WORLD TRADE  
ORGANIZATION  TN/AG/SCC/W/41 
6 October 2005 
 
 (05-4507) 
Sub-Committee on Cotton  
  
IMPLEMENTATION OF THE DEVELOPMENT ASSISTANCE ASPECTS OF THE 
COTTON-RELATED DECISIONS IN THE 2004 JULY PACKAGE 
 
Item 2C:  Coherence Between Trade and Development Aspects:
 
Update on the Development Aspects of Cotton  
 
Sixth Meeting of the Sub-Committee on Cotton (28 September 2005) 
 
Secretariat Progress Report  
 
 
 
 
  
 
 
1. Under this standing item, the Secretariat has pr ovided three prior updates to the Membership.  
The base report was the substantive First Peri odic Report by the Director-General to the 
December 2004 General Council (WT/GC/83 and Add. 1).  The subsequent progress reports were 
provided on 22 March 2005 (TN/AG/SCC/W1), 29 April 2005 (TN/AG/SCC/W2) and 18 July 2005 (TN/AG/SCC/W/3).  These reports are be fore the Sub-Committee on Cotton (SCC). 
2. The updates to Members have been based on the information provided by Members and the 
relevant multilateral institutions, following four ro unds of consultations in the informal consultative 
process established by the Director-General to implement Council decisions on the development assistance aspects of cotton.  Since the last (4
th) round of informal consultations on 18 July, no further 
consultations have taken place.  The Secretariat inte nds to hold the next round of consultations before 
the 6th WTO Ministerial Conference. 
3. At today's meeting, the Secretariat would lik e to emphasise that there continues to be a 
positive evolution of results in the implementation pro cess.  Overall, there is real progress in respect 
of contributions by bilateral donors and contribu ting multilateral institutions, with indications of 
further advances.  These would be reported in th e next substantive report by the WTO Director-
General. 
4. Implementation of the decisions on the developm ent assistance aspects is work in progress, 
and needs to be deepened.  As an indicative su mmary, in the information provided by Members and 
relevant multilateral agencies, the range of technical  and financial assistance given, including actual 
cotton-specific projects underway, those planned,  and those requested, specifically cover: 
− Reflection of cotton sector priorities in b ilateral donor/multilateral agency programmes; 
                                                      
1 This document is an update to the First Periodic Report by the Director-General to the General 
Council, circulated under the symbol WT/GC/83, and subsequent updates in TN/AG/SCC/W/1, 
TN/AG/SCC/W/2 and TN/AG/SCC/W/3. 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/4 
Page 2  
 
 − Design of cotton-specific programmes/activities in  bilateral/multilateral agency programmes; 
− Debt relief/Increase in financial and aid flows
2;  and 
− Actual/Planned cotton sector-specific technical assistance activities cover: 
 Capacity building (seminars, conferences,  training, agricultural best practices); 
 Research/Skills and Technology transfer in areas such as ginning, cotton testing, 
labelling, grading and classing;  soil degradation, soil fertility improvement and management, bio-technology, bio-safety training, entomology, high yield, 
disease resistant transgenic cotton varieties; 
 Infrastructure (roads, railway systems, construction of training schools, etc); 
 Private sector development; 
 Cotton promotion and market search; 
 Regional strategy for policy and ins titutional support (WAEMU, ECOWAS); 
 Restructuring of producer associations; 
 Agricultural-linked projects (irrigation systems, rural development, etc); 
 Value-added projects and Chain Integr ation (e.g. textiles and clothing); 
 Fiscal/price support; 
 Market-based price risk and price stabilization instruments; 
 Poverty Reduction & Growth Facility (PRGF) augmentation.
3 
 
5. However, there are three areas where scope exis ts for further progress.  First, the need for 
increased coordination and enhanced partnerships at the level of bilateral donors, agencies and the 
proponents themselves.  Second, the need for th e proponents to formulate specific cotton sector 
priorities in keeping with the priority attached to co tton and as reflected in their priorities.  Third, the 
need to accelerate and deepen the on-going transf ormation from programmes and design of projects to 
actual operational projects. 
6. Since the last progress report, there have been several additional developments.  
• First , at the 64th Plenary Meeting of the Internationa l Cotton Advisory Committee (ICAC), the 
ICAC Secretariat on behalf of the Organiza tion, "offered" to contribute towards the 
implementation of the development assistance asp ects and to assist "financially stressed 
producers, particularly in Africa".  Identified areas of support were technology development;  
technology transfer to raise yields and lower costs, through more efficient application of inputs;  
improvements in access to yield-enhancing input s;  and, to encourage acceptance of new 
technologies, including biotechnology, by consum ers and governments.  The WTO Secretariat 
met bilaterally with the ICAC Executive Director to explore their offer and undertook to report 
this new opportunity to Members, which is hereby reported. 
• Second , the United Kingdom (on the platform of the EU Presidency) underlined a strong 
commitment for a successful Hong Kong Ministeria l meeting and overall Doha outcome and, in 
doing so, underscored the impor tance of progress on cotton.  This was followed-up with a 
formally circulated statement by the Repr esentative of the EU reporting on progress by the 
European Communities, inter alia , on the implementation of the de velopment assistance aspects 
of the cotton issue (and pointing to EU dom estic measures for progress on the trade aspects). 
                                                      
2 The point has been made about the fungibility of financial assistance and aid flows. 
3 Augmentation will be provided, if external financing requirements result from terms of trade shock 
(IMF contribution).  TN/AG/SCC/W/4 
 Page 3 
 
 
 • Third , information and data provided at the meeting by ICAC indicated the continuing long-term 
decline in global cotton prices, the continuing gl obal decrease in average revenue per hectare, in 
spite of recent demand growth for cotton, and the continuing decrease in  the market share for 
cotton relative to total fibre consumption.  Reports  at the meeting also indicated that, globally, 
producers were focusing efforts on the applicati on of improved technology, biotechnology, high 
yield disease resistant varieties to improve quality, efficiency and productivity.  ICAC is attentive 
to government measures that distort trade and gr owth in the cotton sector.  A specific report was 
circulated to the ICAC Plenar y, by the Chair, of the Working Group on Government Measures 
(WGGM). 
• Fourth , there are strong positive developments on Aid-for-Trade, as reflected in the recently 
adopted "Development Committee Communiqué", at the Development Committee in Washington, on 25 September.  The endorseme nt of the proposal, by the Development 
Committee, to enhance the Integrated Framework, including the expansion of its resources and, to 
make the IF more effective, is likely to provide  important new opportunities in areas identified as 
priorities by beneficiary members.  The Deve lopment Committee also welcomed the World 
Bank's ambitious Africa Action Plan. 
7. These updates for the Membership are not isolated.  The Secretariat progress reports on the 
implementation of the development assistance aspects  are linked.  It is work in progress.  The 
Director-General, inter alia , remains seized with the issue of cotton.  This was conveyed to the 
meeting of the Director-General with the proponents on 12 September 2005.  
 
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