In a meeting that covered both trade and development issues related to cotton, Chairperson Tim Groser also outlined his assessment of the agriculture negotiations. He said members should study carefully his forthcoming paper on the negotiations, to be circulated before his end-of-July “first approximation of full modalities?(the “full modalities? in turn due to be approved at the Hong Kong Ministerial Conference in December 2005).

  
Trade issues

African countries said they were disappointed that no other members have produced written responses or alternative proposals to their paper, circulated just before the last meeting in April (available here, summary here).

Some other countries said they preferred not to respond immediately in writing, either to allow them to be flexible in the positions they adopt, or because they believe an informal setting would be more conducive to technical exchanges on the paper.

Chairperson Tim Groser agreed, and said he might hold a consultation soon. This would be best done at a time when participants can assess the implications for cotton arising from developments in various areas of the agriculture negotiations as a whole, he indicated.

The call for written responses came from Benin, Burkina Faso and several other African delegations, supported by Brazil and Argentina. These delegations said this would help them to report to their governments that there have been new developments.

The US replied that the outcome in cotton will be determined by the agriculture negotiations, where it said reductions in specific areas such as domestic support will affect US programmes for cotton. But in order to achieve a significant result overall in cotton, members should be more ambitious in the agriculture negotiations as a whole, the US said. A higher level of ambition in agriculture could mean a result on cotton that is closer to the Africans?aims, the US said.

  
Development issues

The International Monetary Fund, an observer, outlined the result of a conference on cotton in Cotonou, Benin, 18 May 2005. Conference participants agreed on a “four-pronged response?to the surge in cotton production and decline in prices, the IMF said: (1) to preserve macroeconomic stability by tackling poverty directly instead of supporting prices in order to avoid adjustment; (2) using development programmes to increase production efficiency and competitiveness; (3) eliminating distorting export and domestic subsidies in developed countries; and (4) protecting the poor during adjustment.

In a statement that is to be circulated in writing, the US said that in addition to trade reform and the need to increase African producers? productivity, efforts should be made to boost flagging demand for cotton products (which is partly alleviated by increased demand in China), and that an ambitious result overall in agriculture would yield better results than focusing more narrowly on cotton. The US said economic analysis suggests that even when distorting subsidies are removed, the outcome might not be major increases in prices in the long term because an initial price rise would result in further expansion in supply which is already outstripping demand.

Benin, Côte dº´voire and Burkina Faso said members should focus on getting rid of the distortions and allowing poor farmers “do their job?

  
Next meeting

18 July 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