RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/AG/SCC/R/8 
2 March 2006 
 (06-0900) 
Sub-Committee on Cotton  
 
 
 
 
SUMMARY REPORT ON THE EIGHTH MEETING OF THE SUB-COMMITTEE 
ON COTTON HELD ON 18 NOVEMBER 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 eighth mee ting on 18 November 2005 under the chairmanship of 
Ambassador Crawford Fa lconer of New Zealand. 
2. The agenda as contained in WTO/AIR/2714 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. Brazil stated its support, and that of the G- 20, for the position of African cotton-producing 
countries and for an outcome in Hong Kong which t ook account of the need for ambitious, rapid and 
specific solutions to the issue of cotton.  Brazil not ed that, whether at Ministerial or other levels, 
the G-20 had always stated its support for African cotton-producing countries.  Brazil pointed out that African cotton-producing countries had constantly re minded Members of the deteriorating situation in 
the region and of the need for measures to address  the problem.  In that regard, Brazil noted the 
European Communities' statement made to the Sub- Committee (JOB(05)/302, re fers).  Brazil did not 
wish to address the more general aspects of the European Communities statement which refered to the 
agriculture negotiation as a whole, as it still hoped fo r substantive results in Hong Kong which would 
provide space to work towards the most am bitious result possible for cotton as well. 
5. Brazil agreed with Benin that independently of progress or lack thereof in the overall 
agriculture negotiations, cotton had to be addressed in a manner which would be satisfactory to the 
cotton-producing countries in Africa.  Brazil noted that the same proposals presented to the meeting 
by Benin, on behalf of the "Cotton-4", had been tabled during the Senior Officials discussions which 
had recently taken place and Minister Amorim had then also supported the need for the urgent 
consideration of cotton and for specific measures in support of cotton-producing countries to be 
decided at Hong Kong.  Brazil added that since th e "Cotton-4" had now tabled concrete proposals, 
                                                     
 
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/8 
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  the Membership had the responsibility to take them  into account along with the concrete suggestions 
just made by the European Communities on how to address cotton in Hong Kong.  Brazil wished to 
hear from the rest of the Membership about ho w, through the Chairman, the Sub-Committee could 
come up with a text to be examined at the TN C and General Council levels  so as to obtain in 
Hong Kong a decision which reflected the commitmen t of the July 2004 Framework to address cotton 
in a rapid, specific and ambitious manner. 
6. Japan agreed that the success of the Hong Kong Ministeria l Conference depended largely on 
how cotton would be dealt with at the meeting.  Japan had no substantial pr oduction of cotton and did 
not provide domestic support nor expor t subsidies and its tariff rate for cotton was zero.  Hence, Japan 
was flexible on the trade aspects of cotton and, on the development side, w as committed to revitalize 
African economies in general, including in the ar ea of cotton production.  Japan informed Members 
that its aid to African countries would be doubled within  the next five years.  Japan was also trying to 
assist infrastructure building in cotton producing ar eas in Africa and had regularly reported on these 
activities to the various Rounds of consultations on  the development aspects of cotton chaired by 
Mr. Stuart Harbinson, the Special Adviser to the WTO's Director-General.  Japan, echoing previous 
speakers, also noted that in order to revitalize the economies of African cotton-producing countries, 
it was also important to meaningfully address the trade aspects of cotton, and that it looked forward to a substantial discussion of cotton at the Hong Kong Ministerial meeting. 
7. Reacting to Benin's description of the drama gripping African cotton-producing countries, 
Paraguay noted the similarity between the situation being experienced in Africa and that in Paraguay, 
a country for which cotton constituted an essentia l source of revenue.  The same poverty and 
difficulties for farmers and the same economic and so cial drama described by Benin were also taking 
place in Paraguay, with the fundamental problem fo r Paraguay being not just a low level of export 
diversification, but also its status as a land-lock ed country.  Hence, Paraguay welcomed all initiatives 
being presented in favour of cotton, incl uding the written proposal presented by the 
European Communities, which it would carefully cons ider with a view to finding a solution to the 
cotton problem. 
8. Paraguay, echoing previous dele gations, noted that the cotton issue should be approached 
from a broader perspective than that of merely seei ng how progress could be made in one or another 
pillar of the negotiations.  In Paraguay's view, a broa der perspective would lead Members to reflect on 
the consequences of unfavourable marketing conditions  for cotton and on the fact that efficient and 
competitive cotton-producing countries were victim s of other countries' subsidies.  Paraguay 
expressed the hope that all those barriers could be removed shortly and the we ll-being of populations 
restored, not only in Africa, but in other parts of the world also suffering from the cotton crisis. 
9. Burkina Faso associated itself w ith the statement made by Benin on behalf of the "Cotton-4", 
and also thanked all the partners who had repeated ly stated their support for the sectoral initiative in 
favour of cotton.  Burkina Faso would carefully analyse the statements made by the 
European Communities and the United States in partic ular at the meeting and, in the meantime, it 
wished to report that a consultative meeti ng between the United States and a number of 
African countries had been held in Ouagadougou, in preparation of Hong Kong. 
10. Burkina Faso, referring to a statement by th e Chair highlighting progress, said that this 
progress was timid and was only being made on paper.  Burkina Faso noted that if this eighth meeting 
of the Sub-Committee had been synonymous to eight  rounds of reductions on export subsidies or 
domestic support, this would have had real impacts on farmers' daily lives.  That was what farmers 
expected and Burkina Faso hoped that by the time of the Hong Kong conference, Members could 
agree on a language on specific progress which coul d be made with precise dates and figures.  
Burkina Faso hoped that Members would agree on a clear text prompting Ministers at Hong Kong to 
decide on specific measures in favour of African cotton growers.  Indeed, a lot of energy and 
manpower was invested in cotton, but unfortuna tely the economies of African cotton-producing  TN/AG/SCC/R/8 
 Page 3 
 
 
  countries were hamstrung by subsidies causing farmer s' income to shrink, with harmful knock-on 
effects on the income of many other people. 
11. The representative of Côte d'Ivoire noted his full support for the statement made by Benin 
and, in particular, mentioned that the meetings th at had been referred to by Benin, included the 
meeting of ACP stakeholders in the cotton sector, recently held in Lomé, which he had attended.  
Benin's passionate appeal at that meeting had been  echoed by all the stakeholders in the African 
cotton sector, whether from Central, East or Southern Africa.  Hence, Côte d'Ivoire wished, it too, to 
support that statement, and remind the different st akeholders that Africa had not just four cotton-
producing countries but 33 cotton-producing countries.   Côte d'Ivoire hoped that in the future, 
participation in such meetings c ould be broadened to encompass at l east individual regions or regional 
economic groups. 
12. Côte d'Ivoire also thanked the European Co mmunities for submitting its proposal in writing, 
and noted that it would comment on it shortly and also thanked Japan for its proposal not only to double its aid to developing countries over the next five years, but for planning to invest in African countries' infrastructures.  This proposal was particularly relevant to the concerns of 
Côte d'Ivoire where the cotton sector was in crisis and where the village trails for the collection of 
cotton had been completely destroyed and agricultura l research laboratories had all but disappeared.  
This had had a negative impact on output in Côte  d'Ivoire, which had fallen from an average of 
1.4 tonnes to less than one tonne today.  Côte d'I voire would further pursue the matter of development 
assistance with Japan regarding four projects it wished to submit to all donors. 
13. The representative of Mali thanked the Chairman fo r all the efforts he had made in connection 
with the cotton issue and for the report he had just  presented on the state of progress in the agriculture 
negotiations.  Like other Members, Mali noted very little progress in the area of agriculture, and more 
particularly on cotton.  Indeed, while a number of major WTO Members had made recent proposals in 
agriculture, those proposals did not specifically rela te to cotton.  Hence, Mali welcomed the proposal 
tabled at the meeting by the European Communities, in response to persistent requests by the four co-
sponsors of the cotton initiative, as well as all the ot her constructive statements or proposals that had 
been made at the meeting.  Mali also associated itself with the report given by Benin on behalf of the four co-sponsors of the cotton initiative.  Mali noted that, as stated by the re presentative of Cuba, the 
cotton issue was a matter of life or death for the p opulations of the countries concerned and reaffirmed 
the need to achieve concrete results in Hong Kong which went beyond mere promises and policy 
statements. 
14. The delegation of Guinea associated itself with the statements made by Benin on behalf of the 
four co-sponsors of the cotton initiative and by Egyp t on behalf of the African Group.  As had been 
elegantly stated by the Ambassador of Benin, and as had also been poi nted out by Guinea at previous 
meetings, the issue of cotton was not merely a commercial issue but also a social issue which 
concerned millions of people in Africa.  Concrete  proposals had been made on the issue of cotton, 
including in particular the most recent one, the N'Dj aména proposal just presented by Benin.  Guinea 
noted that it had also to be borne in mind that a practical solution to the cotton issue was to enable 
millions of people to have access to drinking water,  primary health care and education, and thus to 
alleviate poverty in accordance with  the targets set by the intern ational community for the coming 
years.  In concluding, Guinea thanked its partners for the various activities conducted in Africa on the 
cotton issue with a view to enablin g concrete solutions to be found.  Guinea wished to particularly 
thank the European Communities for the written pro posal it had submitted a the meeting and which it 
would examine carefully. 
15. The European Communities, reacting to a reference to ambition made by the Chairman, noted 
that references to expeditious and specific treat ment for cotton should be equated to an early 
implementation of whatever Members would decide  collectively.  The European Communities had 
suggested at various occasions that the best way to  do that was by frontloading for cotton what would TN/AG/SCC/R/8 
Page 4  
 
  be agreed in agriculture.  The European Communities did not see any real impediment to Ministers 
committing themselves in Hong Kong to a frontloading of implementation for cotton. 
16. Statements made by the following delegations  were forwarded to the Secretariat and are 
attached to this summary report:  Australia, Beni n, Chad, China, Cuba, Egypt, European Communities 
and the United States (see Annex 2).  At its request , the statement by the European Communities was 
also circulated as a Job document, JOB(05)/302, refers. 
I
TEM B:  COHERENCE BETWEEN TRADE AND DEVELOPMENT ASPECTS : UPDATE ON THE 
DEVELOPMENT ASPECTS  
17. 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 
18. On behalf of the Secretariat, Mr. Ch iedu Osakwe updated the Sub-Committee on the 
development aspects of cotton.  The statement made by  the Secretariat is attached to this report (see 
Annex 3). 
ii) Statements by Observer Internationa l Intergovernmental Organizations 
19. The statements made by the FAO and the World Bank are attached to this report (see 
Annex 3). 
iii) Statements by Members 
20. Benin thanked all the organizations and inte rnational agencies involved, as well as the 
bilateral donors.  Indeed, and as mentioned in its pr oposals, Benin considered the development aspect 
to be also important, however, the representative of Benin insisted on the fact that the most important 
aspect for the "Cotton-4" was and remained the trade aspect.  Benin welcomed the fact that 
Burkina Faso was now a beneficiary of the Millenni um Challenge Account (MCA) and noted its wish 
to see Chad also become a beneficiary, and to see the MCA extended to the other African countries 
concerned by the cotton problem. 
21. Benin also noted that it hoped that all the projects that had been announced on paper to 
become a reality.  Indeed, Benin recalled that it ha d asked the different countries concerned to inform 
the Sub-Committee on the status of the different acti ons announced at various meetings.  The replies 
from the different countries had reveal ed that in fact, very little had so far been done on the field.  
This was why Benin wished to appeal to all partners  to ensure that all of the projects and programmes 
that had been announced were actually being implem ented on the field, and that those projects and 
programmes provided effective relief to recipien t countries allowing them to produce more and 
extricate themselves from the cycle of deprivation and poverty. 
22. The representative of Côte d'Ivoire recalled that at the last meeting of the Sub-Committee on 
Cotton in October, Côte d'Ivoire had submitted a pa per which had been circulated to Members by the 
Secretariat.  Subsequently Côte D'Ivoire had been  asked to come up with specific projects relating to 
the post-crisis revival of the cotton sector in Côte d' Ivoire.  The representative of  Côte d'Ivoire noted 
that, consequently, following the meeting organized  in Lomé by the Commission on the ACP cotton 
sector, he had travelled to Abidjan where he had had numerous meetings with actors of the cotton 
sector and together they had come up with four s lightly more detailed proposals which Côte d'Ivoire 
intended to submit to the Secretariat for translati on, conversion of the values expressed in CFA francs 
into the reference currency, and circulation.  TN/AG/SCC/R/8 
 Page 5 
 
 
  23. The representative of Côte d'Ivoire noted that the four projects covered the rehabilitation of 
the agronomic research centre which, as mentione d earlier, had disappeared during the crisis causing 
the yield per hectare of cotton to decline.  The centre cumulated research on cotton and on the 
associated food crop production, since cotton farmer s also cultivated other subsistence crops.  The 
projects also dealt with the rehabilitation of the co tton track network, very much in line with the 
projects presented earlier by Japan for the rehab ilitation of infrastructure in some African cotton 
producing countries.  The projects submitted by Côte  d'Ivoire also covered assistance to producers 
with immediate arrival of payments at the input le vel, which had been complicated by the crisis and 
the inaccessibility of the destination areas.  And fi nally, there was a project on promoting usage of 
draught animals for cultivation. 
24. The representative of Côte d'Ivoire thanked the international, mu ltilateral and bilateral 
organizations and donors including the European Uni on, which had already visited Côte d'Ivoire in 
connection with the rehabilitation of the cotton sector, as well as the African Development Bank 
which, in cooperation with the FAO, had conducted a study on the subject.  Finally, the representative 
of Côte d'Ivoire also thanked all others who were willing to take th e time to examine the four projects 
in question which Côte d'Ivoire  would be submitting shortly. 
25. The delegation of Guinea thanked the Secretaria t for all the work it had done thus far, and 
congratulated Chiedu Osakwe for his concise report on the development aspects of the cotton issue.  
Guinea had taken note of the statements made by the FAO and the World Bank on the concrete 
measures taken in the four countries that co-s ponsored the Sectoral Initiative on Cotton and it hoped 
that the FAO, the World Bank and other institutions , as well as the bilateral partners, would extend 
those activities to other cotton producing countries such as Guinea. 
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  
Dates of the Next Meetings 
27. The Chairman announced that the first few meetings of the Sub-Committee for 2006 were 
tentatively scheduled for:  end of January , 28 February, 27 March, and 24 April. 
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/8 
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  Annex 1
 
 
Statement by Ambassador Crawford Falconer of New Zealand 
at the Eighth Meeting of the Sub-Committee on Cotton held on 18 November 2005 
 
 
Agenda Item 2(A):  Assessment of Progress in the Agriculture Special Session  
   As far as my own assessment is concerned, those of you who were present at the Committee 
on Agriculture, have heard what I said then and I do not really think there is anything materially 
different that I would add in the intervening peri od except maybe a bit of a minor update on timing.  
Having sat through the Heads of Delegation meeting, it was clear to me from that discussion that there 
had been a consensus within th e Membership that we would not be achieving full modalities for 
agriculture at Hong Kong and that being so, there was no intent for me as the Chair to prepare draft 
modalities for Hong Kong.  And in a meeting that we  had on agriculture, we covered that again and 
what I was seeking from Members was the guidance on what it was precisely that they felt the Chair 
should do in a situation where the chair's main job had been to prepare draft modalities in conjunction 
with the Membership.  And the view from delegatio ns from that meeting was that I should prepare a 
factual report on where we were on my own responsi bility and then that would be conveyed to the 
Chair of the TNC and that is what was agreed that I should do and that is what I am preparing right 
now. 
  In that discussion, I also foreshadowed that I do not want to do it completely in a vacuum, 
even though this is on my own responsibility and th at before I finalize it, I would share it with 
Members.  I used the rather pompous term "quality control" that meant to convey the idea that while 
I would be drafting it, I would make sure that I ha d your views and that if I have made any egregious 
errors or omissions that you would draw them to my  attention and that I woul d be able to do a better 
job accordingly.  And that is very much the spir it in which I intend to proceed and have been 
proceeding.  That being so, I would imagine that probably let's say early next week, I am not quite 
sure when that will be, Monday, Tuesday, I have to share with you where I've got to on that and then 
finalize it immediately thereafter, and dispatch it to the Chair of the TNC. 
 
 Now obviously, that is on my own responsibility.  It does not bind Members in anyway whatsoever and what becomes of that piece of paper is really a matter entirely for Members.  I would 
convey it to the Chair of the TNC and what anybody wishes to do with it as Members, is up to them.  
I do not, in preparing it on my own responsibility, assi gn to it any status whatsoever beyond that.  So 
it exists in that form and what happens thereafter is entirely for Members to determine via the TNC or 
any other formal consultations that Members have.   Now, obviously there is also what is technically  the draft ministerial declaration, that is not 
something I have to prepare, but something that Me mbers have to deal with and the relationship of 
what I produced to that is something that is in your hands and not in mine.  But obviously, I would 
hope that the document that I am preparing would be in such form that should Members wish to do so 
at some future point, they could draw upon it when it comes to attaching it to or relating it to whatever 
you determine is in the draft declaration.   I do not actually see what much more I can actually  say because my task at this stage is to try 
and capture, as best I can for you, where I think we  are and that includes and would include cotton.  
Now, having said all that, it was also clear from heads of delegation discussions and from the discussion that we had in the informal open-ended m eeting on agriculture that Members wish to stress 
that while there has been a reca libration in the jargon of the intent for Hong Kong, there was no 
recalibration in terms of the overall objective for the negotiations and that there was a will to continue  TN/AG/SCC/R/8 
 Page 7 
 
 
  negotiating in substance, and I certainly as Chair w ould want to encourage that and see that as having 
actually far more significance than fretting about a boring text of produced by the Chairman.   So I do think and I would underline that that clearly is an ongoing process and as far as cotton 
is concerned, that should remain the principle focu s of delegations' attenti on and one would certainly 
want to emphasize that between now and Hong K ong and at Hong Kong, one would hope to have 
strong convergence in substance towards the objectives th at have been laid out in the declaration in 
July, so that we can register the kind of progress th at I believe we need to register to achieve an 
outcome on agriculture more generally, but al so on this particular matter of cotton. 
 
 As I say, that being so, and I said this at  an informal heads of delegation meeting on 
agriculture, I am certainly ready to convene, assist, fa cilitate, etc, if it is delegations' wish to provide 
input on any part of the agriculture file and that in cludes on cotton.  So, as far as I am concerned what 
I have said before about Members being on call for substantive negotiations remains the case.  And 
I would be quite open to convening, facilitating furthe r work whether it is on cotton or on agriculture 
more generally all the way to Hong Kong.  But of  course, on that as on many other things I remain 
principally in your hands.    TN/AG/SCC/R/8 
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  Annex 2
 
 
Statements at the Eighth Meeting of the Sub-Committee on Cotton held on 18 November 2005 
  
Agenda Item 2(A):  Assessment of Progress in the Agriculture Special Session
 
 
 
Statement by Australia  
 
 
 Australia noted that continued progress on AMS product-specific caps would be an important 
overlay to the general reduction commitments for the sector – and supported the Uruguay Round 
implementation period being used as the base period.  
Australia said it was important to acknowledge the broader point that the objectives of the 
Sub-Committee were best served by an ambitious out come in the agriculture negotiations as a whole, 
including on market access.  TN/AG/SCC/R/8 
 Page 9 
 
 
  Statement by Benin  
   Mr. Chairman, Excellencies, Distinguish ed Delegates, Ladies and Gentlemen, 
 
 Mr. Chairman, I would like to thank you for the briefing you have just given on the status of 
the agriculture negotiations with Hong Kong only a few days away.   We are all aware of the urgent need to step up the pace of our negotiations.  
 Indeed, we need to make progress on the subs tance of our work and make proposals which 
take proper account of the pressing need to settle the problems facing the cotton sector in the African 
countries.   To that end, fully aware of the considerab le challenges facing the cotton production sector 
today, the Ministers of Trade of the co-sponsors of  the Sectoral Initiative on Cotton submitted, on 
9 November 2005 here in Geneva, through the Minist er of Commerce of Chad, proposals containing 
elements of modalities in connection with cotton.   These proposals were reaffirmed in Ouaga dougou on 10 November, and in N'Djaména on 
16 November, by the Ministers of Trade of the co -sponsors of the Sectoral Initiative on Cotton in the 
declaration they adopted and in their appeal for an urgent and appropriate settlement of the cotton 
issue.   These proposals involve:  
• The total elimination of export subsidies on cotton by 31 December 2005; 
 
• a substantial reduction in dom estic support measures that cause serious injury to the 
cotton trade, in accordance w ith the following timetable: 
 
- 80 per cent by 31 December 2006; - the following 10 per cent by 1 January 2008;  
- the remaining 10 per cent by 1 January 2009. 
 
• the formulation of disciplines for the prohibition of unauthorized support and for 
monitoring its conversion into authorized support; 
 
• the establishment of an emergency fund to offset deficits caused by falling cotton 
prices on the international market; 
 
• the mobilization of technical and financial assistance for the development of the 
cotton sector in Africa. 
  In view of the seriousness of the situation on the ground, the Ministers of the four countries 
reaffirmed that they would only be able to join a consensus in Hong Kong if the concerns of their 
countries and populations were effectively taken into account. 
 
 Indeed, the situation in our countries has de teriorated, resulting in large budget deficits 
because of diminished state revenue and in the inability of the population to pay for food, the 
education of their children, health and sustainable housing.  TN/AG/SCC/R/8 
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   The situation is similar in all of the Af rican cotton-producing countries, whose populations 
are suffering considerably from the disast rous economic and social consequences. 
  It is essential that between now and Hong Kong,  the decision taken at the end of July 2004 by 
the WTO General Council that cotton should be addr essed ambitiously, expeditiously and specifically 
should be implemented and reflected in the text of the declaration prepared for the Hong Kong 
conference.   Thank you.   TN/AG/SCC/R/8 
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  Statement by Chad  
   I would like to join other delegations in congratulating you on the way in which you chair the Cotton Sub-Committee. 
 
 I welcome the cooperative attitude and responses of  our various partners, and in particular the 
delegation of the European Union, which has just presented us with a written proposal in response to 
our own proposals.  We will, of course, analyze and assess the contents of that proposal.  
 My delegation commends the EU delegation that visited Ouagadougou and exchanged views 
with our authorities, for this step has broken down the barriers between us.   The US officials met with the producers, w ho were able to explain the problems they 
experience on a daily basis.  This was a very good in itiative.  As for the meeting held in N'Djamena, it 
not only brought together the four countries that co sponsored the Sectoral Initiative on Cotton but was 
also attended by Cameroon and the Central African Republic. 
  This shows that the cotton issue is of con cern to all the African countries, as we have 
consistently pointed out.  
 Thank you. 
 TN/AG/SCC/R/8 
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  Statement by China
 
   Thank you very much, Mr. Chairman.  Ch ina supports the statements made by the 
distinguished Ambassador of Brazil on behalf of G20.  We would like to thank the distinguished 
Ambassador of Benin for his introduction with fe elings.  We also share a lot of thoughts and 
sympathy expressed by our colleague from Cuba.   Mr. Chairman, China has always been attachi ng great importance to the cotton initiative.  Our 
President at the UN summit meeting announced a very comprehensive program for Africa, including 
debt write-off, economic aid, personnel training, and some other economic projects.  Cotton is an area 
that this program can cover.  Actually we have star ted to implement part of this program even before 
its announcement.  As the biggest importer of cotton,  we are ready to work with our colleagues from 
cotton producing countries in Africa to make every endeavor to facilitate the exports of their cotton 
into the China market. 
 
 From the multilateral side, we join others in hoping that a solution will be found as soon as 
possible, preferably by Hong Kong.    I thank you, Mr. Chairman.  
  TN/AG/SCC/R/8 
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  Statement by Cuba  
   Thank you Mr. Chairman.  
 As on previous occasions, my delegation supports the statem ent by the Ambassador of Benin 
on behalf of the sponsors of the Initiative in Favour of Cotton, as well as the statement by the Ambassador of Brazil on behalf of the G-20.   Cuba stresses the need to fulfill as rapidly as possible the mandate set forth in the July 
Package, which calls for an expeditious, specific, and ambitious solution to the Initiative in Favour of 
Cotton submitted by a group of African countries.   In this connection, we would like to revert  to the proposal submitted by the Minister of 
Commerce of Chad, which is perfectly in line with th at mandate, and request that it be incorporated in 
the Hong Kong declaration. 
  Mr. Chairman, for our delegation the mandate c ontained in the July Package for a specific, 
expeditious and ambitious solution, as called for on many occasions by a large number of WTO Members, and whose adoption is a matter of life or death for millions, is not something that can be the 
subject of conditions or exchanges with other issues  as has been suggested today by one delegation;  
nor do we understand how an ambitious, specific a nd expeditious approach can depend on progress in 
the market access pillar of the agri cultural negotiations in general. 
  Once again, we reiterate our support for th e demands of the sponsors of the Initiative in 
Favour of Cotton, and hope that the solution to th is problem will be incorporated in the Hong Kong 
Ministerial declaration. 
  Thank you Mr. Chairman.   TN/AG/SCC/R/8 
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  Statement by Egypt
 
   Mr. Chairman,  
 Egypt on behalf of the African Group wished to support the comments of Benin.  It shows 
that they are persistent to get a positive outcome in Hong Kong.   Needless to say, all the members understa nd the difficulties farmers are experiencing. 
 
 We believe the declaration of Chad presents a concise account of the suggested disciplines to 
be agreed.   The African group is of hope that these calls will be given the attention it deserves, in order to 
have substantive results in Hong Kong. 
 
 Thank you Mr. Chairman    TN/AG/SCC/R/8 
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  Statement by the European Communities  
  We wish to put forward some proposals on how the issue of Cotton should be addressed by Ministers 
at the Sixth WTO Ministerial Meeting in Hong Kong in December. 
 
Trade Aspects 
 
Although the EC reluctantly joined the consensu s among WTO Members that the objective of "full 
modalities" cannot now be achieved at Hong Kong, the trade dimension of the sectoral initiative on 
Cotton should still be addressed directly by Ministers.  The treatment of Cotton must take account of 
the general "re-calibration" of ambition for other area s of the agriculture negotiations:  this means in 
particular that Ministers cannot be expected to  take decisions on numbers that would pre-empt 
subsequent negotiations.  Ministers should, however, a dd to the July Framework.  In particular, they 
should put more flesh on the key elements of ambiti on, expedition and specific ity, which were already 
enshrined as the guiding principles for negotiators in the July Framework.  This will then help ensure 
that negotiations in the subsequent post-Hong K ong stage achieve the objectives set in the July 
Framework.  The EC considers that the following represents th e elements on what Ministers should agree in 
Hong Kong.  In the time left before the Ministeria l, these can be firmed up into appropriately clear 
language.  These proposals are without prejudice to the applicability of relevant Special and 
Differential Treatment provisions for Developi ng Countries and Least Developed Countries. 
 The EC approach builds on the contribution we have  already made, notably in EC statements at 
previous meetings of the Cotton Sub-Committee
2. 
 
The July Framework specifies that the trade asp ects of Cotton "will be addressed ambitiously, 
expeditiously, and specifically", within the fra mework of the agriculture negotiations.   
 "ambitiously"
 
 
While the general "re-calibration" of ambitions across-the-board for Hong Kong makes it impossible 
to be fully precise at this moment on the outcome of future negotiations, Mi nisters should nonetheless 
agree at Hong Kong that the results of the negotia tions on Cotton will be more  ambitious and farther 
reaching than those that will be achieved for the agri culture sector as a whole.  They should agree that 
this principle will apply in each  pillar of the negotiations.   
 
On market access, the basic Doha mandate is  for "substantial improvements"; under the July 
Framework, Members have agreed that this objectiv e will be achieved through a tiered formula.  In 
Hong Kong, Ministers should agree that for Cotton,  improvements in market access commitments will 
be significantly more substantial than would otherw ise be the case under whatever formula is to be 
negotiated. 
 
The EC is ready to commit to eliminate all duti es and quantitative restrictions on imports of cotton on 
an MFN basis, and from day one of the implementation period of the results of the Round.  
 
On domestic support, the Doha manda te is for "substantial reductions  in trade-distorting domestic 
support".  Under the July Framework, Members have  agreed that a tiered formula will be used to 
achieve this objective.  In Hong Kong, Ministers should agree that for Cotton, the negotiations will 
                                                      
2 See in particular the EC statements in meetings of the Cotton Sub-Committee on 29 April, 22 June, 
18 July and 28 September 2005 (all contained in the releva nt minutes TN/AG/SCC/R/3, /4, /5 and /6), as well as 
in the Sub-Committee meeting of 28 October 2005 (minutes not yet available). TN/AG/SCC/R/8 
Page 16  
 
  result in substantial reductions in the levels of  trade-distorting support for the sector and that 
remaining authorised supports for cotton will be fully subject to all relevant WTO disciplines, 
including those still to be negotiated in the Round.  
The EC is ready to commit to eliminate the most  trade-distorting domestic support for Cotton falling 
under the final bound total AMS and to accept to appl y all relevant disciplines applicable to domestic 
supports falling under the Blue Box, and from day one of the implementation period of the results of 
the Round.  
 
On export competition, WTO Members have already ag reed that the result of negotiations will be the 
parallel elimination of all forms of export subs idies and disciplines on all export measures with 
equivalent effect by a credible end date.  The e nd point for Cotton must be the same (elimination of 
all forms of export support), so under this pillar, the only manner in which to demonstrate ambition is 
through expedited implementation.  The EC is ready to commit to elim inate all forms of export subsidy on cotton, and from day one of the 
implementation period of the results of the Round.  
 
"expeditiously"
 
 In order to give effect to the notion of "expediti ously", Ministers should agreed in Hong Kong that 
implementation of the results on Cotton in all three pillars will be fast-tracked and front-loaded in 
comparison with the implementation schedule applicab le for other sectors covered by the agriculture 
negotiations.  Ministers should agree at Hong Kong that implementation of commitments on Cotton 
will begin on day one of implementation of the ov erall results of the DDA and that to the maximum 
extent possible, Members will ensure  that the major part of implementation is completed in year one 
and that any remaining implementation is complete d within a period to be determined that will 
nonetheless be shorter than the overall implementa tion period for the Member concerned for other 
agricultural products.  
The EC is ready to commit to implement all comm itments on Cotton, as indicated above, on day one 
of the implementation period for the results of the Doha negotiations.  Mo reover, on an autonomous 
basis, the EC is prepared to give an assur ance to cotton producer countries that all these 
commitments will already be in place, as  far as the EC is concerned, from 2006.  
 
"specifically"
 
 
The notion of "specifically" implies a specific, free-standing sectoral initiative for Cotton, to be 
negotiated as part of the overall negotiations on Ag riculture.  Ministers at Hong Kong should confirm 
that this is the intention.  By agreeing on the diffe rent elements proposed above, they will also give 
effect in practice to the notion of specificity. 
 
Development Aspects 
 
Ministers at Hong Kong should re-affirm the importance of action also to address the development aspects of the Cotton Initiative and take note of the report to be presented by the Secretariat on relevant developments in this respect.  Ministers should urge all parties engaged in the development 
assistance process in cotton producer countries – b ilateral donors, multilateral agencies and the 
beneficiary countries themselves – to maintain and intensify their efforts to ensure an adequate 
response to their needs.    TN/AG/SCC/R/8 
 Page 17 
 
 
  Statement by the United States  
   The United States is ready to work on a text th at reflects the July Framework commitment.  In 
particular it is looking at the mandate for cotton in the context of  the overall agriculture package.   
 
 We appreciated Benin's comments regardi ng Ambassador Portman and Secretary Johann's 
visit to Ouagadougou and their meeting with African mi nisters and the chance to see the situation first 
hand.    
 The US is pleased that Burkina Faso is now eligible for MCC funding and will put forward a 
development plan, including proposals for cotton.  Mali, Benin and Senegal are already eligible for 
MCC funding totalling about $200 million each.     On the trade side, our starting point is wh at can be achieved in the total package for 
agriculture and we need to make sure this averag e is high enough to ensure higher outcome for cotton. 
  Now we are having difficulties building a satis factory foundation for the overall negotiations 
on agriculture, especially in the area of market access,  and we have to see how we can build this up in 
order to do better for cotton.   
 The US approach in the first in stance is to focus on the big picture to make sure we set a high 
level of ambition and then proceed to address co tton "ambitiously, expeditiously and specifically". 
 TN/AG/SCC/R/8 
Page 18  
 
  Annex 3
 
 
Statements at the Eighth Meeting of the Sub-Committee on Cotton held on 18 November 2005 
 
 
Agenda Item 2(B):  Coherence Between Trade and Development Aspects:  
Update on the Development Aspects of Cotton  
 
 
Statement by the Secretariat  
 
 
 Thank you Chairman. 
  This is a brief progress report on Cotton Deve lopment Assistance.  At this stage of the 
process, the Secretariat only have a few brief points to underline.    
 First, on the provisional agenda of the December General Council which is actively 
circulated, there will be an item on the Developmen t Aspects of the Cotton Initiative.  Members will 
recall a similar item on the agenda of the 2004 Genera l Council.  The item will therefore be repeated. 
  Second, the Director General is presently preparing his Second Periodic Report to the 
Membership on the Development Assistance Aspects.  The Director General is carefully and directly 
evaluating all the announcements of contributions received in the Secretariat from bilateral-donors, 
multi-lateral and regional agencies.  The Second Peri odic Report will be circulated in advance of the 
December Council Meeting.   The Director General conveys his appreciati on to the development community (bilateral-
donors, multilateral and regional agencies) and to  the proponents for the advice provided in the 
Director General's Consultative Framework Process.   Regarding the Consultative Framework Process, 
the last round of consultations before the Hong K ong Ministerial meeting took place on 28 October.  
This is where we are at the moment.   
 Thank you Chairman. 
  TN/AG/SCC/R/8 
 Page 19 
 
 
  Statement by the FAO  
  
FAO/ADB collaborative programme on the cotton sector in the West and Central Africa region
 
  FAO would like to report progress in a collaborative programme with the African 
Development Bank (ADB) in the West and Central Africa region.   As we have reported in the past, the firs t phase of this collaborative programme was 
completed during the first half of 2005.  A preliminary diagnostic exercise was carried out in four 
countries of the region which identified a number of specific sub-programmes that improvements 
were required to support the cotton sector.   As a follow up to this diagnostic phase, th e ADB requested FAO's assistance to conduct a 
technical feasibility study on some of  the specific activities identified.   
 
 The aim of this second phase is the preparation of a multi-national programme which will elaborate in detail these activities, taking into account what is already on the ground and what new 
actions are required, based on changes in prioriti es in each country.  Synergies between current and 
planned activities will also be explored as well as  possibilities for co-financing by other funding 
agencies. 
 
 An FAO mission is now in the field, first in  Benin, to be followed by Chad, Mali and 
Burkina Faso.  The mission will conclude its field work in mid-February, to be followed by a 
workshop in March.  At the end of each field trip, the mission will discuss its findings with 
counterparts in Government and possible funding agencies. 
 
 The mission will finalise its Report in April 2006.  Implementation of activities under this 
programme is foreseen to begin at the end of 2006.   We will update this Committee in due course on developments in relation to this FAO/ADB 
collaborative programme. 
 TN/AG/SCC/R/8 
Page 20  
 
  Statement by the World Bank
 
  
1. Thank you, chairman. I am speaking on behalf of  Carlos Braga, senior advisor at the World 
Bank trade department, as he is currently traveling.  The World Bank appreciates this opportunity to 
inform on the Bank's recent programs and project de velopments.  We will focus in particular on the 
cotton-four. No doubt, the high dependence on cotton for Benin, Burkina Faso, Mali and Chad has important ramifications for poverty in these countries.  Beyond advocating for reform in cotton 
subsidies, the Bank and other partners are trying  to assist our clients in diminishing their 
vulnerability to cotton price fluctuations .  (It is worth noting that af ter reaching a low of US$ 1.07 
per kilogram in December 2004, cotton prices have rec overed slightly.  During the first two months of 
the 2005/06 season, they averaged US$ 1.20 per kilogram.[1]
)  First,  we are aiming at increasing their 
competitiveness  by helping them explore the desirability of biotech cotton; strengthening their 
research capacity and reinforcing their producer associations.  Second , we are urging a closer look at 
diversification  to other crops, including traditiona l cereals and cash crops.  Third , we are exploring 
the potential for protecting producers from risks through a combination of crop insurance and price 
risk management  instruments.  And finally , particularly in the "Cotton-4", we are seeking additional 
reforms of the structure of the cotton sector.  The Bank is coordinating its efforts closely with other 
donors and international agencies.  Some of our joint efforts were mentioned by the European 
Communities (EC) and the IMF.  The IMF also highlighted a feature of the important development communiqué (of 25 September) from the World Bank/IMF annual meetings. 
2. In Benin , the cotton sector is currently passing th rough a transitional phase to a liberalized 
structure.  In the 1990's, the government of Benin licensed several private ginners who now make up 
about 48 percent of the country's ginning capacity.  The National Company for Agricultural Promotion, called SONAPRA, owns the remaining 52 percent of the capacity.  The government has 
committed itself to privatize the ginning factori es of SONAPRA, and this process started in 2003. 
3. The World Bank has an ongoing Cotton Sector Reform Project (of US$ 18 million) that is 
aimed at facilitating the transition into a competitive sy stem in the cotton sector in Benin.  In practice, 
this means supporting the private sector operations  and institutional changes associated with the 
privatization of the ginning activities of SONAPRA.  On e activity of this project is the privatization of 
SONAPRA's gins.  The government of Benin has awar ded bids for three of four lots that were 
advertised and has committed to transfer the fact ories by the end of October 2005 from SONAPRA to 
the successful bidders. 
4. The reform process has met some serious ch allenges over the last two years with the 
emergence of a parallel circuit for commercialization of inputs and seed cotton.  The situation has led 
the Government to increase its in tervention in the sector for the 2004-2005 campaign, while working 
with the different actors on a revised institutiona l and regulatory framework that would improve the 
functioning of the sector.  A remaining task for the government is to ensure that the newly enacted 
regulatory framework is respected by all the actors involved in the cotton sector. 
5. In Burkina Faso,  the reform process continues to e volve positively.  SOFITEX, the cotton 
company, has divested from two producing areas wher e the assets have been sold to two new private 
investors, Rheinhart and Dagris respectively.  The World Bank is preparing a new Agricultural 
Diversification Project (proposed to be US$ 35 million) with the government of Burkina Faso, and it 
is seeking to collaborate with other donors in efforts to strengthen the sector and producer 
organizations. 
6. In Chad,  progress on cotton reforms has been somewhat  limited.  This is due to the fiscal 
difficulties of the para-statal cotton processing comp any Cotonchad, and the slow pace of action on 
the reforms by the government.  In 1999, the govern ment of Chad adopted a sector reform program.  
The objective of this was to improve the income of cotton farmers and enhance the efficiency of  TN/AG/SCC/R/8 
 Page 21 
 
 
  production.  This was set to be done through th e liberalization of Cotonchad and support to the 
development of strong cotton producer organizations. 
7. The Bank has supported a number of activities  to move forward the reform in Chad.  
These include a technical and financial audit of Co tonchad; analysis of alternative scenarios for 
privatization of Cotonchad; the preparation of a first stage of ex-ante poverty and social impact 
analysis; and an investor forum to discuss invest or interest in the sector.  Two years ago, the 
government of Chad started studying two potential scenarios for the privatization of Cotonchad.  
These are (i) the floating and sale of shares of Co tonchad; or (ii) the sale of the assets (mainly 
industrial and transport equipment and buildings) of  Cotonchad.  At the request of the government, 
the World Bank was one of the donors that took part in a mission to prepare a "Roadmap" on steps 
necessary for the eventual disengagement of Gove rnment from the sector.  Following the mission the 
Bank has programmed a Cotton Sector Reform Project  (proposed to be US$ 15 million) for 
FY06/07 to support Government if and when the d ecision is taken to move ahead.  Developments 
over the last several weeks have been encouraging as the government of Chad seems to be moving on 
the reform and implementation of the road map. 
8. In Mali , the government has decided to postpone th e privatization of the para-statal cotton 
company.  The Bank has, however, recently approved an Agricultural Competitiveness and 
Diversification Project ( US$ 46.4 million) with the government of Mali which focuses on cotton and 
diversification of crops.  The Fren ch development agency is working with the producers organizations 
to build their capacity, and we are coordinating our efforts with them. 
9. In addition to these country specific programs , a number of proposals for price risk 
management mechanisms for cotton producers are being explored by the Bank and our partners.  
These can be divided into four basic approaches: (1) efforts to increase the use of international 
instruments to hedge short-term price risk; (2 ) national price risk management mechanisms; 
(3) regional price risk management mechanisms; a nd (4) crop and weather insurance.  Finally, the 
Bank is working with The Global Environmental Facility (GEF) to prepare a regional program in 
biosafety which will help these four countries and Se negal to prepare a framework for evaluating and 
in some cases, testing, genetically modified crops .  In addition to our client countries, we will be 
working with both the US government and the Agen ce française de développement (AFD) in this 
regard. 
10. Thank you for your attention. 
 
[1] "Cotton prices" refer to the Cotlook A Index.  The recovery reflects lower expectations for the 2005/06 
output, estimated at about 24.1 million tons (down from la st season's record 26.2 million) according to a recent 
survey by the International Cotton Advisory Committee. 
 
 
__________