Trade issues

Benin supported by Mali, Chad, Zimbabwe and Côte dº´voire, complained strongly about what they said was lack of progress and other countries? failure to respond to the African Group’s “Proposed Elements of Modalities in Connection with the Sectoral Initiative in Favour of Cotton?of 22 April 2005 (TN/AG/SCC/GEN/2, available here, summary here.

“We have not made any progress. There has been no advance,?Benin complained. At the same time, prices are falling and the situation among farmers is deteriorating, it said. Benin said it disagrees with the view that progress in cotton has to wait for progress in the agriculture negotiations as a whole.

The African speakers warned that the 33 African countries that produce cotton will not allow the issue to be sidelined at the Hong Kong Ministerial Conference in December. They said they were looking for concrete progress beyond what was agreed in the 1 August 2004 General Council decision and for this to be reflected in the document to be produced at the end of July.

“We’re not asking for the impossible,?Mali said, stressing that the Africans are not trying to move the cotton issue so fast that it is “out of synch?with the agriculture negotiations. Mali said that it would not be enough to have an end-of-July document that contained only the chairperson’s assessment of the current situation.

Chairperson Tim Groser had said previously that at the end of July he would circulate a “first approximation of full modalities?in the agriculture talks, the “full modalities?in turn due to be approved at the Hong Kong Ministerial Conference in December 2005. More recently, including at the start of the cotton meeting on 18 July, he has said the chances that he will be able to produce a “first approximation? as such, are now slim, unless members?positions narrow in the coming days.

The EU denied that it had failed to respond to the African proposal. Its ambassador said that he had made a formal statement in the 29 April 2005 meeting, which is now on paper and part of the minutes (shortly to be released publicly as document TN/AG/SCC/R/3 and available here. The “front loading?proposed could include binding cotton tariffs at zero, eliminating export subsidies and substantially reducing distorting domestic supports ?all of this right from the first day that the results of the current negotiations are implemented, the EU ambassador said. The EU also said countries can act autonomously even before finalizing any commitments in the agriculture negotiations.

Meanwhile, the US outlined the actions it is taking to comply with the ruling in dispute DS267 (“United States ?Subsidies on Upland Cotton?. These include administrative changes to three agricultural export credit guarantee programmes (GSM-102 and 103, and the Supplier Credit Guarantee Programme ?SCGP), and proposed legislation to alter or repeal these programmes and the “Step 2?cotton programme. Brazil described these are positive moves but added that it is watching developments and hopes that Congress will deliver the legislation. (See also news story of Dispute Settlement Body’s 15 July 2005 meeting)

Chairperson Groser described all these comments as important. Among the points he highlighted were: Mali’s assertion that the Africans are not demanding the impossible even though they are speaking toughly; the US reform of its subsidies, which he said is a “significant step? Brazil’s positive response to those reforms; the EU’s comments, including its point about acting autonomously even while commitments are being finalized; and Zimbabwe’s and Tanzania’s emphasis on the fact that 33 African countries share an interest in the issue. But he also stressed that progress is needed in the agriculture negotiations, and that leaving everything for ministers to decide in Hong Kong in December would lead to failure: “you know what will happen,?he told delegates.

  
Development issues

The meeting also heard a Secretariat report on a consultation earlier the same day, on the development side of the issue, i.e. development assistance provided by donor countries and international organizations. Chairperson Groser concluded that it is clear that the cotton initiative is starting to see action, even though it is slow.

  
Next meetings

Tentatively: 30 September, 28 October and 14 November 2005

  
Chairperson

Tim Groser, former ambassador of New Zealand, who also chairs the agriculture negotiations.

  
Some of the groups

See also agriculture negotiations backgrounder

PROPONENTS: Benin, Burkina Faso, Chad, Mali

AFRICAN GROUP (41 countries): Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo, Congo (Democratic Republic), Côte dº´voire, Djibouti, Egypt, Gabon, The Gambia, Ghana, Guinea, Guinea Bissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, Swaziland, Tanzania, Togo, Tunisia, Uganda, Zambia, Zimbabwe