TN/AG/36  
TN/AG/SCC/8  
 
29 September  2017 
(17-5209) Page: 1/5 
Committee on Agriculture  
Special Session  
Sub-Committee on Cotton    
 
 
SEVENTH  DEDIC ATED DISCUSSION OF T HE RELEVANT  
TRADE -RELATED  DEVELOPMENTS FOR COT TON 
24 JULY 2017  
Report1 by the Chairman , H.E. Dr. Stephen Ndũn'gũ Karau  
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 seventh  Dedicated D iscussion of the 
relevant trade -related developm ents for cotton  took place on 24  July 2017. The Dedicated 
Discussion was held back -to-back with the 27th Round of the Director -General's Consultative 
Framework M echanism  on Cotton (DGCFMC), dedicated to the development -assistance  aspects 
of cotton.  
2.  In my introductory  remarks , I recalled the vital importance of cotton in particular for LDCs 
and African countries  and stress ed that t he way th e topic is addressed in the WTO constitutes a 
litmus test of Members'  commitment to address real and legitimate concerns expressed by the 
poorest amongst them .  
3.  In relation to the state of play in the agriculture negotiation, I  noted that  several submissions 
on Domestic Support had been circulated and introduced at the informal meeting of the Committee 
on Agriculture in Special Session of 19 July, including in particular the joint proposal by Brazil, the 
European Union, Colombia, Peru and Uruguay (Job/AG/99) which ma kes specific reference to 
cotton along with Domestic Support and  Public Stockholding  for food security purposes . 
4.  With regards  more specifically  to cotton, I recalled that I had held two meetings in Quad P lus 
format4 on 16 and 30 June 2017. At those meeting s, an overwhelming majority of Members had 
reiterated their support for a meaningful and specific outcome  on Cotton Domestic Support , and 
expressed their support for the Cotton 4 ( C4). Whil e a couple of participants  had recorded their 
lack of optimism, taking into account the overall negotiation prospects , several Members had 
stressed that an outcome on cotton should go "one step further than for Domestic Support in 
general" , in recognition of previous commitments taken by Members . 
5.  I noted that at the Quad Plus meeting of 30 June, Members had provided  initial comments on a 
draft C4 propos al on Cotton Domestic Support. M ost comments related to  (i) the need to focus on 
the most trade -distorting support granted to cotton  farmers , and (ii)  the call by the C4 to 
elaborate new disciplines address ing support granted under the Green Box and the Blue Box.  
Some Members suggested a ceiling on trade -distorting support expressed as a percentage of 
cotton value of production . At the  same time, other Members supported the objective of total 
elimination of cotton  Aggregate Measurement of Support (AMS) and opposed any new disciplines 
on de minimis  for developing country Members without an AMS commitment . Other delegations 
disagreed with the differentiation between developing country  Members with or without an 
AMS commitment.  The importance of special and differential treatment was underlined by some 
delegations , while others insisted on the necessity for all Members providing trade -distorting 
                                                
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 Composed of the C 4, Argentina, Australia, Brazil, China, Colombia, the European Union, India, 
Pakistan and the United States.  TN/AG/36 • TN/AG/SCC/8  
 
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  support to contribute to an outcome on cotton, with one delegation suggesting that A rticle 6.2 
support should als o be included in the discussion.   
6.  I also reported that possible improvement s in the duty free and quota free market access for 
exports of  cotton and cotton -related products from LD Cs, as well as the  development assistance  
aspects of cotton,  had also been mentioned  at the Quad Plus meetings  as possible elements of a 
cotton outcome at MC11.  
7.  I mentioned that the C 4 held the ir 5th Regular Coordination  Meeting in Benin from 18 to 
21 April 2017  and that  the Cotonou Ministerial Declaration dated 21 April 2017 had been  circulated 
as document TN/AG/GEN/44 – TN/AG/SCC/GEN/17 . 
8.  Finally, I emphasize d that the Dedicated Discussions – though not a negotiation process – were 
crucial  opportunities for monitoring and transparency and could hence inform the negotiations. In 
that context, I welcomed the active participation  of the I nternat ional Cotton Advisory 
Committee  (ICAC) as a means to  better understand the situation of the global cotton market, but 
also called on Members to be more forthcoming in sharing information through notifications  and 
their replies to the cotton questionnaire circulated by the  Secretariat ahead of the  Dedicated 
Discussi ons. 
9.  Under the agenda item "General Statements from Members " Benin , on behalf of the C 4, 
recall ed the general mandate to address C otton " ambitiously,  expeditiously  and specificall y" and 
the mandates included  in the Hong  Kong Ministerial  Declaration of December 2005, the  Bali 
Ministerial  Decision  of December  2013 and  the Nairobi Ministerial Decision  of December 2015 .   
10.  The C4 also welcomed the presence of the C4 National  Focal Points , as well as of a Delegation 
of the Cos  Cotton ( a Steering and Monitoring Committee of the EU -Africa Partnership on Cotton  
based in Brussel s), and thanked ICAC and the International Trade Centre (ITC) for their 
participation in  the 7th Dedicated Discussion . 
11.  The C4 stre ssed the urgent need to address  trade-distorting  domestic  support f or cotton and 
underlined the importance of implementing  existing Ministerial Dec isions  on cotton.  The C4 also 
noted that it could not foresee any outcome s at the Ministerial Conference of Buenos Aires in the 
absence of an ou tcome on cotton  and that they could ultimately turn to  available  WTO legal 
procedures . 
12.  Pakistan recalled the vital importance of the cotton sector , stressing that cotton's contribution 
to national GDP was the highest  when compared with  countries of similar  economic  size. The 
representative  of Pakistan noted  that, despite  the reforms introduced over the last two decades, 
the situation o n the international cotton market ha d failed the country's poorest farmers. Pakistan 
referred to ICAC' statistical reports  and underlined  the importance of  subsidies as well as  that of  
border restrictions as factors hindering trade in cotton originating in developing countries . Pakistan  
welcomed the  negotiating proposal by  Brazil, the E uropean Union, Colombia, Peru and Uruguay 
(Job/AG/99 ), and noted  that cotton should be addressed as a stand -alone issue in the context of  
the agriculture negotia tions. 
13.  Cameroon highlighted  the importance of local transformation in cotton value chains  and 
emphasized that any discussion on cotton trade should be framed as a discussion on cotton value 
chains and local value addition . Indeed, discussions on market access for cotton needed to focus 
on factors specifically affecting access to markets for locally-processed  and value -added  products . 
14.  The International Cotton Advisory Committee (ICAC)  made  a detailed presentation5 on 
the lat est developments in the global C otton market  and trade trends . ICAC also discussed  recent 
developments relating to governme nt measures in favour of C otton , as well as  the extensive 
paperwork necessary for any single shipment of cotton and how electronic certifications  such as 
ePhyto6 could  facilitate such transactions .  
                                                
5 https://www.wto.org/english/news_e/news17_e/2_cdac_24jul17_e.pdf . 
6 For more info on ePhyto see:  https://www.ippc.int/en/ephyto/ .  TN/AG/36 • TN/AG/SCC/8  
 
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  15.  The WTO Secretariat presented its revised  background paper  and addend um7, which 
compile s factual information and data from Members' notifications and o ther submissions to the 
WTO on E xport Subsidies, Domestic Support and Market Access, including both tariff and non -tariff 
measures. The  paper also include s Members' latest responses to the Secretariat questionnaires on 
Cotton policy developments , as well as relevant information on C otton markets and policies from 
Trade Policy Review reports . 
16.  The Secretariat noted in particular that new notifications on Dome stic Support had been 
received from  Brazil, the E uropean Union, the United States as well as India and Turkey. The 
notifications from the  latter two Members had been circulated after the cut -off date and therefore 
were not captured in the background paper.   
17.  I noted that the quality of the information contained in the Secretariat document  was fully 
dependent on the quality and timeliness of Members' notifications and submissions to the WTO, 
including replies to the questionnair e. I stressed the importance for all key C otton actors to be 
more forthcoming in sharing information on recent policy developments.  
18.  Members welcomed both presentations and thanked  ICAC for its presence and important 
contribution to the substantive debates duri ng the dedicated discussions  and raised  specific follow 
up queries to  ICAC.   
19.  Turkey asked what share of cotton production capacity could be expressly attributed to the 
existence of subsidies. ICAC replied that a reduction in subsidies would obviously resul t in less 
cotton production, but the actual effect of cotton subsidies depended t o a large extent on the level 
of support granted to other crops.  ICAC noted that if cotton subsidies are eliminated while 
subsidies for other crops remain in place, world cott on production would probably decline by 
several million tons, or approximately 10 %. However, if subsidies for all agricultural commodities 
are eliminated as part of a comprehensive agreement, world cotton production would decline by a 
much smaller amount.  
20.  Benin asked for more disaggregated data on the composition of domestic support, possibly 
following the WTO categories of AMS, Blue and Green Boxes. ICAC noted  that its full reports are 
provided to the WTO Secretariat and are available on line. However, ICA C noted that it does not 
presume to identify  Domestic Support according to WTO categories. Instead, government 
measures in ICAC reports are grouped into  the following categories: direct support to production, 
border protection, crop insurance subsidies, mi nimum support price mechanisms, input subsidies, 
and transportation subsidies.  
21.  New Zealand enquired as to the relevance of the trends presented by ICAC related to 
domestic support after discounting crisis -recovery measures, since measures linked to price l evel 
were usually considered to be trade -distorting. ICAC noted that the discounted trend illustrated in 
its presentation gave some interesting indication on the evolution of the sector in "normal 
situations", i.e. in the absence of the effects of the reco very measures implemented as of 
2008-2009 in response to the global economic and financial crisis.  
22.  ICAC noted that the underlying trend in government measures in cotton was down since 
2000, suggesting that the work of the WTO in raising awareness of the ne gative consequences of 
subsidies was having an impact on the policies and program s of governments.  
23.  In reply to a question from Burkina Faso on the relationship between cotton and polyester, 
ICAC explained that polyester production was also being driven by industrial policies in countries 
producing polyester. ICAC highlighted that this phenomenon was of growing importance and 
its implications were still being studied by ICAC.  
24.  Chad enquired a bout the impacts of large cotton stocks  on the cotton markets . ICAC replied 
that large stocks were the result s of past dis tortions following  the recession and the 2010 -2011 
cotton price surge s and that they were still  negative ly impact ing cotton prices.  
                                                
7 Documents TN/AG/GEN/34/ Rev.6 – TN/AG/SCC/GEN/13/Rev.6 and TN/AG/GEN/34/Rev.6/Add.1 – 
TN/AG/SCC/GEN/13/Rev.6 /Add.1 , dated 13  July 2017 . TN/AG/36 • TN/AG/SCC/8  
 
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  25.   Benin  thank ed the Secretariat  for the  follow up and monitoring value of the  revised  
background paper  and called on  Members to update and share information on Domestic Support, 
as well as  for the expeditious translation of relevant  recent documents.  The C4 also supported the  
smooth transfer  of the development assistance aspects of cotton from the Development Division to 
the Agriculture and Commodities Division.  
26.   In reaction to information contained in the  Secretariat background paper , Colombia 
highlighted the duty -free treatment granted to its main cotton -supplying trading partners, 
complemented by an additional  15,000 tonne import quota for 2017 at  a zero tariff rate for 
uncarded and uncombed cotton  for trading partners not already benefitting from duty free 
treatment.  With regard to Domestic Support, Colombia announced the planned elimination of its 
national minimum price guarantee system, and recalled the absence of national export subsidy 
programmes.  Colombia  concluded by underscoring the need for a tangible and ambi tious result on 
cotton at the Buenos Aires Ministerial meeting.    
27.  The E uropean Union welcomed the Dedicate d Discussion s on Cotton as a unique opportunity 
to talk about the details of how cotton policies and markets work. The European Union was  one of 
the co-sponsors of the proposal Job/AG/99, which contains specific language on cotton, and  looked 
forward  to engag ing with Members on th e proposal . The representative of the European Union  
thanked ICAC for its very instructive  presentation on cotton markets and  policies , as well as the 
Secretariat for the revised background paper. In relation to the revised background paper, the 
European Union saluted the reforms announced by Colombia and encourag ed Members to reply to 
the Secretariat's questionnaire to improve  transparency and information sharin g. 
28.  The WTO S ecretariat and the I nternational Trade Centre (ITC)  made a presentation on  their 
respective cotton information tools , as integrated in a demo  market analysis t ool, the Cotton 
Portal project . This presentation was made  in response to (i) a suggestion by the C4  at the Quad 
Plus meeting of 16 June , and (ii) the C4 call for a reflection on ways to improve the quality and 
accessibility of  cotton market access  information . 
29.  The WTO Secretariat introduced the databases  available at the WTO in relation to tariffs and 
non-tariff measures, as well as other resources available containing market access related 
information.  ITC introduced the ITC Market Analysis tools  and then presented  the demo for  the 
Cotton Portal project . The P ortal would provide a single entry point containing all the cotton 
specific information available in the various WTO and ITC databases on market access, trade 
statistics, country -specific business contacts, etc., as well as  a link to the  WTO C otton webpage 
and relevant  documents . 
30.  Benin, on behalf of t he C4, and Pakistan strongly support ed the Cotton Portal project. Chad 
highlighte d the importance of having the P ortal available in the three official languages of the 
WTO. The representative  of Benin als o recalled  that, in many LDCs, access to the internet was not 
yet available on a large scale, or extremely difficult to obtain. In th at regard , Benin stressed the 
importance of WTO Reference Centres to bridge the IT infrastructure gap in LDCs . 
31.  I concluded the discussion that follow ed the joint WTO/ITC  presentation by registering the 
support of the Membership for the development of the Cotton Portal  by both  Secretariat s. 
32.  Under the agenda item "Exchange of Views and Submissions from Members ", Brazil 
concurred with the C4 on the urgency of addressing  cotton market distortions and  stressed that 
the Job/AG/99 proposal was informed by that priority . Brazil stressed that it also s aw domestic 
support as the core issue to be addressed, and that document Jo b/AG/90 by the LDC group 
provided a useful  reference for a proposed  product -specific Value of Production limit for cotton. 
Brazil  called on the C4 and all interested  Members to work together towards  a concrete, 
meaningful and development -oriented outcome i n Buenos Aires.  
33.  Benin, on behalf of the C4, thanked Brazil and the other proponents  for their proposal  on 
addressing market distortions. Benin informed Members that the C4 was pursuing its  work on a 
negotiating proposal for cotton, and was analysing various issues including AMS, de minimis , Blue 
Box, transparency on Green Box  as well as Special and Differential Treatment . Benin stressed that 
an outcome on cotton in Buenos  Aires was a must, and expressed interest in working with other 
Member s towards that goal. TN/AG/36 • TN/AG/SCC/8  
 
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  34.  The United States praised the Dedicated Discussion s for being a useful and highly informative  
forum and thanked in particular ICAC and the WTO Secretariat for the updated information 
discussed durin g the meeting . The U nited States also thanked the C4 and other Members for their 
constructive engagement  in the context of the Dedicated Discussion s. The United States noted t hat 
the DGCFMC held in the morning was also a very useful and instructive  mechanism . Finally, the 
United States sugges ted further exploring  the competitiveness dynamics  from manmade fibres , in 
particular in relation to  the industrial policies which could  drive the increase in production of 
manmade fibres .  
35.  India joined other Members in thanking ICAC, ITC and the WTO Secre tariat for the 
information presented  during the meeting.  The representative of India noted that cotton  in India 
was grown in rural area s by small and marginalized far mers. In relation to market access, India 
noted that it provides LDCs with  duty free quota  free or preferential market access for 98.2 % of its 
tariff lines, with all applied tariffs on cotton tariff lines at zero. India shared information on  a 
programme of technical assistance  it was implementing  to the benefit of  the C4 and other African 
count ries, focused on improving the productivity of both the agriculture and the textile parts of the 
cotton value chain.   
36.  In concluding the meeting, I underlined the value of the information presented by ICAC , ITC,  
and the  WTO Secretariat, which had sparked co nstructive exchanges. I noted the important  role of 
transparency in informing  the discussi ons and  I encouraged Members to submit  up-to-date 
notifications  as well as  respon ses to the  Secretariat's  questionnaire.  
 
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