WORLD TRADE  
ORGANIZATION   
TN/AG/SCC/W/16 
WT/CFMC/36 
1 October 2012 
 
 (12-5274) 
Sub-Committee on Cotton  
   
IMPLEMENTATION OF THE DEVELOPMENT ASSISTANCE ASPECTS OF THE 
COTTON-RELATED DECISIONS IN THE 2004 JULY PACKAGE AND  
PARAGRAPH 12 OF THE HONG KONG MINISTERIAL  
DECLARATION 
 
Item 2C - Coherence Between Trade and Development Aspects:  
Update on the Development Aspects of Cotton 
 
Secretariat Progress Report 
 
 
  
 
 
 
  
 
I. INTRODUCTION 
1. Pursuant to paragraph 12 of the Hong Kong Ministerial Declaration,
1 this is the Twelfth 
Secretariat Progress Report to the Sub-Committee on Cotton (SCC) on the Development Assistance 
Aspects of Cotton.  Since the last Progress Report, th ere have been several developments.  First, on 
6 October 2011, the Director-General circulated the 12th version (WT/CFMC/6/Rev.11) of the 
Evolving Table on Cotton Development Assistance  (ET) under cover of his letter addressed to 
Ambassadors and Permanent Repr esentatives.  Second, the 16th Round of the Director-General's 
Consultative Framework Mechanism on Cotton (DGCFMC) took place on 3 November 2011.  
Finally, WTO Members have maintained an active interest on all aspects of the cotton dossier, as 
mandated in the 1 August 2004 Gene ral Council Decision and in the 2005 Hong Kong Ministerial 
Declaration. 
II. 16TH ROUND OF THE DIRECTOR-GENERAL'S CONSULTATIVE FRAMEWORK 
MECHANISM ON COTTON 
2. The Chairman (DDG H.V. Singh) welcomed all participants to the 16th Round of the 
Director-General's Consultative Framework M echanism on Cotton (DGCFMC), about six weeks 
before the Eight WTO Ministerial Conference.  He  welcomed representatives of the C4 countries and, 
in particular, H.E. Ambassador Prosper Vokouma, Permanent Representative of Burkina Faso and C4 
Coordinator, Mr. Clemens Boonekamp, Director of the Agriculture and Commodities Division and 
Mr. Terry Townsend, Executive Director of the International Cotton Advisory Committee (ICAC). 
                                                      
1 "We invite the Director-General to  furnish a third Periodic Report to our next Session, with updates at 
appropriate intervals in the meantime, to the General Council, while keeping the Sub-Committee on Cotton fully 
informed of progress."  (WT/MIN(05)/DEC:  paragraph 12).   This document has been prepa red under the Secretariat's own 
responsibility and without prejudice to the positions of Members 
and to their rights and obligations under the WTO TN/AG/SCC/W/16 
WT/CFMC/36 Page 2 
 
 
  3. The Chairman paid tribute to H.E. Ambassador David Walker, the outgoing Chairman of the 
Committee on Agriculture Special Session (CoASS) and of its Sub-committee on Cotton for his remarkable work at a very difficult moment, and for his notable technical contributions to the 
agricultural negotiations, including on cotton. He welcomed his successor, 
H.E. Ambassador John Adank, Permanent Represen tative of New Zealand, whose appointment as 
new Chair of the CoASS had been announced, but he was yet to be officially elected by WTO 
Members. 
4. Members and participants took note of the provi sional agenda.  The Chairman indicated that 
no issues had been signalled under Any Other Business. 
A. STATEMENT  BY THE  C4 COORDINATOR 
5. The representative of Burkina Faso, on behalf of the C4 countries, welcomed 
Ambassador Adank as new Chair of the CoASS.  He pointed out that cotton was one of the three key 
points of interest to LDCs, together with duty-fr ee and quota-free market access and exemptions of 
services.  He recognized that, although all actors had wo rked hard to achieve an early harvest on those 
three issues by the 8th Ministerial Conference in December, the results of those consultations were 
disappointing and the probability of obtaining a mini-package was very slim.  C4 countries appealed to all WTO Members to show a sense of responsib ility and commitment, in order to find a fair 
resolution to the cotton issue. 
6. The 15
th Round Consultations had de monstrated a need to address the quality of the aid 
granted to the cotton sector.  He said that after five years the outcome of aid implementation provided 
by development partners was somewhat ambivalent  and the development aspects of cotton could be 
seen as resulting from efforts to improve the co mpetitiveness of the African cotton sector.  He 
believed, nonetheless, that those efforts merited an in-depth evaluation in order to maximize the 
effectiveness and efficiency of assistance.  It wa s with that objective that the C4 ministers had 
decided, at a meeting held in November 2010 in Cotonou, that it would be necessary to re-think the 
development aspects of the cotton dossier, and in partic ular to redefine the kind  and type of assistance 
requested from development partners.  That new op tic should lead henceforth to avoid financing a 
multitude of separate projects in the cotton sector of each individual country and be replaced by a group dynamic, focused more on innovative, multifacete d and integrated collective projects at the C4 
level, and in more genera l terms, across all 36 African cotton-producing countries.  
7. He thanked, on behalf of all 36 African cotton- producing countries, the development partner 
community for their unwavering support to the Afri can cotton sector, whose survival remained under 
threat despite the rebounds in industrial cotton c onsumption and international market prices.  He 
congratulated Director-General Pascal Lamy and a ll the staff of the Secretariat for their willingness 
and commitment to work to find a fair resolution of  the cotton issue.  He requested his statement be 
circulated as an official WTO document. 
8. The representative of Chad supported the statemen t made by Burkina Faso and indicated that 
the main objective of his country was to enha nce cotton production, address weaknesses in the 
production system and generate an increase in revenue for producers to reverse the trend of 
impoverishment. The reform strategy for the cotton sect or aimed, in particular, at restructuring the 
cotton company of Chad to ensure its economic a nd financial viability.  For that purpose, it was 
necessary to resolve the problem of equity capital loss, improve its organization and management, and 
ensure sufficient working capital fo r the future, which could give the company a new image.  Thus, a 
new cotton company under the name "Nouvelle Cot onTchad" was being established.  A document 
with more details on the cotton sector reforms in Chad  was available to participants outside the room.  
The representative of Chad asked th at his statement be circulated as an official WTO document.  TN/AG/SCC/W/16 
 WT/CFMC/36 
 Page 3 
 
 
  B. TRADE  POLICY  ASPECTS  OF COTTON 
9. The Chairman requested Ambassador John Ada nk to make his statement, following which 
Mr. Clemens Boonekamp, Director of the Agri culture and Commodities Division, would brief 
participants on the status of the Trade Policy Aspects of Cotton within the framework of the 
agriculture negotiations.   
10. H.E. Ambassador John Adank said that, even if his formal election had not taken place, he 
wanted to be present at the 16th Round Consultations to familiarize himself with the perspectives that 
delegations brought on the issues contained in the cotton dossier.  He expressed his thanks to the 
previous chair, Ambassador David Walker, for the co nsiderable efforts that he had made in seeking to 
move the agriculture negotiations forward and to  identify convergence on bracketed or annotated 
issues in the draft texts and most notably, for the discussions on cotton.  He was aware of the 
fundamental importance of cotton in the negotiatio ns, and would consult w ith delegations on how 
they saw things moving forward.   
11. Mr. Clemens Boonekamp said that as the WTO Director-General had indicated clearly at the 
last TNC, the DDA's conclusion by the end of the ye ar could not be expected.  The outgoing chair had 
conducted consultations on all outstanding issues and he believe d some understanding had been 
reached on what was at stake.  Considerable work had also been done on templates and on data issues, 
and even if a revision of the modalities text could not be issued, some headway had been made on 
how to move the discussions forward.   
12. He highlighted that a particularly important aspect of the work throughout the outgoing chair's 
tenure was cotton.  He had devoted ample time to that, conducting consultations  and, although in each 
of those consultations little progress had been made , it was important to note that each Member had 
adhered to the Hong Kong Ministerial Decision that cotton should be treated ambitiously, 
expeditiously and specifically, within the agricultural negotiations.  He reaffirmed that a final solution 
in the agriculture negotiations could not be r eached without a resolution of the cotton issue. 
13. The representative of Brazil, on behalf of the G-20, restated its long-held position of 
upholding the views of the C4 in relation to cotton in both its trade and development dimensions.  
Cotton remained at the center of the Doha agri culture negotiations.  Brazil reaffirmed the G-20's 
solidarity with the C4 and its unwavering commitmen t to working with them for an agreement, in 
accordance with the mandate  agreed by Members at the Hong Kong Ministerial.  In view of the 
forthcoming 8th Ministerial Conference, it considered important to continue to pursue progress on the 
cotton dossier.   
14. The representative of Brazil, speaking in his national capacity, underscored that cotton, both 
in its trade and developmental aspects, could be one theme to epitomize Brazil's unwavering 
commitment to the DDA.  For that reason, Brazil and the G-20 had been at the forefront of the 
discussions on cotton in its trade dimension and had consistently supported the positions of the C4 in 
the Doha Round.  He highlighted that the current s hort-term situation of lowe r subsidy levels provided 
little solace when compared with the long period wher e distortions had prevailed in the late nineties 
and for the most part of the first decade of the XXI century.  For those unsupported farmers, 
particularly in Africa, the continuously high subs idies had implied adjustment via quantities, meaning 
a reduction of cotton production, which was their cash crop, resulting in compromised livelihoods.  
Consequently, when cotton prices had recuperated,  there was little production for the C4 countries to 
avail themselves of the boom years. 
15. He affirmed that the potentially big dist orting programmes which were still in place 
constituted a clear threat to African producers.  Brazil was following with great attention the TN/AG/SCC/W/16 
WT/CFMC/36 Page 4 
 
 
  discussions in Washington directed at drafting a ne w Farm Bill, so as to asses s the likely impact and 
potential to generate serious prejudice.  Likewise, his country took note of the recent Commission's proposals for the CAP.  He mentioned that although it was a little too early to form a considered judgement, so far he had failed to see any movement in the direction of further reform of the cotton 
programmes.   
16. As he had indicated at the 15
th Round Consultations, following the ruling of the arbitrators in 
the dispute with the United States on cotton, Brazil co ntinued its bilateral process with the US with a 
view to implementing real reform of trade-dist orting programmes.  Brazil was engaging with the 
Administration and Congress in the US to find a solu tion in keeping with the Appellate Body ruling 
for their long-standing dispute.  It was essential for Brazil that whatever programmes were to be 
created in the context of the new Farm Bill, th ey should not isolate cotton growers from market 
conditions, thus impeding produc tion growth at variance with price conditions prevailing in 
international markets.  He said that Brazil would cer tainly keep the C4 fully informed every step of 
the way.  His country appreciated that the Consultative Framework Mechanism assigned due 
importance to South-South Cooperation in favour of cotton producers in Africa.  Brazil's experience 
in South-South Cooperation gave it reasons to believe in its effectiveness and on the positive impacts 
on the developmental dimension. 
17. As the last version of the Evolving Table on Cotton showed, Brazil had taken significant new 
steps in implementing its ambitious programme of  cooperation, technical assistance, technology 
transfer and capacity building with Benin, Burkin a Faso, Chad and Mali.  He announced that its 
cooperation would be enhanced in the near future, as beside the government, the private sector in 
Brazil would also contribute to the cooperation projects in Africa.  He mentioned that in October 2011, the Ministry of External Relations and the Brazilian Cotton Institute (IBA) had signed 
a Protocol of Intention regarding technical cooperati on in the cotton sector.  The Protocol reflected the 
common goal of the parties to engage in the elab oration of projects and in the implementation of 
cooperation actions to strengthen the cotton sector in  developing countries, especially in Sub-Saharan 
Africa.  The IBA, an institution created to recei ve temporary compensation paid annually by the 
United States due to the losses incurred by Br azilian cotton producers, had pledged to earmark 
10 per cent of its income to finance international cooperation projects in the cotton sector, through the 
Brazilian Cooperation Agency (ABC), and which may be  executed in partnership with international 
organizations or institutions.  The actions to be carri ed out would be in line with the provisions of the 
20 April 2010 Memorandum of Understanding under the cotton dispute.   The partnership between 
IBA and MRE/ABC would make possible for other cotton producers to benefit from the scheme.  
Brazil was confident that such kind of cooperati on would provide a major contribution to redressing 
structural challenges in those countries.  It would not represent a comprehensive solution to the plight 
of African cotton growers, but he hoped that it woul d provide a meaningful contribution to alleviate 
their situation.   
18. The representative of India said that the Director-General's Consultative Framework 
Mechanism served a useful forum for exchange of  views and information on development assistance 
for cotton.  India fully supported the statements ma de by Ambassador Vokouma on behalf of the C4 
countries and by Brazil on behalf of the G-20.  India also supported the draft decision on cotton 
proposed by the C4 for the 8th Ministerial Conference and shared their disappointment at the lack of 
progress on the cotton issue since 2005.  Cotton was critically important for the economies of several 
African countries, especially the LDCs, and Memb ers had to recognize the adverse impact of 
domestic support measures and export subsidies granted to cotton on the rural cotton-producing 
communities in those countries.  It was imperative to  resolve the problems faced  by those countries by 
eliminating all forms of domestic support measure s and export subsidies for cotton and granting 
DFQF access for exports of cotton from LDCs , as per the Hong Kong Ministerial mandate.  TN/AG/SCC/W/16 
 WT/CFMC/36 
 Page 5 
 
 
  19. Cotton was a key element of the DDA and any early harvest package had to include a 
resolution of that issue.  It was important to work  actively to address the issue of cotton ambitiously, 
expeditiously and specifically, as mandated by the July Framework Decision.  Cotton production 
represented an important share of GDP and exports  of many developing countries and LDCs, and was 
an important source of income for many disadvantaged  families in those countries.  The effect of 
subsides on international prices a nd its consequences for cotton gr owers were well-known and such 
subsidies should be dealt with meaningfully and front ally, if all actors were sincere in addressing that 
disturbing situation. 
20. An explicit decision on cotton was needed in accordance with the Hong Kong Ministerial 
Declaration, which called for the elimination of a ll forms of export subsidies for cotton by developed 
countries; DFQF access to cotton exports by devel oped countries; and an ambitious reduction in 
trade-distorting domestic subsidies for cotton produc tion. He was pleased to state that, even though 
not all developed countries had provided DFQF ac cess to cotton from LDCs, since August 2008 India 
had introduced its unilateral DFQF Preference Scheme under which all LDCs, including non-WTO 
Members, received 50 per cent margin of preference on  applied tariffs for exports of cotton to India.  
India's effective applied tariffs on cotton, not carded or combed, had been at zero since 2008.  
21. He stressed that India remained unwaveri ng in its commitment to promote South-South 
Cooperation in general, and specifically to the co tton-producing and exporting countries in Africa.  
India had offered to share the expertise develope d by Indian research and development centres with 
African countries and had organized training programmes for cotton growers in India in the past.  He 
underlined that India's Duty-Free Tariff Preference Scheme covered 94 per cent of its total tariff lines, 
which included cotton. 
22. The representative of Colombia reiterated his c ountry's concern at the lack of progress made 
in the negotiations on cotton.  She underscored that the distortions in the cotton sector continued to be 
a major problem for employment in countries that produce and manufacture cotton, including 
Colombia.  She emphasized that, as it was agreed at the Hong Kong Ministerial Conference, it was 
necessary to have an ambitious and rapid treatment  of the problem, particularly in the area of 
domestic subsidies.  She reaffirmed her support fo r the proposal from the African Group and the C4.  
Colombia endorsed that cotton should be part of the undertakings that were going to be discussed at 
the Ministerial Conference in December, in line wi th the mandate at the Ministerial Conference in 
Hong Kong.   
23. The representative of Pakistan supported the st atements made by the C4 and by Brazil, on 
behalf of the G20.  Her country wanted to see  the 2005 Hong Kong mandate on cotton honored and 
implemented ambitiously, specifically and expediti ously.  She mentioned that Pakistan's cotton 
regime was open and liberalized, and the applied tari ffs on cotton in her country  were zero.  However, 
the competitiveness of farmers in rural areas was be ing affected by the domestic subsidies provided 
by certain countries. She stressed that the issue of cotton subsidies was as valid as it was at the time 
when the Doha Round was launched.    
24. The Chairman concluded by saying that cotton remained a priority i ssue for Members.  The 
questions and issues arising in the agriculture negot iations, and particularly on cotton, would remain 
important features of the work in the rules-based  Multilateral Trading System.  He emphasized the 
need for those issues to be kept under review in  the Director-General's Consultative Framework 
Mechanism on Cotton. TN/AG/SCC/W/16 
WT/CFMC/36 Page 6 
 
 
  C. DOMESTIC
 COTTON  SECTOR  AND  OTHER  REFORMS  / NATIONAL  FOCAL  POINTS    
25. The Chairman recalled that the Third Version of the "Table on Domestic Cotton Sector 
Reforms" (WT/CFMC/21/Rev.2) had been circul ated on 5 November 2010 and discussed at the 
14th Round Consultations.  As communicated by the Di rector-General in his letter to Members dated 
6 October 2011, the Fourth Version of the Table was still work in progress.  He stated that 
Burkina Faso had submitted inputs, circulated in document WT/CFMC/33 on 12 October 2011. 
A document containing an update on Chad's reforms wa s available to participants outside the room.  
However, inputs of a precise and formatted nature, ac cording to agreed parame ters, were still awaited 
to enable the completion of the Fourth Version of the Table.  He expressed the hope that those inputs 
could be submitted in the very near future, espec ially in view of the forthcoming Ministerial 
Conference in December. 
26. The Chairman referred to the factual inform ation provided by the International Cotton 
Advisory Committee (ICAC) on the "Evolution of Domestic Cotton Sector Reforms in the C4 
Countries", at the request of the C4, to support th e work of WTO Members under the item.  For the 
16th Round, an update of ICAC's paper, contai ned in document WT/CFMC/30/Rev.1, had been 
circulated on 28 October 2011.  On behalf of all pa rticipants, he thanked Mr. Terry Townsend and his 
team at ICAC for producing that revision.   
27. The representative of Cameroon underlined that th e reform process of the cotton sector in his 
country was almost at an end and th at all related information, once it had been validated in the capital, 
would be submitted to the Secretariat. 
28. The representative of Burkina Faso, speaking in  his national capacity, made reference to the 
latest stage of the reform process to be carried out in Burkina Faso in relatio n to the viability of an 
insurance against climate risks on cotton and cotto n production.  Such analysis, which was being 
conducted together with the Wo rld Bank and described in document WT/CFMC/33, aimed at 
assessing whether or not it was practical to be put in  place.  He asked if other countries had taken a 
similar step, in order to benefit from best practices.   He suggested, furthermore, that such insurance 
might be established through a mutual fund, which woul d help better manage climate risks that had an 
adverse impact on the cotton sector.  He asked if any partners were ready to support that initiative. 
29. The representative of Chad stated that he w ould welcome the sharing of best practices and 
experiences in connection with privatization and the re form process in the cotton sector, so as to avoid 
falling into the same traps that others might have experienced. 
30.  The representative of Pakistan praised the information provided by ICAC in document 
WT/CFMC/30/Rev.1 on developments in the private sector, liberalization and supply chain 
management, and suggested including a sec tion on transfer of technology.   
31. The representative of the United States appreciat ed the update from ICAC, in particular with 
regard to domestic cotton sectors.  Addressing this  was key to achieving a more sustainable and 
competitive framework for the cotton growers in West  Africa.  As regards the request from Burkina 
Faso in respect of further information on crop insu rance, the US had some experience that it could 
share.  However, he mentioned that it was a questi on on how relevant it was to the specific situation in 
certain countries.  He said that the key objectiv e under the US WACIP Programme was to improve 
yields and incomes of cotton producers.  WACIP's primary activities were centred on some 40 grants 
intensively planned and monitored with US partners.  He underlined  that WACIP had kept detailed 
records on 127 monitoring and evaluation categories, with some key indicators such as farmer 
training, which had benefitted over 9,000 trainees.  The sample survey showed a 17 per cent increase 
in cotton yields over the baseline with an estimated  43 per cent increase in the gross margin.        TN/AG/SCC/W/16 
 WT/CFMC/36 
 Page 7 
 
 
  32. The Chairman expressed particular appreciation to the delegation of Burkina Faso, Chad and 
the ICAC for their inputs and statements under the it em.  He encouraged the ICAC to keep its paper 
under review, taking into account the new requests to  complement its information.  He also thanked 
Members and participants for their comments and suggestions.  He urged LDCs which had not yet 
done so, to consider submitting their inputs to th e Secretariat as early as possible for the Fourth 
Version of the Table.  He proposed that the 16th Round of Consultations take note of the reports, 
updates provided and statements made.   
33. The DGCFMC took note of all the reports , updates provided and statements made. 
34. The Chairman invited Members underscored that so far the Secretariat had only received and 
registered returns from seven proponent countries re garding focal points, the same number as in 
October 2009.  He urged cotton proponent countries to  submit, as quickly as possible, their designated 
National Cotton Sector Focal Points. 
D. COTTON  PRODUCTION  AND  TRADE  TRENDS 
35. The Chairman invited the 16th Round of the DGCFMC to proceed to item 5 on the agenda, 
namely:  "Cotton Production and Trade Trends".   
36. He invited Mr. Terry Townsend, Executive Di rector of the ICAC to make a factual 
presentation on the state of affairs of the international cotton market. 
37. The representative of the ICAC indicated th at during 2007, 2008, 2009 and 2010, cotton 
prices had fluctuated between US$0.50 and US$0.90  per pound, which was cons istent with long-run 
trends.  Prices had fallen to about US$0.50 dur ing the recession, they had strengthened during 
2009/2010, and then had skyrocketed during the 2010 /2011 season.  There were a number of reasons 
for that, including very tight stocks and interrupti ons in trade from some countries.  He underscored 
that as the world came out of the recession, the inventories were drawn down and the cotton value 
chain was not ready to respond when consumer demand began strengthening, so prices had to 
skyrocket to ration the supplies that were availabl e.  Prices had peaked at over US$2 per pound in 
March 2011, and they had been genera lly trending lower since.  He explained that because of the very 
high prices reached last season, there had b een an increase in planted area in 2011.   
38. He emphasized that farmers had responded aroun d the world by shifting planted area in 
favour of cotton.  He underlined that, normally, the cotton world area was between 29 million hectares 
and 36 million hectares.  Although in the mid-1990s the levels of planting were at the lower end at 
around 29 million hectares, it was during a period when prices were low.  In the early 2000s, again it 
had corresponded with years in which prices were ve ry low.  During the recent recession, the cotton 
area worldwide had fallen to 29 million hectares.   With subsequent high prices, within two seasons, 
the planted area had reached 36 million hectares which was resulting in a production increase 
compared to last season.  In the current season world cotton production was expected to reach around 
27 million tons, close to the world record that was established in 2004/2005.  Consumption, however, 
was not growing as rapidly as it had in the past.   
39. Cotton mill use, which had plummeted during the recession, had risen strongly and 
unexpectedly during 2009/2010.  During 2010/2011 it had fallen to 3 per cent, and that was not 
because of weak demand but because of very high pr ices.  Those high prices had prevented mill use 
from being as high as it might have been.  For the current season, there was very little growth in 
consumption, if any at all.  As the world r esponded to the high prices, there was an excess of 
production over consumption in 2011.  That meant that stocks would rise, there would be greater TN/AG/SCC/W/16 
WT/CFMC/36 Page 8 
 
 
  supply as there had been in the past, and that was the explanation why prices had started to diminish 
and would be significantly lower than last season. 
40. He highlighted that another characteristic of last season was that it had been particularly 
disruptive, with a huge volatility.   In a normal cotton season, it was common for the highest quote of 
the year to be 20 per cent above the average and for the lowest quote to be 20 per cent below the 
average.  So there was a 40 per cent spread in prices around any given year.  He made reference to 
some years when that spread had risen to 50, 60 or  70 per cent, but last year had been extraordinary 
and the spread had reached nearly 100 per cent.  That was very di sruptive, caused a great deal of 
difficulty in the cotton market and was still manifesti ng itself into default contracts.  He said that 
because of both the level of the process and the volatili ty of prices, many textile mills had not fulfilled 
their contractual obligations as prices began to fall after March 2011.  In turn, many producers did the 
same when prices started rising early in the season and that created a lot of disruption, which had 
translated into increased costs a nd reduced efficiency in the cotton market.  One of the long-term 
implications of volatility was that spinners had been  encouraged to look at other fibres which had not 
experienced that same kind of problem. 
41. For the current season, volatility had returned to its  normal level, with an average cotton price 
of US$1.15.  The highest price of the season had on ly been about 10 per cent above the average and 
the lowest price about 8 per cent below the average.  Of course, it remained 9 months for the season to 
end, so more change could be possible, but it certainly appeared as though the more normal trade 
relationships involving prices were reasserting themselves. 
42. He underlined that imports of cotton were est imated at 8 million tonnes.  China was the 
largest importer in the world with a figure of 3 m illion tonnes, and the rest of the world accounting for 
about 5 million tonnes.  He recalled that in the mid-2000s, world trade was nearly 10 million tonnes. 
World exports for the season were estimated at 8 million tonnes, with the United States being the 
largest exporter, although its e xports had declined from 3.3 milli on tonnes to 2.5 million tonnes, 
because it had experienced a severe drought in Tex as and supplies had been reduced.  Those supplies 
from the US were being off-set by increased exports from Australia and Brazil.  India, Uzbekistan and 
Francophone Africa were exporting about the same am ounts or perhaps a little more than they had the 
previous year.   
43. He affirmed that loss of mark et share to polyester was one of the long-run structural 
challenges facing the cotton industry. During the 1980s, cotton was about 50 per cent of world fibre 
mill use.  In the 1990s, its share had begun to drop a nd by 2005 it had declined to 40 per cent.  He 
mentioned that in recent years, because of the high prices and the volatility, cotton share had dropped 
to about 33 per cent.  Cotton consumption had been  growing in absolute terms, but declining in 
relative terms. 
44. He underscored that direct assistance to cott on had declined during 2010/2011 because of the 
strong rise in prices.  In years of low prices, dir ect assistance to cotton had amounted approximately to 
US$6 billion and due to the extraordinarily high pri ces recorded the previous year, direct assistance 
had bottomed at US$1 billion.  The Secretariat of  the ICAC had not yet made calculations for 
2011/2012, but preliminary estimates showed that as the Cotlook A Index was falling, the formulae 
that had resulted in direct assistance to cotton were re-asserting themselves.     
45. Another distortion in the cotton market wa s bans on exports.  During the 2000s, some 
countries that had been major net importers, had su cceeded in raising yields and had become major 
net exporters.  In the 2010/2011 season, a year of extraordinary price rise and volatility, some 
countries had not allowed exports that had already been  contracted to proceed, and that had resulted in 
substantial disruption to trade relationships and en couraged or facilitated defaults on contracts.   TN/AG/SCC/W/16 
 WT/CFMC/36 
 Page 9 
 
 
  During the 2011/2012 season, the ICAC Secretariat was not aware of the same problem happening 
again.  Nevertheless, memories of those disruptions to trade were continuing to influence behaviour in 
the cotton market.   
46. The cotton industry had a number of countries w ith state-owned enterprises that intervened 
directly in cotton markets, some buying and selling cotton. During the 2008/2009 season, when prices 
were low during the recession, state-owned enterprises were net buyers.  In the current season, the ICAC was expecting state-owned enterprises to be  adding to state reserves and by doing that, 
augmenting demand for cotton.  He said that the difficulty with state-owned enterprises was not 
necessarily the volume of activity, but the nature of  uncertainty they induced in the cotton market. 
47. Referring to Africa, he indicated that in  the 2004/2005 season, production had reached a 
record of 2 million tonnes, which accounted for about  7 per cent of world production.  Production in 
Africa had dropped to 1 million tonnes during the recessi on, when prices were low and Africa's share 
of world production had fallen to 4 per cent.  Produ ction had climbed slightly the previous year and 
was expected to rise further in the 2011/2012 seas on, accounting for about 5 per cent of world cotton 
production.  All regions in Africa were expanding pr oduction but the strongest growth was registered 
in francophone Africa.  Likewise, production was climbi ng in Eastern, Southern and Northern Africa.  
He believed that reflected both a recovery in weat her in some countries and also a higher degree of 
organization and supply of inputs to  farmers in other regions.   
48. This increase in production was linked to expa nded area and not improved yields.  He said 
that the cotton area in Africa had been increasing and was expected to reach 2 million hectares in 
2011. Yields in francophone Africa had been for a long time at around 400 kilograms per hectare, and 
for 2011 the estimates showed a small decline at 375 kilograms per hectare, despite experiencing 
better weather in a number of countries.  Cotton yi elds in Africa were declining and falling further 
behind the world level, which had amounted to a pproximately 600 kilograms per hectare in the 1990s.  
Following the adoption of bio-technology and other im provements, the world yields had increased to 
about 800 kilograms per hectare during the 2000s, and th ey had remained at that level.  In Africa as a 
whole, yields were around 350 kilograms per hectar e.  As a consequence, the competitiveness of 
Africa relative to the rest of the world was falling behind, and in his view, raising yields was the 
greatest structural challenge that African producers faced.    
49. He underscored that a period of economic oppor tunity would open in the future for all 
producers, including in Africa.  All evidence suggest ed that the average level of prices was going to 
be higher than it was in the 2000s, and probably ev en higher than in prev ious decades.  Reasons 
included the shift in land towards bio fuels, and b ecause the world had entered a period of technology 
consolidation as technology up-gra dation had taken place.  These w ould provide an opportunity for 
producers to experience higher prices on average.  
50. He said that a lot of work had been put by  ICAC into estimating the potential for African 
cotton production.  On a country by country basis, the ICAC Secretariat believed that Africa could 
produce 3 million tonnes of cotton on 6 million hectares,  with an average yield of 500 kilograms of 
lint per hectare.  As a rule of thumb, it took US$1 of investment, research and extension to generate a 
US$6 increase in the value of production.  So, 3 million tonnes of production would translate, at 
current prices, in around US$3 billion.   That would mean that over the current decade, to achieve that 
goal of 3 million tonnes of production, African cott on industries would need an investment of about 
US$500 million, in addition to the baseline of invest ment, research, and extension that was already 
going on.  He believed that the figure of US$500 m illion over a ten-year peri od and divided up among 
all countries on a country by country basis, was a highly achievable objective.  He concluded by 
saying that was an indication of the kind of investment in research and extension that would be needed in order for Africa to achieve its potential for cotton production.   TN/AG/SCC/W/16 
WT/CFMC/36 Page 10 
 
 
  51. The representative of China stated that cotton prices in the domestic market in China had 
experienced a great volatility in recent years.  Th e increase in cotton imports  by China was because 
international cotton prices had been lower than dom estic cotton prices and that had resulted in a big 
decrease in cotton production and planting area in Ch ina for several years.  For instance, China had 
imported 2.74 million tonnes of cotton in 2007 and 3.13 million tonnes in 2010, representing a 
14 per cent increase.  He said that, affected by lower international cotton prices, China's cotton 
planting area and cotton production had declined markedly.  In 2007, China's cotton planting area had amounted to 5.93 million hectares and production had reached 7.53 million tonnes.  But in 2010, the planting area had declined to 4.85 million hectares  and production had only been 5.96 million tonnes, 
a decrease of 18 per cent and 22 per cent, respectively.   
52. He noticed that for two consecutive years, in  2010 and 2011, the ICAC had issued a report 
entitled "Production and Trade Policies Affecti ng the Cotton Industry", describing government 
support to the cotton industry in several countries, including China. He underscored that China was not a Member of the ICAC but he wished to ma ke some comments on the contents in the report 
referring to China's subsidies to cotton.  He indi cated that the report of 2011 presented a misleading 
calculation regarding cotton subsidies from China. For instance, the report counted import tariffs 
(border trade measures) as a government subsidy to  cotton production, which by no means was in 
accordance with the WTO rules and definitions.  He underscored that only by that mis-calculation, the 
ICAC had deliberately increased China's cotton subsid ies by US$1.7 billion, which was not true.  He 
understood that the ICAC may have its own defi nition and that it may not accept WTO rules in 
defining and calculating domestic support to cotton,  but China did.  On the other hand, when 
calculating cotton subsidies by the US, the ICAC excluded the "direct payments" from the support programs, which were the real subsidies to cotto n production. By that miscalculation, the ICAC had 
reduced US cotton subsidies by US$588 million.  He said that with an increase on the one hand and a 
decrease on the other, China was ma de the biggest supplier of subsidies to cotton production, which 
was not true according to WTO rules.  He therefor e believed that the methodology used to calculate 
cotton subsidies was not in accordance with WTO rules. 
53. He emphasized that China had strictly follo wed the WTO Agreement on Agriculture and the 
commitment made in acceding the WTO as regards support to cotton production.  China had duly notified the WTO its agriculture domestic support for the years 2005-2008.  According to that 
notification, China's cotton subsidies in th e Amber Box amounted to US$160 million in 2005, 
US$130 million in 2006, US$600 million in 2 007 and US$400 million in 2008, accounting, 
respectively, for only 1.25 per cent, 0.87 per cent, 3.29 per cent and 2.51 per cent of the value of cotton production in those four years, far less than the de minimus commitment which was 8.5 per 
cent of the VOP in the case of China.  He said th at China's support to cotton included a subsidy for 
improved cotton seeds, a subsidy for reserve costs and a subsidy for the cost of transporting cotton out 
of the Xinjiang Autonomous Region.  The ICAC's  report highly over-estimated China's support to 
cotton production, which neither was the real situati on, nor was in accordance with the definitions of 
subsidies by the WTO.   
54. The Chairman thanked the representative of Ch ina for his clarification on the coverage and 
definition of subsidies in accordan ce with WTO rules.  He emphasized  that the report presented by the 
ICAC at the 16th Round concerned only the trade trends and was useful to participants in order to have 
a global overview of the international markets.  A ll other reports which were out of the WTO context 
were not relevant to the discussions on the deve lopment aspects of cotton within the Director-
General's Consultative Framework Mechanism. 
55. The representative of Chad asked Mr. Terry To wnsend more precisions with regard to the 
drop in yields in African francophone countries.  He  explained that Chad had seen a drastic reduction  TN/AG/SCC/W/16 
 WT/CFMC/36 
 Page 11 
 
 
  in production, not just because of the yields but du e to the lack of motivation of farmers at certain 
times.   
56. The representative of the ICAC replied that yields in francophone Africa were declining 
because fertilizer use was diminishing.  The civil war in Côte d'Ivoire had disrupted the delivery of 
fertilizers, not only to Burkina Faso and Mali, but also  to other regions.  He said that another source of 
difficulty was the repayment of debts.  Farmers had become indebted during the period of low prices and consequently were no longer able to afford fertilizers.  Therefore, part of the reform of the cotton 
sector that was being proposed would be forgivable de bts, so that farmers could again be in a position 
to buy fertilizers again.   
57. The representative of Burkina F aso agreed with Mr. Townsend' s assessment that the drop in 
yields was undoubtedly due to debts, the issue of fer tilizers and the crisis situation in the sub-region.  
To offset the production decline, the C4 in general,  and Burkina Faso in particular, had explored two 
avenues.  He said that the first one, which was being carried out in the framework of Brazil/C4 
cooperation, was aimed at improving yields.  Th e second experiment, which was being conducted 
since two years, concerned genetically modified cotton, to increase yields and reduce production costs 
by diminishing the number of pesticide treatments and the quantity of fertilizers needed.  He mentioned that there were, however, other disadva ntages and difficulties involved in that kind of 
production. 
58. The representative of the European Union asked the ICAC representative several questions.  
On volatility issues, which she had understood as bei ng one of the motives why the textile industry 
was moving away from cotton, she believed that ap art from the reasons mentioned, variations in 
weather conditions, extra restrictions and the work of  state-owned enterprises had also played a role in 
the excessive volatility registered in the last few y ears.  She asked whether it was possible to pinpoint 
more firmly, in rough terms, how much those factor s, such as the intervention of the state-owned 
enterprises had contributed to the volatility registered last year.  Finally, with respect to the suggestion 
by ICAC that an investment of US$500 million over ten years would be sufficient to prop up Africa's 
share of the market, she requested how the ICAC was approaching that issue, as it was eminently 
doable. 
59. The representative of the ICAC responded that th e ICAC had not been able to disaggregate 
the elements of volatility to identify the percentage im putable to different factors. He believed that the 
biggest factor for the rise in prices was the unexpect edly strong recovery from the recession.  During 
2009 and early 2010, many economists  had been talking about a double dip recession.  Retailers and 
manufacturers had been reluctant to expand their i nventories by July of 2010, when it had become 
apparent that the retail level demand was indeed  strengthening.  The value chain from cotton to 
clothing was very lean and retailers  could not expand their inventories as fast as they wanted to, and 
that resulted in tremendous upward pressure on prices.   The situation in the cotton market had been 
exacerbated in September 2010, when a major expor ting country banned exports to cover contracts 
that had already been signed.  That situation had been further aggravated by the activities of some 
state-owned enterprises that had intervened in ma rkets to try to protect their domestic textile 
industries, but the ICAC had not been able to disaggregate the total among those categories.  
Regarding the best way to cope with that situation, he said that there was a great body of literature on 
hedging and how to manage price risk in commod ities, but he emphasized that there were no easy 
answers to those questions.  With respect to the investment of US$500 million, he said that the ICAC 
believed that was a ballpark figure that could be used for planning purposes as countries and regions 
tried to identify what resources would be necessar y in order to achieve the production potential of 
Africa in the cotton sector during the current decade, taking advantage of the high level of average prices.   TN/AG/SCC/W/16 
WT/CFMC/36 Page 12 
 
 
  60. The representative of the United States referred to ICAC's comments in connection with the 
competition between cotton and polyester in the fra mework of a major disr uption in markets and 
wondered how long it would take to draw back the attractiveness of cotton re lative to the oil-based 
polyesters.  He highlighted that it was obviously rela ted to the future price of oil, but it was also 
important to keep an orientation on natural fibr e as a competitive product.  He appreciated the 
comments made by the delegate from China and the Ch air and believed it was important to look at the 
issues in the broadest perspective, taking into account the WTO rules and exactly how Members tried 
to categorize subsidies into boxes.  At the same time, he thought interesting to bring in ICAC's 
perspective which mirrored very similarly the one from the OECD on the actual market impacts.    
61. The representative of Pakistan asked the ICAC representative whether the amount of 
US$500 million included some investments in the fer tilizer sector as well.  She stressed that unless 
support for the industry, like fertilizers, was established, it would be difficult to increase 
competitiveness in the cotton-producing countries in Africa. 
62. The representative of ICAC replied that the figur e was a calculation of the cost of investment 
in research and extension only and did not include fertilizers nor improved logistics, roads and ports 
and other things which would be required to full y meet the production potential of Africa.    
63. The Chairman thanked the Executive Director of ICAC for his presentation.  He thanked 
Members and participants who had intervened with  comments and questions and suggested that the 
DGCFMC take note of the presentation and all the statements made. 
64. It was so agreed.   
E. DIRECTOR-GENERAL'S  EVOLVING  TABLE  ON COTTON  DEVELOPMENT  
ASSISTANCE 
65. The Chairman recalled that on 6 October 2011, the Director-General had circulated to 
Members the 12th version of the Evolving Table, in docum ent WT/CFMC/6/Rev.11.  He invited the 
representative of the Secretariat to underline the key points. 
66. The representative of the Secretariat2 made reference to the 12 versions of the Evolving Table 
and to its three formats for reporting on contributions.  He recalled that the first format had been 
established in 2004, the second one in early 2006,  where the first quantitative parameters for 
tabulating the contributions were  developed, while the third modification had taken place in 
June 2007, after the High-Level Meeting.  The change  in 2007 had been essentially to create the part 
that contained the contributions from the IMF and the World Bank, which were not cotton-specific, 
but were made available to the recipient countries in case they decided to allocate them to the cotton 
sector. 
67. Following suggestions by participants made at the previous meeting, he announced that a 
fourth change in the format had taken place, wh ereby two Annexes had been added to the Evolving 
Table.  That change was meant to take all the co mpleted activities out of the main body of the Table 
and put them in the Annexes, in order to focus attention on the active and ongoing operational 
activities.   
68. He underlined that the latest revision had been made on the basis of contributions from 
Australia, Brazil, Canada, the EU and several of its individual member States, Japan, and the US.  
Inputs had also been received from the Common Fund  for Commodities (CFC).  The representative of 
                                                      
2 Mr. Chiedu Osakwe, Director, Accessions Division.  TN/AG/SCC/W/16 
 WT/CFMC/36 
 Page 13 
 
 
  the Secretariat summarized the most salient points of th e revision and said that in Part 1, related to the 
active cotton-specific contributions, the number of  beneficiaries had stood at 25.  The value of 
commitments had totalled US$332 million, while disbursements had reached US$94 million.  In 
Annex 1, concerning the completed activities in Part I,  the number of beneficiaries had totalled 33, the 
value of commitments had reached US$255 million and the disbursements flows had amounted to 
US$244 million.   
69. As regards Part II, corresponding to the activ e and ongoing activities for cotton within the 
framework of agriculture and infrastructure-rela ted assistance, the number of beneficiaries had 
totalled 26, the commitments had reached US$4.72 bi llion and the disbursements US$619 million.  In 
Annex 2, containing the completed activities in Part II, the number of beneficiaries had stood at 16, 
the commitments value had totalled US$207 million and the disbursement flows had equalled the 
value of commitments.  He finally made referen ce to the values of assistance for ongoing activities in 
Part I and Part II combined, with a total figure of US$5 billion committed and US$713 million disbursed, while the combined total for comple ted activities in Annexes 1 and 2 had reached 
US$462 million committed in relation to US$551 million disbursed. 
70. He believed that Members and pa rticipants had been largely successful in restructuring the 
format of the Evolving Table.  The data showed that participants in the DGCFMC had been delivering 
on cotton development assistance in a steady and incr emental way over a seven-year period.  One of 
the highlights of the work in the Consultative Framework was that there had been collective 
cross-checking and verification of the contents on the Table.  There was always scope for 
improvement and one of the next steps Members an d participants would be addressing in the future 
was to work on a qualitative dimension that would accompany the quantitative aspects of the 
Evolving Table.   
71. The representative of Australia underlined that  the Australian Government was pleased to 
inform that it had approved funding to provide technical assistance to the C4 and other cotton-
producing countries in Central and West Africa.  The project would provide training in best 
management practices in cotton production system s, including seed-handling techniques.  The 
activities would be undertaken by Australia's scient ific and industrial research organization, which 
was working very closely with the West and Cent ral African Council for Ag riculture Research and 
Development and also the Economic Community of W est African States.  He mentioned that work on 
the project had already begun and he hoped to be in  a position to report details  for the next update of 
the Evolving Table.  He informed that African t echnical experts would be visiting cotton farms and 
the Australia Research Institute, and undertaking training courses in best management practices in the Australia cotton production system.     
72. The representative of the European Union responded to a question from Burkina Faso 
reflected in document WT/CFMC/W/52, on how best to identify beneficiaries of support.  She 
stressed that the EU tried to distribute the value of assistance by countries, but when support 
concerned regional projects it was sometimes quite di fficult to determine exactly the part given to a 
specific country, in particular when there was a seminar.      
73. The representative of the United States appreciated the work of the Secretariat in restructuring 
the Evolving Table, following suggestions made at  the previous meeting.  He underscored that, 
according to his calculations, the average value of cotton production in the C4 countries for the period 
2008-2011 was estimated at approxima tely US$630 million.  He said that the newly tabulated Table 
showed that in Annex 1, concerning the co mpleted activities on cotton-specific development 
assistance in Part I, US$6.7 million were allocated in favour of the C4.   That represented an 
approximate 1 per cent of the value of production.  However, in Part I, under the active and ongoing 
cotton-specific assistance, the C4 countries would be benefitting from US$92 million, so the TN/AG/SCC/W/16 
WT/CFMC/36 Page 14 
 
 
  two figures combined turned out to be 15 per cent of the value of production.  The US was very 
pleased to have invested in a major effort in the C4 development assistance, focusing particularly on 
extension.     
74. The Chairman made reference to a point raised by some Members at the previous meeting 
relating to the qualitative dimensions accompanying the quantitative monitoring and review of the 
Evolving Table.  He indicated that concrete and significant progress had been made in the Consultative Framework, including improvements in the Evolving Table, where the monitoring and 
evaluation was primarily quantitative.  After seven years, the numbers had stabilized and reached a 
critical mass.  He stressed that several Members a nd participants felt that further impetus and energy 
could be injected by developing also a "qualitativ e dimension" to the review.  He had initiated 
contacts with Members on this aspect.  Initial ideas might include the possibility of detailed 
presentations, such as the Brazilian presentations of its projects in the C4, as well as qualitative analysis and reporting of particular projects and activities from the "Focal Points" of cotton 
beneficiaries.  He encouraged Members to provid e any ideas to enrich the discussions on that aspect. 
75. The representative of Chad sugg ested that the focal points should have an active role in the 
Consultative Framework and asked partners if th ey could finance their participation at the 
consultations, which should improve the accuracy of the figures in the Evolving Table.   
76. The representative of the US responded to the intervention by Chad saying that he believed 
that the focal points were focused on coordinating th e projects within their co untry and so their value 
would be much higher by staying in the field, making sure that the representatives in Geneva were 
informed, in order to be able to report on the issu es, concerns and problems that they were facing on 
the ground.   
77. The representative of the EU, responding to an  invitation by DDG Singh to make detailed 
presentations on projects in the Evolving Table to highlight the qualitative aspects and bring some life 
into the figures in the Table, said her presentation intended to give more visibility on the actions 
undertaken by the EU in the context of the EU/Africa  Partnership on Cotton.    She explained that the 
EU/Africa Partnership on Cotton had been approved in 2004 at the Paris Forum and consisted of two 
dimensions:  the trade side, which supported fair tr ade; and the development aspect, aimed at ensuring 
a sustainable improvement of the competitiveness and viability of the cotton sector in Africa.   She 
said that the action framework reflected those two co mponents in six different strategic sectors.  She 
indicated that the action framework was a referen ce paper for domestic and regional cotton strategies 
and a tool for follow-up and coordination purposes.  The aim of the partnership was to improve the 
institutional environment, support the competitiveness of the cotton sector, par ticularly market access 
and also productivity and quality issues.  Other obj ectives were to reduce the vulnerability of holdings 
and improve the local value added to bring more ea rnings to producers, under a coordinated approach 
at the international, re gional and national levels. 
78. She underlined that the coordi nation of the implementation follow-up was conducted through 
the Committee for Guidance and Follow-up.  The partne rship covered five differe nt types of partners, 
including  the ACP itself and all the individual Stat es.  Other stockholders that were part of the 
partnership were representatives of the private sector  on behalf of cotton prod ucers, ginners and the 
textile industry.  The financial participation came from the EU Member States and multilateral 
regional agencies, as well as other States that were not Members of the European Union.  Since 2004, 
there had been close to 160 cotton-specific inte rventions in Africa, representing €460 million, making 
the EU one of the main donors of African cotton assistance.   
79. She said that a specific example of projects under way was the ACP Programme for 
Agricultural Commodities, which had started in 2007 w ith a budget of €45 million, with one part of it  TN/AG/SCC/W/16 
 WT/CFMC/36 
 Page 15 
 
 
  dedicated to cotton, representing about €16 million.  It was implemented by five different 
international organizations, the CFC, the FAO, the ITC, UNCTAD and the World Bank.  Africa had 
three regional strategies for cotton, which were draw n up with the participation of all stakeholders of 
the cotton sector, public and private.   It had taken time to put all the pieces together as the process 
was participatory and started from the diagnosis to  the actual validation of the strategies.  Three 
strategies had been completed, one for the West African Economic and Monetary Union, another one 
for the Economic Community of Central African St ates and the third one directed to southern and 
eastern African markets.   
80. On the basis of those regional cotton strategies,  she stressed that the EU was also seeking 
better synergies in the Continent, aimed at estab lishing a Pan-African roadmap for the cotton sector 
over the next ten years.  She pointed out that  the Coordinating and Follow-up Committee COS-Cotton 
for that partnership had organized a meeting with the cotton-funding agencies in Mali at the end of 
October, to ensure a better communication of the results and to mobilize the funding agencies in the 
coordinating efforts.   
81. She added that the part of the project con cerning ACP for Commodities, which was also to 
ensure better competitiveness, was implemented by th e FAO, ITC, CFC and the World Bank.  Efforts 
focused on improving the quality, enhancing productivity with the promotion of good agricultural practices and facilitating access to markets throug h meetings with selle rs and buyers.   
82. The representative of the EU mentioned that a pos itive impact had been registered as a result 
of that programme, since yields in the countries covered by those activities had increased by up to 
55 per cent through integrated production and pest-man agement assistance, as compared to customary 
practices.  The production costs and margins had also  significantly improved.  Considerable attention 
was put to avoid problems of contamination of th e cotton seeds, which was originally the reason for 
substantial drops in the sales price of African cotton, due particularly to the presence of foreign bodies 
and residues in the bags used for harvesting.  Therefore, the introduction of new locally-produced 
cotton bags for harvesting would improve the quality a nd avoid contamination of the harvested cotton.  
Since objective and reliable instrumental measures fo r the quality of the cotton fibre were lacking, 
two technical centres were created for that purpo se in Mali for Central and Western Africa and in 
Tanzania for Eastern and Southern Africa, as part of a joint programme implemented together with 
the CFC.  The European Union member States were also providing a great deal of support to the EU/African Partnership on Cotton.  France was the first contributor, followed by Germany and the 
Netherlands.   
83. She pointed out that there was a study under way to establish risk-coverage mechanism at a 
regional level.  The smoothing mechanism was aime d at attenuating some of  the erogenous shocks 
resulting particularly from world cotton price fluctu ations.  A project was being implemented through 
the German Cooperation Agency, the "Cotton Made in  Africa Initiative", to promote the sustainable 
production of cotton and develop demand for cotton made  in Africa, with the goal of creating a "Made 
in Africa" label.  That initiative covered the whole supply chain from cotton crops to textile 
production on the basis of social, economic and eco logical criteria, was connected to a larger 
programme known as the Promotion of the Cotton Va lue Chain, which was supported by the Bill and 
Melinda Gates Foundation.   
84. The Chairman concluded the discussions and em phasized that the "deliverables" under cotton 
development assistance had been banked through a consistently monitored process since the 6th WTO 
Ministerial Conference in 2005 and the High-Level M eeting on Cotton in 2007.  He considered that 
the topic on the "Qualitative Dimensions Accompa nying the Quantitative Monitoring and Review of 
the Evolving Table" had served to re-energize ite m 6, raised the content level and made it more 
purposeful.  There were, however,  challenges to be  addressed collectively, namely, the necessity to TN/AG/SCC/W/16 
WT/CFMC/36 Page 16 
 
 
  sustain implementation so as to bridge the commitment/disbursement gap;   and the identification by 
the cotton proponents of their focal points on whos e reports about cotton projects, programmes and 
activities the DGCFMC would continue to depend for any meaningful monitoring and review of 
implementation.  A viable and activ e partnerships between providers and recipients of assistance was 
necessary.  He underscored that the Director-Gener al would continue to place full spotlight on the 
cotton dossier.  He expressed appreciation to the entire development community for its continuing 
contributions.   
85. The 16
th Round of the DGCFMC took  note of all the presentations and statements made. 
F. SOUTH-SOUTH  COTTON  COOPERATION 
86. The Chairman recalled the background to the ite m and the mandate reflected in paragraph 12 
of the Hong Kong Ministerial Declaration.  He highl ighted the important contributions being made by 
Brazil, China, India and Pakistan.    
87. The representative of Brazil underlined that his country's cooperation with the C4 countries 
was providing the expected results and that resources  were being disbursed accordingly.  He stressed 
that as the funds that Brazil was providing for coope ration with African countries would be increased, 
that would contribute to the development of the cotton sector in Africa.     
88. The representative of India stated that cotton, both in its trade and deve lopment aspects, was a 
vital component of the DDA.  It had also evolved into a lasting feature of South-South Cooperation. 
He underscored that India remained committed to pr omote South-South Cooper ation in general, and 
specifically to the cotton-producing and exporting countries in Africa.  He reported that last year, 
India, in close collaboration with the C4 countries,  Uganda and Nigeria, had deputed a delegation to 
those countries, during which extensive discussions were  held with relevant stakeholders to formulate 
an effective cooperation and assistance programme in the area of cotton production, research and 
development, capacity building and value addition.   The technical assistance programme broadly 
covered the areas of enhancing cotton productivity;   improving extension and support services;  
research and development for qua lity control;  improving farm pr actices;  capacity building to 
training, marketing and distribution;  infrastruct ure development;  strengthening downstream industry 
in textiles and clothing, and development of cotton residue-based industry for greater value addition.  
The programme was expected to lead to improved productivity and up-gradation of skills and, at the 
same time, enhancing post-harvest practices and hi gher value realization and strengthening the value 
chain and capacity building of cotton growers.  He announced that at the second India /Africa Forum 
Summit in May 2011, an amount of US$210 million had been committed to the implementation of 
that programme over a period of three years.   
89. The representative of China underscored that his country was drawing up a new cooperation 
plan with the C4 countries, providing more suppor t for cotton production and marketing, such as 
cotton seeds, chemical fertilizers, cotton ginning eq uipment, technical training, as well as support for 
the textile industry.  He mentioned that China woul d also keep importing cotton from the C4 countries 
and other African cotton-producing countries and would increase its imports in 2011.   
90. The representative of Pakistan said that her c ountry was awaiting a response from the C4 and 
other African cotton-producing co untries to the offer of technical assistance made at previous 
meetings.  She emphasized that Pakistan was pursu ing South-South Cooperation in the cotton sector 
through the OIC Forum, specifically through its Cent re of Excellence on Cotton.  She reiterated that 
its offer for technical assistance was available to the C4 countries and asked support from the EU, the 
US or any other donors interested, to put the project into place.  TN/AG/SCC/W/16 
 WT/CFMC/36 
 Page 17 
 
 
  91. The representative of Burkina Faso expressed appreciation to all the partners who had 
intervened.  He said that Afri can countries needed their help and it was important to enhance 
coordination so as to benefit from that developmen t assistance as best as possible, while awaiting the 
end of the trade negotiations.   
92. The representative of Chad thanked Brazil for its  cooperation which had helped to give new 
energy to the cotton sector in his country.  He lik ewise expressed appreciation to the Government of 
India whose intervention had allowed to re-invigorate Chad's spinning industry.  He made an appeal 
to his European partners to help re-establish th e African cotton companies that had gone bankrupt. 
93. The representative of the ITC gave an update of its activities since last meeting.  He 
mentioned that in October 2011, the ITC, together  with Turkey, had trai ned farmers and general 
representatives from Central and Western African  cotton-producing countries, following the 
experience of China on cotton research, in particular the farm input system and activities in the ginning sector.  He underlined that, almost in paralle l, the ITC had organized an activity for West and 
Central African countries with the China Cotton Association and the China National Textile and 
Apparel Council, to examine the entire cotton value chain, focusing on promoting African cotton in 
China and the Chinese market.  He underscored that  the ITC was supporting those two organizations 
to promote African cotton also in other countries. 
94. The Chairman concluded by thanking all the speakers who had intervened.  He said that 
South-South Cotton Cooperation constituted a critical element of development.  It had emerged as a 
substantive component of the deve lopment aspects of the rules-base d Multilateral Trading System in 
the WTO.  He encouraged developing countries to deepen and extend that cooperation and continue 
with the initiatives that they had expressed. 
G. ANY  OTHER  BUSINESS 
95. There were no issues raised under the Item "Any Other Business". 
H. CONCLUDING  REMARKS 
96. The Chairman made several conc luding remarks.  He expressed his strong appreciation for 
the presence of Ambassador Adank, who stayed the entire duration of the meeting, to get a better 
insight in the process of the Consultative Framewor k Mechanism.  He believed the discussions at the 
16th Round had been very useful, particularly six weeks away from MC8, showing that the work of 
Members and other invited participants continued to register notable progress.  He said that there were 
real "deliverables" to show in the developm ent aspects of cotton, which stood as a model of 
cooperative action by the Membership.  He stress ed that the work of the DGCFMC had expanded 
with fresh energy and renewed impetus, in pa rticular under item 6 on the "Qualitative Dimensions 
Accompanying the Quantitative Monitoring and Review of the Evolving Table".   
97. He reiterated the standing position of Director-G eneral Pascal Lamy of the inseparability of 
cotton development assistance from the trade policy asp ects.  Those aspects would remain constant 
features of the work of WTO Members on cotton.  He highlighted that the work of Members and 
participants in the Director-General's Cons ultative Framework Mechanism was part of the 
contributions to the overall efforts to reinfor ce the development dimension of the rules-based 
Multilateral Trading System.  He reaffirmed that th e Secretariat would continue to monitor and report 
to Members progress on any activities "delivered" and "harvested"; new contributions; disbursements 
of current commitments; and, operational status  relating to the commitments undertaken by the 
development community.  Of equal importance, base d on inputs from the recipients of development TN/AG/SCC/W/16 
WT/CFMC/36 Page 18 
 
 
  assistance, the DGCFMC would also continue to m onitor progress in the implementation of domestic 
cotton sector reforms.   
98. He mentioned that there was great interest in  connection with the evolution of South-South 
Cotton Cooperation which had been made possibl e, in particular, thanks to the significant 
contributions of Brazil, China, India and Pakistan.  The reports in the 16
th Round Consultations 
demonstrated clearly that South-South Cooperation would continue to deepen and extend in the 
future. 
 
__________