20th March 2008
Trade Negotiations Insights From Doha to Cotonou
The West and Central African countries produced about 991,000 tonnes of cotton fibre in 2001-2002, that is, 5% of world production. This product, 95% of which is exported, accounts for up to 80% of the export revenue of some countries in the sub-region.
Despite the constraints they face, the African cotton industries have been able to adapt and restructure to build an international competitiveness regarded as among the best. Moreover, this sector provides a livelihood, directly or indirectly, for nearly 10 million people in the sub-region. Its production costs are among the lowest in the world, while the product is of good quality and hand-cultivated from before to after harvest.1 But although African production is competitive, it continues to suffer from the weakness of prices on the global market and has to cope with the competition resulting from subsidized production.
To solve this problem, the appropriate forum is the WTO as the permanent framework for multilateral trade negotiations and depository of a trade dispute settlement body. This framework thus systematizes the two opportunities open to African countries: negotiation or dispute. Although an independent complaint by the African countries had been envisaged at one time, it became pointless after the introduction of the Brazilian complaint on the same issue. The solution of negotiation seems to offer more possibilities: not only that of finding a systemic solution to the subsidy problem, but also that of increasing the number of decision-making centres. Apart from the WTO, the partnership between the European Union (EU) and the African, Caribbean and Pacific states (ACP) looks like an opportunity that would allow the trade partners to group together their interests on the issue and to guarantee their visibility at the multilateral level. A working group of the ACP countries has been set up in Brussels. It is currently working to draw up a draft declaration by the ACP countries to present a common position in favour of cotton. The ACP ministers will meet on July 30-31 as part of the preparations for the Cancun Ministerial Conference. There is no doubt they will examine the advantages to be derived from cooperation with the EU to solve the subsidies problem within the multilateral framework. The same applies to AGOA, whose ambition contrasts starkly with the losses sustained by African cotton owing to the US subsidies.