RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/AG/SCC/R/7 
17 November 2005  
 (05-5457) 
Sub-Committee on Cotton  
 
 
 
SUMMARY REPORT ON THE SEVENTH MEETING OF THE SUB-COMMITTEE 
ON COTTON HELD ON 28 OCTOBER 2005 
 
Note by the Secretariat1 
 
 
1. The Sub-Committee on Cotton, which was esta blished by the Committee on Agriculture, 
Special Session at its formal meeting on 19 No vember 2004 in accordance with the instruction 
resulting from the decision on the Doha Work Pr ogramme adopted on 1 A ugust 2004 by the General 
Council (WT/L/579, refers), held its seventh m eeting on 28 October 2005 under the chairmanship of 
Ambassador Crawford Fa lconer of New Zealand. 
2. The agenda as contained in WTO/AIR/2699 was adopted. 
ITEM A:  ASSESSMENT OF PROGRESS IN THE AGRICULTURE SPECIAL SESSION  
(i) Statement by the Chairman 
3. Under this agenda item the Chairman gave his assessment of progress in the agriculture 
negotiations with a particular focus on cotton.  A summary of the  statement made by the Chairman is 
attached to this report (see Annex 1). 
(ii) Statements by Members 
4. The representative of the Eur opean Communities underlined th e need for a change in the 
pattern of the discussions in the Sub-Committee on Cott on.  He noted that for the last three meetings 
of the Sub-Committee, there had not been any real discussion at all, apart from statements by the 
African Group, positive responses by the European Communities and minimal to no reaction from 
other Members of the Organization.  The Europ ean Communities believed that Members were at a 
cross-roads and that they had to get into a more in teractive discussion.  Cotton was of course part of 
the overall agricultural negotiations, but that did not mean that cotton had to be left subordinated to 
the overall agricultural negotiations. 
5. The representative of the European Communities recalled that the European Communities had 
put its offer for agriculture on the table that day,  and hoped that Members could, very shortly, assess 
the situation and enter into final negotiations.  Members were all working for full modalities for 
agriculture in Hong Kong and the European Co mmunities did not see any impediment to start 
discussing more concretely what c ould be achieved for cotton as part of the results of the Hong Kong 
Ministerial Conference.  The Membership had to find an agreement on specific action to overcome 
the distortions to trade in cotton created by deve loped countries, including dates and modalities for 
early implementation.  The representative of the European Communities reca lled that in the July 
Framework, Members had agreed to (i) have a speci fic solution for cotton - hence this solution had to 
be specific in comparison with the rest of the approach for agricultural products; (ii) to do so 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to their rights or obligations under the WTO. TN/AG/SCC/R/7 
Page 2  
 
 expeditiously - hence there was a sense of urgenc y as far as cotton was concerned; and (iii) be 
ambitious - hence Members had to try to go further for cotton compared to other agricultural products. 
6. The representative of the European Communities also noted that the African Group had put a 
number of proposals on the table and that the European Communities had positioned itself quite 
precisely vis-à-vis those proposals.  One of the essential elements in the European Communities' 
answer to the African Group proposals was that it was fully in favour, as from day one of the 
implementation of a multilateral agreement in th e context of the Doha Round, to frontload its 
application for cotton in all three pillars.  The re presentative of the European Communities concurred 
with an earlier point made by the Chairman on the n eed to negotiate the phasing out of all forms of 
export subsidies and recalled that the EC had si gnalled that it would agree, as from day one, to 
eliminate all export subsidies for cotton.  This woul d amount to a specific, very expeditious and very 
ambitious approach to cotton compared to other agri cultural products.  Also, with regards to market 
access, the European Communities wa s prepared to consolidate and bind, as from day one of the 
implementation of the Doha Round Agreements, full-quota and duty-free access for cotton originating 
from both LDCs and other developing countries.  Finally, the representative of the European 
Communities noted that the European Communities w as prepared to apply to cotton, from day one, 
the substantial reduction of trade-distorting domes tic support envisaged for all agricultural products. 
7. The European Communities called on other Member s to share for example their thoughts on 
the ideas put forward by the European Communities to address cotton specifically, expeditiously and 
ambitiously rather than repeating previous stat ements.  In particular, the European Communities 
wished to know what was the position of other de veloped countries on the idea of frontloading the 
implementation of cotton-related commitments at th e very beginning of the implementation of the 
agreements resulting from the Doha Round. 
8. Zimbabwe recalled that the Cotton issue was a problem common to the vast majority of 
African countries, 33 of which produced cotton, he nce the issue of cotton had to be addressed 
transparently and everybody included in any benefits  or studies carried out.  In this regard the 
representative of Zimbabwe wished to caution th e Membership against excluding other African 
cotton-producing countries from the particular atte ntion given to West and Central African cotton 
producers.  The representative of Zimbabwe underlined that such practice could be likened to a farmer 
trying to get rid of pests in a little corner of his field thinking that he could rid the whole field of the pests by addressing only one part, but eventually ended up with his entire crop damaged.  The 
representative of Zimbabwe concluded by underlining that.  Zimbabwe was not happy with the way in 
which the cotton issue had been addressed up to now by those who thought they might have a solution 
for that particular issue. 
9. Benin, referring to the European Communities'  intervention, welcomed the fact that the 
European Communities had reacted clearly to the African Group proposal, but noted that the African 
Group would have liked the European Communities to  make those proposals in writing.  Benin was 
grateful to the European Communities for havi ng taken a position on the African Group's proposals 
but it wished to see further steps, because although it was a step in the right direction, a 65 per cent 
decoupling for cotton in the CAP was not sufficien t, bearing in mind the realities on the ground. 
10. Benin agreed with the European Communities that Members should not allow the Sub-
Committee's meetings to be reduced to a monologue by the African countries.  The other countries, which held the key to the problem of cotton, also  had to speak out and come up with proposals which 
could foster discussions and solutions.  Benin noted that African countries had put a lot of effort into 
the matter from the outset, and had made several propo sals, which were yet to be answered.  The time 
had come for countries to react and make written proposals, as had recently been the case with the 
submission of detailed proposals on agriculture, becau se cotton could only be r esolved in the context 
of a prevailing favourable climate concerning the se ttlement of agricultural issues.  However, Benin 
also noted that while the July 2004 Framework gave  Members a mandate to deal with cotton within  TN/AG/SCC/R/7 
 Page 3 
 
 
 the context of the agricultural negotiations, it also sp ecified that they do so in a specific, expeditious 
and ambitious manner. 
11. In response to the call by Benin that th e European Communities submit in writing its 
proposals, the representative of the European Co mmunities noted that the position the European 
Communities had expressed at numerous meetings of the Sub-Committee was fully reflected, in 
writing, in the summary reports prepared by the S ecretariat on those respective meetings of the Sub-
Committee.  Hence the European Communities asked the African Group and those Members 
requesting a written reply to refer to those summa ry reports from the Secretariat.  Finally the 
European Communities recalled that it only represen ted 2 per cent of world cotton production unlike 
other developed countries which were much more  influential on the world market for cotton. 
12. The representative of Burkina Faso  noted that the drama was not taking place in the room, nor 
in Geneva but rather on the field, a long way aw ay and was hence difficult to be described very 
accurately.  Burkina Faso, echoing the European Comm unities and Benin, noted that since the start of 
the work of the Sub-Committee, it had been African countries doing most of the talking and that they 
had repeatedly made statements calling for an urgent  resolution of the issue of cotton along with calls 
for reactions to the proposals tabled by the Afri can Group.  The July Fram ework was clear, as were 
the mandate and objectives for cotton, but Members ke pt passing the time talking about other issues 
without really coming to the point. 
13. The representative of Burkina Faso underlined  that Hong Kong was around the corner and 
despite the calls for optimism, Members did not yet know what would come out of the Ministerial Conference.  Burkina Faso, at this stage, believed that such optimism seemed to be a bit far-fetched 
and alerted Members to the fact that, unless ther e was movement before Hong Kong, they would 
obviously have travelled to Hong Kong for nothing.  Burkina Faso did not want all the energy, 
meetings, discussions and studies that had been spen t since 2003 on the issue of cotton to go to waste.  
Burkina Faso wished to appeal to other Members,  through the Chairman, to come to grips with 
matters so that through negotiations, a result satisfactory to all parties could be reached. 
14. Burkina Faso noted that cotton-producing countries had chosen the method of dialogue, 
discussion, and explanations of the reality on th e ground, and that had convinced many people with 
exchanges from both sides.  At the last meeti ng, the cotton-producing countries had expressed the 
hope that the Chairman of the Committee on Agri culture and of the Sub-Committee on Cotton would 
visit one of their countries, and Burkina Faso was pleased to hear that th e Chairman had programmed 
a visit to Benin, a cotton-producing country.  Th e representative of Burkina Faso hoped that the 
Chairman would have the opportunity to visit a cotton plantation and to see for himself the reality on 
the ground allowing him to be even better placed to ta lk about the issue of cotton.  Burkina Faso also 
mentioned the long-standing deficits of its cotton se ctor and the burden that had placed on farmers.  
Burkina Faso hoped that under the Chairman's leader ship and with his mastery of the dossier, he 
would ensure that all the partners put their heads toge ther, have useful exchanges, and that by the time 
of the Hong Kong Ministerial Conference, Afri can cotton-producing countries could have more 
grounds for hope than they had now. 
15. The representative of Zambia thanked the Eur opean Communities for its statement and hoped 
that the European Communities would take further steps to reflect the spirit and letter of paragraph 46 
of Annex A of the July Framework.  Zambia also noted its gratitude to the delegation of New Zealand 
which did not intervene but which Zambia belie ved would have also supported the European 
Communities' proposal and would also go further to implement what was in paragraph 46 of 
Annex A.  Zambia stressed that both the devel opment and the trade aspects of cotton remained an 
issue of concern to cotton producers and this wa s why the call for an expeditious, specific and 
ambitious response to cotton was made.  Zambia acknowledged the fact that some work was on the 
way on the development track and stres sed that efforts in that regard s hould not be restricted to a few, 
but benefit all cotton producers.  On the trade aspec ts, Zambia noted with concern the slow pace of TN/AG/SCC/R/7 
Page 4  
 
 the negotiations on agriculture and informed Members that in Zambia, more than 10 per cent of the 
population depended on cotton for their livelihood.  Za mbia also noted that with 260,000 small-scale 
farmers, there were more cotton farmers in Zamb ia than in the United States for instance, where 
25,000 farmers grew cotton. 
16. Egypt, on behalf of the African Group, stated that the Group attached great importance to the 
issue of cotton and that the Group wanted to have results for cotton in Hong Kong.  The demands put 
by the African Group in the paper it had submitted to the Sub-Co mmittee were still on the table and 
African countries needed to see actions and they wa nted other Members to be more forthcoming in 
the search for solutions.  Egypt stressed that Members had to think of ways in which to respond to the 
proponents' demands in terms of the outcome  of the Hong Kong Ministerial Conference. 
17. Australia underlined its support and that of the Cairns Group for the cotton initiative, noting 
that it had particular resonance for some countri es in the Group, such as Paraguay, which depended 
heavily on the crop.  Australia welcomed again the recent offer by the United States on domestic 
support as a serious contribution, notwithstanding that improvements were possible, including in relation to the Blue Box, where a number of Cairns Group members had offered ideas.  The 
representative of Australia said that Australia hope d that the same movement would be possible by 
others in the area of market access in order to move the negotiations forward. 
18. The United States stated that it was encouraged by the vigour of the European Communities' 
statement and hoped that this indicated a real moveme nt towards the high level of ambition, especially 
in the pillars of market access and domestic suppor t, established by the Unit ed States in its recent 
proposal.  The United States noted that it was by significantly increasing the levels of ambition in all 
three pillars that Members would find the room to address cotton. 
19. Statements made by the following delegations  were forwarded to the Secretariat and are 
attached to this summary report:  Benin, Br azil, Chad, Colombia, and Cuba (see Annex 2). 
I
TEM B:  COHERENCE BETWEEN TRADE AND DEVELOPMENT ASPECTS : UPDATE ON THE 
DEVELOPMENT ASPECTS  
20. The Chairman recalled that the terms of re ference establishing the Sub-Committee on Cotton 
clearly referred to the need for coherence between trade and development aspects of the cotton issue 
(paragraph (a), TN/AG/13 refers). 
(i) Statement by the Secretariat 
21. On behalf of the Secretariat, Mr. Chiedu O sakwe updated the Sub-Committee on the Fifth 
Round of Consultations on the Development Aspect s of Cotton which took place earlier on the same 
day.  The Secretariat report outlined the latest  activities of the following bilateral donors:  the 
European Union, Japan and the United States, and those of the following multilateral agencies:  the 
ADB, the CFC, the OECD, the IMF, UNIDO and the World Bank. 
22. The statement made by the Secretariat will be circulated shortly as document 
TN/AG/SCC/W/5. 
(ii) Statements by Observer Internationa l Intergovernmental Organizations 
23. There were no statements by Observer Inte rnational Intergovernmental Organizations.  TN/AG/SCC/R/7 
 Page 5 
 
 
 (iii) Statements by Members 
24. The representative of Côte d' Ivoire introduced a document called "Strategy for Reviving the 
Cotton Sector in Côte d'Ivoire".  The document subm itted by Côte d'Ivoire is attached to this report 
(see Annex 3). 
25. In closing the meeting, the Chairman said that he  looked forward to targeted interventions by 
Members on their assessment of progress in the Agriculture Special Session and to continued 
contributions by International Intergovernmental Organizations to the discussion on the development-
related aspects of cotton. 
26. The Chairman asked that any delegation that wa nted its statement included as an attachment 
in the summary report on the formal meeting should send it to the Secretariat in electronic format as 
soon as possible. 
ITEM C:  OTHER BUSINESS  
Date of the Next Meeting 
27. The next meeting of the Sub-Committee w as tentatively scheduled for 14 November. 
Chairman's Report to the Special S ession of the Committee on Agriculture 
28. The Chairman stated that in making his repor t on the meeting to the Special Session of the 
Committee on Agriculture, he would bear in mind the statements made by all Members, and that the 
report would be short and entirely factual.  Keeping in mind the interests of all Members, the report would be circulated to Members and if a factual error was discovered an amendment would be issued. TN/AG/SCC/R/7 
Page 6  
 
 Annex 1
 
 
Statement by Ambassador Crawford Falconer of New Zealand 
at the Seventh Meeting of the Sub-Committee on Cotton held on 28 October 2005 
 
 
Agenda Item 2(A):  Assessment of Progress in the Agriculture Special Session  
   Obviously, the perspective that I bring to th is is the manner in which the negotiations on 
agriculture have a bearing on cotton.  Those of y ou who have been attending the transparency sessions 
on agriculture will have already heard probably very much what I have to say.  So I apologize for repeating it but in some sense it is important to do so.   I do think that, as I have said before in other places and occasions, on the export competition 
pillar, although we have consider able work to do, and I do not underestimate the importance of the 
work that remains to be done, that it is still concei vable and within the realm of possibility to have a 
substantive outcome technically as it were on the ex port competition pillar.  That would presumably 
mean, if it was possible to make sure that we made  the kind of progress we n eed to make in parallel 
on issues like export credits, food aid and state trading enterprises, that we could in relation to those and with export restitutions be in a position to have possibly a concrete sense of when export 
competition measures would be phased out. 
  Now, there would be obviously a potential applicability to cotton and I think that it is 
certainly conceivable that we could find a way to deal with that.  
 On domestic support, the situati on is less clear.  I would not say that export competition is 
clear but I think that one can have a sense of where one would end up.  In respect of domestic support, 
I think things are less clear than that, but I think that we are poten tially getting into a zone that is 
doable.  Now, what the precise definition of that would be still requires some very significant negotiations to occur.  But I think with the existing proposals from the European Communities and 
with the new proposal from the United States, I thi nk we have, even just taking those into account, 
seen the landscape significantly changed since the end of July.  And there are undoubtedly things that 
would need to be resolved but I think it is not im possible to discern the ou tlines of the possible basis 
of the deal.   Now, how would that apply to cotton?  Of cour se it is a bit indeterminate but obviously if the 
cuts to domestic support were to go far enough and if they were to go onto the AMS, and we know 
that they will do so to some extent, there will be effects on cotton support.  The real question is also 
whether in the Blue Box area it would be possible to find a sufficient balance between cuts and disciplines that would together with what is prop osed in the Amber Box, genuinely constrain product-
specific programmes in such way that they will be diminished and cotton would be a primary 
example. 
 
 Now, at the moment we do not have that degree of specificity in the negotiations but I think we are starting to see preliminary conditions emerge which will give ground for confidence that it could be possible to do that, whereas a little while ago it would have been very difficult to imagine 
this as even being a possibility.  But I would not wa nt to overstate it because there is clearly quite a 
considerable degree of negotiations that would remain to be done for that to be achieved.  But I am 
conscious that this has been an area, and we have discussed this elsewhere, where it is really 
important that we continue the dialogue and inte nsify the consultations among principally affected 
delegations in order to try and get some real clarity urgently about what might be possible. 
  TN/AG/SCC/R/7 
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  Now, on the market access pillar, as everybod y is aware, we find ourselves in a situation 
where there is not any potential degree of converg ence that would enable one to see where we can 
move forward.  I remain hopeful that maybe with ev ents that have occurred today or in the process of 
occurring that that part of the landscape may also be  changed.  And that has a bearing directly on 
cotton because there is a market access aspect to cotton as well, which we should not forget, but also 
because obviously the other two pillars are never going to progress unless we also have progressed on 
market access, as well beca use they are politically connected.  A nd that is where I see that we are. 
  Obviously, in a broader context, we have seen a great number of proposals come onto the 
table which reflect the degree of intensity we have  found now in the negotiations and the run-up to 
Hong Kong.  We have had some pretty intensive in formal discussions on a whole range of issues.  
I have met with delegations informally and held informal open-ended meeti ngs with delegations.  
I will not repeat all the subjects that we have cove red but I think we have had some pretty intensive 
coverage of issues and that includes on cotton, where not only have we met at official level in various 
forms, but we have had occasions to meet with  Ministers from cotton-producing countries very 
recently in fact as well, and that will be ongoing. 
  Now, clearly, if we do manage to make progress towards convergence on the third pillar of 
the agriculture negotiations, then it would be very im portant that we work very intensively in a broad 
agricultural context as early as next week.  It sh ould go without saying that the same applies for 
cotton.  I mean this is something that we have ve ry clearly and specifically provided for in the July 
Framework.  There are expectations.  Indeed, I thi nk there are obligations that are laid out in that 
framework that we are all committed to meeting and we will have to ensure that our work between 
now and Hong Kong reflects that and th at will require considerable effort. 
  In parallel, if you like, with what is going on more generally with agriculture because clearly 
there is a cross linkage there, certainly we have a very specific mandate on cotton, it is undeniable.  It 
exists in the same right.  But it is also true that there is a context in which this is occurring which one 
would hope would be positive rather th an negative in developing the sy nergies with cotton itself.  And 
that is essentially where I see us being.  I have tried not to over-dramatize things.  I do not like to 
over-dramatize things.  I think one has to be pretty  sober-minded assessing where things are.  I have 
said that I do think that we have been in a situation where we are pretty much at the point of absolute 
decision just because of the timing factors and I think it has been quite clear that  that is the sense that 
has been shared politically among Members and I think we are seeing the fruits of that and the efforts 
that are being made to advance the negot iations almost literally at this moment. 
  So I think by next week we will have a clearer  picture of how we can move forward and then 
we can perhaps take some more concrete steps at that point. 
       
 
  TN/AG/SCC/R/7 
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 Annex 2
 
 
Statements at the Seventh Meeting of the Sub-Committee on Cotton held on 28 October 2005 
  
Agenda Item 2(A):  Assessment of Progress in the Agriculture Special Session
 
 
 
Statement by Benin on Behalf of the Co-Sponsors  
of the Sectoral Initiative in Favour of Cotton  
 
 Mr Chairman, Excellencies, Distinguished delegates, 
Ladies and gentlemen, 
  Mr Chairman, I should like to thank you for the briefing you have just given us on the status 
of the agricultural negotiations.   This session of the Sub-Committee on Cotton is  taking place at a critical stage in our 
negotiations. 
  Today, we are one and a half months from the Hong Kong deadline, two weeks away from 
the deadline for the first draft of the Hong Kong  Declaration, and yet the cotton issue remains 
unresolved. 
 
 Over the past two weeks we have taken part in a number of consultations initiated by the 
Chairman of the Committee on Agriculture.   Moreover, two Ministers for trade from countries of co-sponsors of the initiative in favour of cotton, as well as representatives of African cotton-producing countries, visited Geneva on 
19 and 20 October 2005.  On this occasion, several  consultations were organized with a view to 
seeking a solution to the cotton issue.   At the conclusion of all these consultations, the lack of progress on the issue has to be 
deplored. 
 
 As proof of this, the proposals made by the major global trade actors have not taken into account the cotton issue at all.   At the same time, the situation in our c ountries has deteriorated, resulting in large budget 
deficits in countries because of their diminished earnings and the population's inability to pay for 
food, the education of their children, health and sustainable housing. 
  As an example of this, I should like to inform  you of some alarming statistics regarding loss 
of earnings in some of our countries during the 200 4-2005 cotton season alone.  In Benin, the loss was 
over CFAF 30 billion, equivalent to some €46 million.  In Burkina Faso, the loss is estimated to be 
CFAF 40 billion, approximately €62 million. 
  The situation is similar in the other West and Central African cotton-producing countries, 
with the consequent disastrous economic and social  effects for these countries and their populations. 
  TN/AG/SCC/R/7 
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  This is why the countries co-sponsoring the sect oral initiative in favour of cotton urge the 
WTO Members at this stage of our negotiations to  comply with the decision taken at the end of 
July 2004 by the WTO General Council that cott on should be addressed ambitiously, expeditiously 
and specifically.  
 We must therefore pursue our consultations w ith a view to reaching a consensus that takes 
into account the legitimate concerns of African count ries, in particular regarding the elimination of 
subsidies and domestic support granted to cotton producers by some WTO Members.   The Member countries concerned should theref ore make concrete proposals on cotton relating 
to: 
  - The deadline for phasing out export subsidies on cotton;   - the timetable for the substan tial reduction of domestic support; 
 
 - the elaboration of disciplines that prohibit changing unauthorized support into 
authorized support and enable it to be monitored; 
  - the establishment of a support fund, to be financed through special budgetary aid, in 
order to offset the deficit caused by the re duction in cotton prices on the international 
market. 
  We strongly recommend that the text of the draft declaration for the Hong Kong Ministerial Conference, which will be published in a few days time, take into account these important elements. 
 
 We must act quickly so as to obtain tangible, appropriate and effective results on cotton at the 
Ministerial Conference in Hong Kong.   Thank you.  TN/AG/SCC/R/7 
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 Statement by Brazil
 
 
 
 Mr. Chairman, 
 
 Brazil would like to emphasize the importance it a ttributes to the issue of cotton.  Cotton has 
to be part of the decisions in Hong Kong and for that we - as always indicated – stand ready to contribute.   The G-20 has always made reference to the issue of cotton at its highest level of decision, in 
its Ministerial Declarations and its proposals that relate to the matter. 
  In our view a solution to this problem is linked, among other things, to the issue of the product-specific cap in AMS and its extension to the Blue Box as a way to discipline trade distorting domestic support.  
 
 We continue to count on the support of the Membership, especially the developed countries, 
to address this problem in the most expedited way possible. 
  TN/AG/SCC/R/7 
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 Statement by Chad  
 
 
 Thank you, Mr Chairman, for your continuing e fforts to arrive at a satisfactory conclusion to 
the agriculture negotiations in general, and in the Sub-Committee on Cotton in particular. 
After the statements by my colleagues from Benin and Burkina Faso, which clearly and 
precisely set out the situation of our cotton farmers a nd their grievances, we venture to hope that we 
shall reach acceptable conclusions aimed at improving their living standards. 
Accordingly, I would appeal to our developm ent partners to support us in this process. 
I should also like to say to our great partner,  the European Union (w hose statement a short 
while ago on their new proposals I welcome) that we should like to see a reply to our modalities in 
writing, and not just orally.  That will enable us to assess the evolving situation with regard to our 
proposals. 
Thank you. 
 TN/AG/SCC/R/7 
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 Statement by Colombia
 
 
 
Mr Chairman, 
Colombia is interested in ensuring that we co mply with the mandate of the July Package by 
addressing the cotton issue "ambitiously, expeditiously, and specifically". 
This means, in particular, seeking commitments  on substantial reductions  in trade-distorting 
domestic support, substantial impr ovements in market access, and a date for putting an end to the 
export subsidies of the developed countries. 
We are also interested in ensuring that a prope r solution is found to the cotton issue for the 
Ministerial Conference in Hong Kong. 
Thank you. 
  TN/AG/SCC/R/7 
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 Statement by Cuba  
 
 
Thank you, Mr Chairman. 
Our delegation associates itself with the statem ent made by the delegate of Colombia, and 
agrees that it is essential to comply with the mandate  of the July Package and to respond urgently to 
the various issues raised in the Initiative on Cotton. 
Indeed, rapid compliance with this Initiative is  closely linked to the lives of millions of 
African farmers, and finding a solution is a matter of life or death their families. 
The cotton issue has connotations that go well beyond trade, and by duly responding to the 
just demands of the African countries, we would al so be solving some of the socioeconomic problems 
facing them.  This, it its turn, would help us to ach ieve sustainable and lasting solutions to general 
problems like immigration, which affect the developing countries as well. 
Once again, we stress the urgency of responding  to the grievances expressed by the sponsors 
of the Initiative on Cotton.  A solution to the cotton issue would not only favour those who have 
raised it, but one way or another, would also  be positive to all of the countries involved. 
Thank you, Mr Chairman. 
 TN/AG/SCC/R/7 
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 Annex 3
 
 
Statements at the Seventh Meeting of the Sub-Committee on Cotton held on 28 October 2005 
 
 
Agenda Item 2(B):  Coherence Between Trade and Development Aspects:  
Update on the Development Aspects of Cotton   
 
 
Statement by Côte d'Ivoire  
  
STRATEGY FOR REVIVING THE COTTON SECTOR IN COTE D'IVOIRE 
 
 Context and justification for the study
 
  Cotton plays a relatively important role in Cote  d'Ivoire's economy because of its contribution 
to GDP (1.7 per cent) and exports (7 per cent).  Although at the national level these figures do not 
take sufficient account of the role played by develo pment of the cotton sector, looking more closely at 
the north of Cote d'Ivoire makes it easier to unders tand its role in combating poverty and inequality.  
Cotton:  (i) covers two thirds of the area suitable for cultivation in the north;  and (ii) 40 per cent of production is mechanized.  
 Despite its importance, Ivorian cotton has felt the effects of high production costs that have 
diminished its competitiveness.  Following the de valuation of the CFAF, the Ivorian authorities 
liberalized the cotton sector in order to lower the costs resulting from close State involvement and to 
improve competitiveness within the framework of th e agricultural sectoral adjustment credit (CASA). 
 
 These efforts have been hampered by the intern ational environment which, as a result of large 
subsidies, exacerbated the trend towards lower gl obal prices and impoverished producers.  A number 
of studies have highlighted the considerable loss of revenue for the State and producers in Cote 
d'Ivoire.  In view of this situation, some A frican countries submitted the cotton initiative to the WTO 
in order to seek the elimination of subsidies a nd compensation for the prejudice suffered as a result of 
the fall in prices caused by subsidies.  The inte rnational community became aware of the drastic 
situation in the cotton sector and promised a respon se to deal with it, for example, at the Cancún 
Ministerial Conference in September 2003 and the meeting of producing countries and the European 
Union in Paris in July 2004.   In addition to the subsidies, Cote d'Ivoire has been facing a political crisis that has led to an 
upheaval in the cotton sector by multiplying the constraints, in particular:  (i) accumulation of 
payment arrears by producers;  (ii) problems in obtaining supplies of agro-pharmaceutical products and seeds;  (iii) collection of seed cotton and its dispatch to factories;  (iv) destruction of tracks leading from the fields to the factories;  (v) cotton disappearing to neighbouring countries;  and (vi) the accumulation of arrears for inputs by producers.  
 The latest crisis has modified production capac ity both in terms of quantity and quality.  The 
forecast for the 2004-2005 season is around 400,000 tonnes, compared with 180,144 tonnes of seed 
cotton actually produced during the 2003-2004 season, when the estimates were 400,000 tonnes.  The 
resulting drop in production is a constraint on industrialization, the poverty reduction policy and, 
consequently, on the development of the zones concerned. 
 
 Faced with such a situation, the Ivorian Government has drawn up a strategy to revive the cotton sector that takes into account both the emer gency situation resulting from the political crisis,  TN/AG/SCC/R/7 
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 the international environment defi ned by determination to support ac tivities in the cotton sector and 
the expectations of producers and other stakeholders.  
PART II.  OBJECTIVE 
 The overall objective of this strategy to revi ve the cotton sector is to reduce poverty in the 
regions producing cotton while at the same time  improving the output and competitiveness of Ivorian 
cotton, with close involvement of stakeholders.   The aim will be:  
 (i) To offset the impact of the political cr isis and to enhance the production environment; 
  (ii) to increase the revenue and competitiveness of actors in the cotton sector;   (iii) to strengthen agronomic resear ch and its links to stakeholders; 
 
 (iv) to establish a financing system that involves the stakeholders;  and   (v) to build the capacity of stakeholders in the cotton sector.  
PART III.  THE VARIOUS COMPONENTS OF THE PROJECT 
Component 1:  Programme of urgent action to be taken to offset the effects of the political crisis
 
  Following the sharp fall in prices, the Governme nt requested the European Union to finance a 
study to identify the urgent measures that needed to be taken.  These measures will counteract the 
impact of the crisis and create the conditions needed to revive the sector. 
 
 The following action needs to be taken under this component:   (a) Rehabilitation of mechanized cotton-growing;   (b) rehabilitation of tracks and engineering works (bridges and drainage, etc.) damaged 
by the conflict; 
  (c) recovery of minimal activity for research and quality control;   (d) payment of arrears to producers; 
 
 (e) support for producers and extension of the area under cotton and food crops;   (f) mechanism for reimbursement of unpaid input loans;  and   (g) special rehabilitation measures fo r cotton companies and cooperatives. 
 
Component 2:  Increasing the competitiveness and income of actors in the cotton sector
 
  This component will focus on the following activities:  
 (a) Evaluation of reforms in the cotton sector; 
  (b) improved access to inputs for producers, establishment of a price-control mechanism 
under which the risk is fairly divided among all actors in the sector; TN/AG/SCC/R/7 
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 (c) improving the quality and rate of ginning;   (d) enhancing the legal environment for cotton marketing;  
 (e) establishment of market mechanisms to  counteract fluctuations in global prices; 
  (f) grading, rehabilitation an d opening of rural tracks; 
  (g) mechanization of cotton production (support for animal-drawn cultivation); 
 
 (h) establishment of a statistical unit and strategic monitoring of the sector;  and   (i) adoption of measures to apply the WAEMU directives on the programme for 
competitiveness in the cotton sector. 
 
Component 3:  Building capacity for research, di ssemination and internalization of technological 
innovation  
  (a) Creation of a long-term research progra mme to provide technical innovation adapted 
to the expectations of those requesting support;  and 
 
 (b) enhancing the environment for support of producers.  Component 4:  Creation of a financing mech anism involving stakeholders in the sector
 
 
 (a) Creation of a development fund for the cotton sector in order, inter alia , to counteract 
the effects of fluctuations in global pri ces and the supply of means of production. 
 Component 5:  Building stakeholders' capacity
 
  This component involves the following: 
 
 (a) Reorganizing the cooperative movement in the cotton sector;   (b) training those responsible for cooperatives and cooperators; 
 
 (c) training cotton companies, State companies and umbrella companies in managing 
fluctuations in global prices;  and 
  (d) building capacity for negotiation and implementing trade decisions at the 
international level. 
 PART IV.  EXPECTED IMPACT 
 Globally, in the short term, this project is e xpected to overcome the downward trend in cotton 
production and to achieve output of 400,000 tonnes rapidly while at the same time improving the 
quality.  Another expected impact is to increase yi elds from 1.2 tonnes/hectare currently to 1.4 tonnes. 
 
 Lastly, in the medium and long-terms, the main  impact sought is to achieve a balance in the 
financial accounts of the sector, increase the reve nue of producers, as well as the competitiveness and 
productivity of stakeholders, in order to achieve be tter integration into regional and global markets. 
  TN/AG/SCC/R/7 
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 PART V.  FOLLOW-UP AND EVALUATION 
 A committee will be established with the particip ation of stakeholders in order to identify 
performance indicators for the policy and enable its evaluation.  
 
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