TN/AG/34  
TN/AG/SCC/6  
 
13 September  2016 
(16-4817) Page: 1/4 
Committee on Agriculture  
Special Session  
Sub-Committee on Cotton    
 
FIFTH  DEDIC ATED DISCUSSION OF T HE RELEVANT  
TRADE -RELATED  DEVELOPMENTS FOR COT TON 
1 JULY 2016  
Report1 by the Chairman , H.E. Mr Vangelis Vitalis  
1.  Pursuant to the Bali Ministerial Decisio n on Cotton of 7 December 20132 and the Nairobi 
Ministerial Decision on Cotton of 19 December 20153, the fifth dedicated discussion of the relevant 
trade -related developm ents for cotton took place on 1 July 2016 , in the context of the 
Committee  on Agriculture in Special Session. The dedicated discussion was held back -to-back wi th 
the 25th round of the Director -General's consultative framework mechanism on the development 
aspects of cotton.  
2.  In my introductory  remarks , I provided an update on the state of play in the agriculture 
negotiations , including cotton . I welcomed the fact that various Members had tabled questions  
aimed at  stimulating constructive discussions  on topics of interest to them, and in particular on 
domestic support  and cotton.  
3.  In particular, I  drew Members'  attention to the C-4's questions on cotton4 and to the new 
submission s by the LDC group5 and by Brazil with other co -authors6, both of which  included cotton  
element s. Along with the proponents, I invited Members to further reflect on the questions posed  
and share their views at upcoming  meetings of the Committe e on Agriculture in Special Session . 
4.  I noted that the dedicated  discussions on cotton stemmed  initially from the Bali Ministerial 
Decision  and that in the Nairobi Ministerial Decision Ministers undertook to continue this bi -annual 
dedicated discussion of relevant  trade-related developments across the three pillars of Market 
Access, Domestic Support and Export Com petition in relation to cotton . In Nairobi , Ministers also 
included specific new elements  for monitor ing under the Market Access component of the D ecision.  
5.  Once again , I reminded participants that this process was not a negotiating forum per se  but 
rather provided a unique opportunity to have a constructive exchange around Members' cotton 
trade -related policies from a WTO perspective and usefully inf orm our ongoing negotiations on 
cotton.  
6.  In that regard , I noted that while external information like th at provided in th e presentation s 
by ICAC was extremely useful, nothing could replace information  coming from Members' 
notification s. 
                                                
1 This report is circulated under the Chair's own responsibility.  
2 Document WT/MIN(13)/41 – WT/L/916 , dated 11 December 2013 . 
3 Document WT/MIN(15)/46 – WT/L/981, dated 21 December 2015 . 
4 Document JOB/AG/74 - TN/AG/SCC/GEN/15  dated 28 June 2016.  
5 Document JOB/AG/73  dated 22 June 2016.  
6 Document JOB/AG/72  dated 22 June 2016 . TN/AG/34 • TN/AG/SCC/6  
 
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  7.  I pointed out that a mong the 32 Members identified as potential cotton markets of interest for  
LDCs in the Secretariat's background paper, only five Members could be considered as being 
up-to-date with their notifications  on Domestic Support . I stressed once more that the lack of 
notifications could significantly impact our ability to conduct negotiations. Recalling  paragraph  8 
of the Nairobi Ministerial  Decision on Cotton which state s that "… Members shall ensure that 
necessary transparency is provided through regular notific ations and the subsequent review 
process in the Committee on Agriculture ", I urged Members to updat e their notifications, esp ecially 
in the area of  Domestic Support , which had been identified as the main area of interest in  the 
negotiations.  
8.  Under the agen da item " General Statements from Members ", Mali, on behalf of the 
Cotton -4 (C-4), welcome d the Nairobi Ministerial D ecision on Cotton . The C -4 considered the 
Decision as a n encouraging step forward in the fields of Market Access  and Export Competition , 
as well as development -related aspects , and noted that the follow -up to the implementation of the 
Decision would remain a priority . 
9.  However, the C -4 regretted the lack of results in the Domestic Support  pillar. The C -4 recalled 
the mandate to address cotton " ambitiously, expeditiously and specifically", in line with the 
Hong Kong Ministerial Declaration, and the Bali and Nairobi Decision s, and reaffirmed its 
commitment and readiness to contribute  to the resolution of th is issue. The C -4 urged  all Members  
to actively contribut e towards  the ultimate objective of achieving  an outcome on Domestic Support  
for cotton at the 11th Ministerial  Conference . 
10.  Benin, on behalf of the LDC group , supported the C-4's statement and also  welcomed the 
Market Access  and Export C ompetition component s of the Nairobi Decision on Cotton. Making 
reference to its recent submission7, the LDC group also stressed the importance of achieving an 
outcome on Domestic Support  by the 11th Ministerial Conference , and urged relevant Members to 
provide up-to-date and detailed data on their domestic s upport  for cotton and make  proposals 
regarding the  reduction of their trade -distorting support s. 
11.  The International Cotton Advisory Committee (ICAC)  made  a detailed presentation8 on 
the latest developments in the global cotton market  and trade trends . 
12.  The WTO Secretariat presented its revised  background paper9 which compile s factual 
information and data from Members' notifications and other submissions to the WTO on export 
subsidies, domestic support and mar ket access, including both tariff and non -tariff measures. 
The paper also include s Members' responses to the questionnaires on cotton policy developments 
circulated on 4  February  2015, 17  September  2015 and 22  February  201610, as well as relevant 
informatio n on cotton markets and policies from Trade Policy Review reports . 
13.  The Secretariat noted that in line with the  Nairobi Ministerial Decision on Cotton , the 
background paper also included a new addendum with Market Access -related data for  the 
cotton -relate d products , listed in the Annex to the Decision . 
14.  I took th at opportunity to once again urge Members to u pdate their notifications and  actively 
reply to the cotton questionnaire . Several Members echoed my concern regarding the lack of 
updated data on policy m easures, particularly from some major cotton producing and trading 
Members.  
15.  Members  welcomed both presentation s and thanked  ICAC, in particular , for its  presence and 
participation in the dedicated discussions , highlight ing the importance of  ICAC's  contribu tion for 
substantive  debates.  
                                                
7 Document JOB/AG/73  dated 22 June 2016.  
8 https://www.wto.org/english/news_e/news16_e/cdac_01jul16_e.pdf . 
9 Document s TN/AG/GEN/34/Rev.4 – TN/AG/SCC/GEN/13/Rev.4  and TN/AG/GEN/34/Rev.4/Add.1 – 
TN/AG/SCC/GEN/13/Rev.4/Add.1, dated 17 June 2016 . 
10 The French and Spanish versions of this questionnaire were circulated on 8 March 2016.  TN/AG/34 • TN/AG/SCC /6 
 
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  16.  One Member encouraged ICAC to present  updated information on government support  to 
cotton , as was already done at the  fourth  dedicated discussion . That information provided useful 
context to assess the importance of domestic s upport  in the cotton sector . Another Member noted 
that high cotton prices were one of the underlying factor s behind the declining trend of cotton use 
in the textile industry . Some Members also highlighted the role  played by  the evolution of stocks of 
cotton, in particular in China . 
17.  Some Member s suggested that ICAC's analysis also take into account other aspects  
in addition to the macro picture of the cotton market , such as average farm holding size s and 
average earnings of cotton farmers . However,  another M ember noted that looking at government 
support  at per farmer level could be biased , as the overall impact of support per farmer could  also 
be significant . Finally, one Member asked ICAC whether it had undertaken  studies  to assess the 
environmental impact o f cotton production in Africa.  
18.  The C -4 invited  other organizations,  in a position to do so , to provide any relevant data they 
may have on cotton production, produ ctivity and trade . 
19.  Several Members highlighted the fact that support levels remained high in the cotton sector, 
with particularly  negative impact s on developing countries that provided n o or little support to 
their cotton production. In this regard, t he C-4 noted that very high levels of domestic support 
could  have a similar effect as with export s ubsidies  when most of the cotton production was 
exported . 
20.  At the  request of one Member , and since such data were already available in the annual note 
by the Secretariat on "Members participation in the normal growth of world trade in agricultural 
products" , it was agreed that the Secretariat would  include in the next revision of its background 
paper information on cot ton exports.  
21.  In relation to the  Market Access  section of the Secretariat's document , the C -4 reiterated its 
call for Members to provide disagg regated information on applied and preferential duties as well as 
on tariff -rate quota levels for cotton imports f rom each LDC. The C -4 also noted that the tables in 
the background paper showed that LDC Members did not yet have full duty free and quota fre e 
(DFQF)  access to some major cotton markets, including China, India and the United States. 
The C-4 call ed on developed countries and developing ones in a position to do so , to indicate which 
steps were being  undertaken in order  to provid e DFQF cotton access for LDC countries, 
in accordance with the Nairobi Ministerial Decision on Cotton. The C -4 also raised  questions 
regarding some sanitary and phytosanitary  measures applied on  cotton -related products.  
22.  Japan noted in response to a question that its export financing support was in line with  the 
Nairobi Ministerial Decision. The repayment terms for exports of agricultural products were very 
rarely more than 180 days, and cotton exports were negligible.  
23.  Pakistan noted that its cotton sector had gone through significant  reform s over  the last two 
decades, character ized by the removal of various go vernmental forms of support and low applied 
import duties. Local farmers were therefore facing important difficulties to compete with 
highly -subsidized cotton farm s in other countries , and the cotton area was declining in Pakistan . 
24.  The United States briefed Members  on its recently introduced Cotton Ginning Cost -Share 
programme .11 The United States noted that the payments for this programme would be based on 
the 2015 cotton  plantings and would be  limited in scope by payment caps and eligibility 
requirements for producers.  One Member expressed its concern  about  the estimated 
USD 300 million cost  of this new programm e. 
                                                
11 This is addressed in the  US response t o the Secretariat's questionnaire  contained , together with 
Burkina Faso and Uganda's replies, in document TN/AG/GEN/34 /Rev.4 /Add.2  – 
TN/AG/SCC/GEN/13 /Rev.4 /Add.2  dated 26 July 2016.  TN/AG/34 • TN/AG/SCC/6  
 
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  25.  China  shared  some data regarding its cotton import and  stock policies . China cited some 
statistics which showed that it remained a significant global importer of cotton during 2012 -2015 
and noted that such high volume of imports had resulted in  a decline of domestic production  and 
acreage . China noted that it did  not intend to maintain its  high stock  levels  as the purpose of 
importing cotton was for use in textile processing. China noted two reasons for its increased stock: 
(i) difficulties  faced by local textile sectors due to tariff peaks and escalation; and (ii ) distort ions in 
cotton  prices result ing from high  subsidies by developed  countries . China's intention was to 
continue  to manage the  release of these  stocks in a cautious , orderly  and responsible  manner . 
26.  In concluding the meeting, I noted that this dedicat ed discussion, the first one following  the 
Nairobi Ministerial Conference, had been  very useful, particularly thanks to the ICAC presentation  
which  had sparked  constructive exchanges . I encouraged  Members to continue engaging with each 
other to enhance their understanding of their respective  cotton  policies . 
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