TN/AG/SCC/W/22  
WT/CFMC/50  
 
 5 February 2015  
(15-0803)  Page: 1/5  
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 KO NG MINISTERIAL DECLARATION 
ITEM 2C - COHERENCE BETWEEN TRADE AND DEVELOPMENT ASPECTS:  
UPDATE ON THE DEVELOPMENT ASPECTS OF COTTON 
Report of the 22nd Round of the Director-General's  
Consultative Framework Mechanism on Cotton1 
28 November 2014 
 
 
 1  INTRODUCTION 
1.1.  Pursuant to paragraph 12 of the Hong Kong Ministerial Declaration, this is the Seventeenth 
Secretariat Progress Report to the Sub-Committ ee on Cotton on the Development Assistance 
Aspects of Cotton. Since the last Progress Report, there have been several developments. First, on 
29 October 2014, the Director-General circulated the 18
th version (WT/CFMC/6/Rev.17) of the 
Evolving Table on Cotton Development Assistance and the 10th version (WT/CFMC/21/Rev.9) of 
the Table on Domestic Cotton Sector Reforms, under cover of his letter addressed to Ambassadors and Permanent Representatives. Second, the 22
nd Round of the Director-General's Consultative 
Framework Mechanism on Cotton (DGCFMC) t ook place on 28 November 2014. Third, WTO 
Members have maintained an active interest on all aspects of the cotton dossier, as mandated in the 1 August 2004 General Council Decision and in the 2005 Hong Kong Ministerial Declaration.       
2  TWENTY-SECOND ROUND OF THE DIRECT OR-GENERAL'S CONSULTATIVE FRAMEWORK 
MECHANISM ON COTTON  
2.1.  The Chairman (DDG David Shark) welcomed all participants to the 22
nd Round of the 
DGCFMC, in particular the C4 participants, as well as Ambassador John Adank, Chairman of the 
Committee on Agriculture in Special Session (CoA  SS) and of its Sub-Committee on Cotton (SCC). 
STATEMENT BY THE C4 REPRESENTATIVE 
 
2.2.  Ambassador Prosper Vokouma, from Burkina Faso, speaking on behalf of the C4 countries 
and other cotton-producing countries from Africa, LDCs and ACP, welcomed the recent end of the 
stalemate in the negotiations at the WTO. He hoped that Members could similarly move forward and overcome difficulties on the cotton issue for its final resolution. He signalled his preoccupation 
about the important drop of cotton prices in international markets which could trigger the return of 
trade-distorting measures by some governments. 
2.3.  The representatives of Argentina, Brazil , China, India and Nigeria shared the concern 
expressed by the C4 in relation to the situation of the cotton sector worldwide as a result of the 
declining cotton prices and requested Members' flexibility in the forthcoming discussions to resolve 
the cotton issue. 
                                               
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to thei r rights and obligations under the WTO. TN/AG/SCC/W/22 • WT/CFMC/50 
 
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  TRADE POLICY ASPECTS OF COTTON 
2.4.  The Chairman of the CoA SS and of its Sub-Committee on Cotton, Ambassador John Adank of 
New Zealand, provided an overview of the state-of-play in the agriculture negotiations, and in 
particular, on cotton.  
2.5.  He made reference to the set of decisions adopted at the last Special General Council 
meeting and in particular the decision concerning  the post-Bali work programme. He stressed that 
cotton remained an important element in the negotiations and that he would be re-engaging 
discussions with concerned Members to ensure substantive consideration of outstanding issues 
with a view to delivering on the cotton mandate within the framework of the agriculture negotiations. 
2.6.  He highlighted that the Second Dedicate d Discussion on Cotton Trade-related Developments, 
with a specific focus on measures applied to cotton exports from LDCs, would be held in the 
afternoon, making it the second time that a full day was dedicated to cotton. 
COTTON PRODUCTION AND TRADE TRENDS 
2.7.  The Executive Director of the International Cotton Advisory Committee (ICAC), 
Mr. José Sette, presented a detailed analysis of the current trends in the world cotton markets, 
where important shifts had taken place within main producers, exporters and importers, and mill 
use. He underscored that the reasons for the slump in cotton prices were due to the persistence of 
cotton production's surplus over demand and substantial stocks being released in the market. He forecasted that world stocks would most likely fall only modestly in the coming seasons, continuing to have an impact on prices.  
2.8.  Mr. Sette projected a somewhat optimistic, soft-landing scenario, where cotton prices would 
gradually return to historical averages at around US ¢70 per pound in the future, thus avoiding a 
fast decline. He elaborated on the eroding co mpetitiveness of cotton vis-à-vis polyester and 
underscored that mill use consumption in developing countries had been dropping continuously.  
2.9.  As regards the situation of African cotton producers, he emphasized that the chronic 
challenge faced by African producers was to increase production efficiency and enhance yields, 
which averaged only 380 kg/ha. 
2.10.  The representatives of Argentina, Burkin a Faso, China, the European Union, Mali and the 
United States welcomed the informative presenta tion by ICAC and engaged with Mr. Sette in a 
lively discussion on several topics, including, inter alia , on mill use projections, production costs in 
different regions and the best ways to enhance yields and add value to cotton products. Mr. Sette 
underscored the paramount importance for African cotton producers to increase production efficiency and yields. Similarly, he considered pivotal to conclude free-trade agreements which 
could allow the importation of machinery at competitive prices and permit LDC countries to export 
finished products without barriers. He finally refe rred delegations to the recent ICAC's publications 
for more precise data on regional costs and yields.  
DIRECTOR-GENERAL'S EVOLVING TABLE ON COTTON DEVELOPMENT ASSISTANCE 
2.11.  The Chairman, in introducing item 5 of the agenda, made reference to the eighteenth 
version of the Evolving Table (ET), circulated to Members by the Director-General on 
29 October 2014 and contained in document WT/CFMC/6/Rev.17. He invited Mr. Gerardo Melogno, 
from the Development Division, to highlight the key points of the latest revision of the ET. 
2.12.  Mr. Gerardo Melogno, Development Division , WTO Secretariat noted that the latest version 
of the Evolving Table had been prepared on the ba sis of inputs from Australia, Brazil, Canada, the 
European Union and some of its member States, Japan and the United States. Inputs had also 
been received from several multilateral organizations, namely: the FAO, IMF, and UNIDO.  
2.13.  He highlighted that in Part I of the ET, co ncerning the ongoing activities of cotton specific 
development assistance, the total value of commitments had slightly diminished to 
US$327 million, whereas the total value of disbur sements had increased to US$98 million. He TN/AG/SCC/W/22 • WT/CFMC/50 
 
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  underlined that the ratio of total disbursements to total commitments had improved from 28% to 
30%.  
2.14.  With respect to Part II, which shows on going activities in the broader framework of 
agriculture and infrastructure-related development assistance, he noted that the value of 
commitments had increased from US$4.78 billion in  the previous version to US$4.85 billion in the 
revised version. The total value of disbursements had remained stable at US$2.68 billion as did the ratio of total disbursements/total commitments, which stayed put at 55%. 
2.15.  Regarding information on completed activities, he reported that the total value of 
commitments in Annex 1, listing activities under cotton specific development assistance, had increased to US$428 million and the actual disbursements related to those activities amounted to US$398 million. Turning to the completed activities in Annex 2 under the framework of agriculture 
and infrastructure-related development assistance, the total value of commitments and 
disbursements had increased to reach US$1.86 billion and US$1.83 billion, respectively.   
2.16.  Mr. Melogno commended donors for their latest contributions but pointed to the need for 
enhanced reporting, in particular in connection with some long-standing activities, for which 
notifications were still missing. He reminded the development community that sending the related information was crucial to render the Evolving Ta ble as accurate and meaningful as possible.  
2.17.  As far as the notification of National Cotton Sector Focal Points was concerned, he stated 
that three late additions had been received by the Secretariat and that their number had 
reached 14. He urged other cotton proponents to communicate the names and coordinates of their national focal points to complete the list.   
2.18.  The focal point of Burkina Faso intervened to stress the economic and social importance of 
the cotton sector in his country, which involved 350,000 farmers and from which 4 million people 
in rural areas made a living. He underlined that, since 2006, the Government had been 
successfully managing a Cotton Price Smoothing Mechanism for the farmers to minimize price 
variations and volatility. He also stated that 70% of cotton plantings in the country for the 2014/15 season was genetically modified (GM) cotton.   
2.19.  He expressed satisfaction regarding the us er-friendly structure of the Evolving Table on 
Cotton which made possible to assess more rapidly the operational evolution of activities. He suggested that it would be useful if donor countries could also indicate their own national focal points and be listed in the Evolving Table in orde r to improve coordination, follow-up and reporting 
of activities.  
2.20.  The focal point of Benin thanked the deve lopment community for the assistance provided 
and noted that, despite all the achievements  registered, there were some areas where 
improvements were still needed. He cited, amongst those areas: the national processing of cotton; 
optimising production costs through the renewal of production facilities and textiles industries, and better use of energy. He underscored that the impl ementation of new projects would give fresh 
impetus to the sector. The outlined projects for which donors' support was requested involved: the 
management and reorganization of the cotton sector per zone; reducing cotton contamination; re-launching the local textile industry and strengthen ing the energy supply system for factories.  
2.21.  The representative of the United States pointed out that it remained committed to cotton 
development assistance and commended the useful updates provided by the C4 countries. She 
mentioned that one US project in favour of West  Africa had recently been completed and another 
one regarding technical assistance for the same region was in the formulation stage. The US would 
be sending the relevant inputs to the Secretariat in due course.   
2.22.  While she recognized that some progress had been achieved by the C4 countries in relation 
to privatization and reforms, she considered there was still room for improvement in relation to 
project coordination, implementation mechanisms and institutionalizing more effective market-
based operations, including better price transmissi on to farmers and good risk-management tools.  TN/AG/SCC/W/22 • WT/CFMC/50 
 
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  2.23.  The representative of Nigeria highlighted that it would be very useful if other focal points 
could be given the financial support to enable them to participate in the consultations, providing 
important inputs and adding value to the discussions. 
2.24.  The Chairman concluded the discussions under  item 5 by expressing appreciation to the 
development community for its engagement and sustained contributions. He underscored, 
nonetheless, the necessity to further enhance their reporting to the Evolving Table, in particular, 
regarding some long-standing projects for which no disbursement status had been communicated.    
SOUTH-SOUTH COTTON COOPERATION  
2.25.  The representative of China recalled his country's engagement in favour of African countries 
to upgrade cotton production in the framework of South-South cooperation, covering technical 
extension and demonstration, capacity-building and the facilitation of irrigation equipment and 
small farm machines. He stressed that South-South cooperation on cotton could play a pivotal role 
in helping African countries develop their cotton sector. He emphasized that China would increase its assistance in that regard and would keep th e Consultative Framework Mechanism duly informed 
of new developments. 
2.26.  The representative of Brazil underscored that his country remained committed to South-
South cooperation in favour of the C4 and other African cotton-producing countries. He noted that 
he would be communicating to participants in the DGCFMC the practical orientations of the new 
Government in place in that regard. 
2.27.  The representative of India gave details of  his country's technical assistance to the cotton 
sector for African countries to strengthen the cotton value chain. He enumerated several activities 
that India was planning to complete by March 2015, such as: the setting up of a regional 
knowledge cluster and training centre on post-har vest and ginning technology and a bio-pesticide 
production laboratory. Moreover, India was conducting various training programmes on modern 
cotton production technology; post-harvest mana gement and value addition to crop residue; 
farmer field schools, and a regional training on strengthening the textile sector. He stressed that his country would continue with that kind of support in the future. 
2.28.  The representative of Burkina Faso than ked Brazil, China and India for their valuable 
support in the framework of South-South cotton cooperation. He recalled that the C4 countries had 
supported a regional initiative aimed at broadening the number of beneficiaries of cotton development assistance.  
2.29.  The focal point of Chad commended China for its donation of fertilizers for cotton production 
and the technical training on planting, processing and marketing of cotton. He referred to the 2010 
new textile facility with new spinning techniques established with the financial help of India. He 
acknowledged with appreciation India's grant which allowed the expansion of the factory, 
introducing weaving, dying and printing capabilities. He also noted Brazil's training for managers in cotton production and the establishment of a research centre on new cotton varieties. 
2.30.  The Chairman underlined that South-South Cotton Cooperation constituted a good example 
of constructive development cooperation within the multilateral trading system. He encouraged 
other Members in a position to do so to de epen and extend that kind of cooperation. 
DOMESTIC COTTON SECTOR AND OTHER REFORMS / NATIONAL COTTON SECTOR FOCAL 
POINTS 
2.31.  The Chairman made reference to the tenth version of the Table on Domestic Cotton Sector 
Reforms for Enhanced Development Assistance which had been circulated on 29 October 2014 as 
document WT/CFMC/21/Rev.9, with new contributions from Benin, as well as the continuation of 
the prevailing initiatives in Burkina Faso, Chad and Mali.  TN/AG/SCC/W/22 • WT/CFMC/50 
 
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  2.32.  He highlighted that the Secretariat had lately received the name and coordinates of three 
additional focal points, from Burundi, Central African Republic and the Democratic Republic of Congo, increasing the total number to 14. He encouraged other producing countries to designate and notify their National Cotton Sector Focal Points in order to complete the list. 
2.33.  The focal point of Benin said that following a continuous drop in cotton production since the 
2008/09 season, the Government had decided in 2012 to intervene temporarily in cotton 
production and commercialisation activities, suspending momentarily the framework agreement 
with the AIC. Those transitional measures had resulted in a production increase in the 2012/13 
season. She stressed that a new organization scheme for the cotton sector would be put in place on the basis of a public/ private partnership. She finally mentioned that an in-depth reform of the 
AIC status was also envisaged.   
2.34.  The focal point of Mali commented that the call for tender for the privatization of the CMDT 
listed in the Table on Domestic Cotton Sector Reforms had not reached a successful conclusion. He 
also informed participants that cotton producers federated under the UNSCPC had become 
shareholders in the capital of the national cotton se ctor up to the amount of 20%. Furthermore, he 
noted that the mandate of the MRSC to restru cture the cotton sector had been extended until 
30 June 2015. 
2.35.  The focal point of Burkina Faso pointed out that his Government was in the process of 
overhauling and reinforcing its Cotton Price Smoothing Mechanism. That reform should be 
completed by the first half of 2015. He stressed that the slump of international cotton prices, compounded by the exchange rate peg of the FCFA to the Euro, were having a harsh impact on the 
cotton sector conducive to an accentuation of poverty in rural areas with negative side-effects on 
cotton production, processing and transportation. 
2.36.  The focal point of Chad underscored that Central African countries in general, and Chad in 
particular, had benefitted less from cotton development assistance compared to other countries. 
He mentioned that his country had undertaken cotto n sector reforms aimed at reducing poverty on 
two counts: institutional and accompanying measures. Those measures included, inter alia : 
capacity building for producers; tax cuts and allocation of additional financial resources; 
rehabilitation of cotton roads; research for better cotton varieties and developing the inter-professional management of the cotton sector.  
3  CONCLUSION 
3.1.  The Chairman concluded the meeting by re iterating the emphasis that Director-General 
Roberto Azevêdo placed on the cotton dossier. He highlighted that the Secretariat would continue 
to monitor and report to Members new contributions and updates to the Evolving Table and 
progress regarding the implementation of domestic cotton sector reforms. He stressed that it was 
crucial that both the development community and beneficiaries continue and enhance their submission of inputs to enable the Secretariat to present the most accurate and comprehensive 
data in both Tables. He emphasized that South-South Cotton Cooperation was an important aspect 
of the implementation of the mandate on the de velopment assistance aspects of cotton and that 
there was wide recognition of that important dimension of the work in the DGCFMC. The significant contributions of Brazil, China and India in that  respect were highly regarded by all actors. 
3.2.  The Chairman encouraged all parties to ex pand even further the dialogue and information 
exchange and build on the positive dynamics of constructive engagement to reinforce the development dimension of the work in the WTO. He announced that the next round of 
consultations would take place towards the middle of next year and that it would be held back to 
back with the next dedicated discussion to examin e relevant trade-related developments on cotton 
in the context of the Committee on Agriculture in Special Session. The Secretariat would consult 
with regard to the specific dates. 
 
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