brought by Brazil challenging subsidies the US grants to its cotton producers (see BRIDGES Weekly, 18 March 2004 http://www.ictsd.org/weekly/04-03-18/story1.htm).
ICTSD reporting; "Cotton Meeting Provides No Commitment On Aid: Further Issues Left for WTO Talks," WTO REPORTER, 30 March 2004.