3rd May 2006

WTO Memeber Express Some Support for Cotton Proposal

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At the WTO Cotton Sub-Committee meeting held on 28 April, several Members expressed support for various aspects of the submission from Benin, Burkina Faso, Chad, and Mali calling for trade-distorting subsidies for cotton to be cut more deeply and quickly than those for other agricultural commodities (see BRIDGES Weekly, 5 April 2006). The so-called ‘cotton four’ have proposed a formula for cuts to cotton subsidies over and above the general reduction, in order to ensure that they would be cut steeply even if the overall reduction were relatively modest. The size of the supplemental cut would decrease as the ambition of the general cut increased.

At this meeting, which was delegations’ second opportunity to react to the proposal, the US hailed Members’ enthusiasm for the deep cuts in the cotton four’s proposal, and expressed the hope that this would be reflected in their level of ambition for the farm trade talks as a whole, cotton included. The US, which heavily subsidies its cotton farmers, had earlier expressed opposition to the proposal, arguing that it risked distracting Members from their pursuit of an overall agreement on agriculture.

Egypt called for technical discussions on the proposal similar to those currently underway in the agriculture negotiations. Chair Ambassador Crawford Falconer (New Zealand) said that these would be necessary, but should not overlap with those being held for the overall talks.

On the development aspect of the cotton talks, the Secretariat reported that cotton projects sponsored by bilateral donors and multilateral institutions were functioning well, and had been buttressed by domestic cotton sector reforms. It also said that it was collaborating with international financial institutions to examine potential future cotton-related development assistance

The next meeting of the Sub-Committtee is tentatively scheduled for 8 June.

ICTSD reporting.