RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/AG/SCC/R/5 
22 September 2005  
 (05-4204) 
Sub-Committee on Cotton  
 
 
 
 
SUMMARY REPORT ON THE FIFTH MEETING OF THE SUB-COMMITTEE 
ON COTTON HELD ON 18 JULY 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 fifth meeti ng on 18 July 2005 under the chairmanship of 
Mr. Tim Groser. 
2. The agenda as contained in WTO/AIR/2620 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 Kenya thanked the Chair for his assessment and enquired about the 
issue of Domestic Support and the progress made in  the negotiations as a whole.  Although Kenya 
agreed that Members had to look at progress in the entire negotiations, when looking at cotton, 
special attention had to be given in the Sub-Comm ittee to the issue of product-specific reductions. 
5. The Kenyan delegate also expressed her frustra tions in the up-dates provided by the Chairman 
to the Sub-Committee on Cotton which seemed to be repetitive.  She urged the chairman to 
incorporate specific consultations on cotton while consulting members on the three pillars of the 
negotiations.  This would enable the chairman  to report specifically on progress on the cotton 
initiative within the overall agriculture negotiations. 
6. The European Communities, recalling the Chair' s assessment that Members would have to 
continue and intensify their work in the upcoming weeks through an incremental approach, noted that, 
while probably the only way to proceed, an incremental approach al so had to be balanced between the 
three pillars of Market Access,  Domestic Support and Export Competition.  Furthermore it was 
obvious to the European Communities that there ha d to be some parallelism between the progress 
made in Agriculture and the progress made in NA MA and elsewhere.  The European Communities 
also noted that it had no difficulty including cotton in the incremental approach to be followed and 
that it was ready to discuss every aspect of the three pillars in th e Sub-Committee or in the Committee 
                                                      
1 This document has been prepared under the Secretaria t's own responsibility and is without prejudice to the 
positions of Members or to their ri ghts or obligations under the WTO. TN/AG/SCC/R/5 
Page 2  
 
 on Agriculture, in order to try and keep the promise made in July last year to find an expeditious, 
specific and ambitious outcome for cotton. 
7. The representative of the European Communiti es also thanked Benin and Mali for their 
comments and noted that the European Communities had reacted very specifically to the proposals 
put forward by the African Group, firstly thr ough Peter Mandelson's speech in Bamako and also 
through the European Communities' intervention during the April meeting of the Sub-Committee 
when the African Group proposal had been first put  forward.  The European Communities' reaction 
had been very specific because there had been a proposal on the table and, in the European 
Communities' view, any statement by an Ambassador  and Head of Delegation during a meeting of a 
formal Committee was the same as a written submi ssion.  The European Communities restated its 
position and noted that it was ready to undertake a cer tain amount of "front-loading" with regard to 
the implementation of each of the three pillars.  In  other words, it was prepared, from day one of the 
implementation of the Doha Round agreements, in a multilateral and binding fashion, to grant all 
Members, over time, "duty and quota free access" .  The European Communities had already done so 
for a few years but would now make binding commitm ents in that regard.  Secondly, from the first 
day, within the framework of the multilateral ag reements and thus within the framework of the 
schedules of each Member, the European Communities was prepared to accept the elimination of all 
export subsidies and a substantial reducti on in all "trade-distorting support".  
8. The representative of the European Communities st ated that, therefore, compared with any 
other product in the agriculture negotiations, the proposal on the part of the European Communities 
on cotton was wholly specific, highly ambitious a nd entirely expeditious.  Secondly, and this had 
already been pointed out to the cotton-producing c ountries, a distinction existed between what was 
possible with regard to autonomous implemen tation and what came out of the multilateral 
commitments.  The European Communities had, on its own initiative, already taken a number of 
autonomous measures regarding trade and domestic  support in the case of cotton.  On the 
development aspects, the European Union, through its Cotton Initiative, had immediately taken stock 
of the problems facing cotton-producing countries a nd had entered into an intensive dialogue with 
cotton producers.  There was no lack of commitment  on the part of the countries of the European 
Union, however, the issue at hand was that of trade and the three pillars. 
9. The representative of Chad firmly endorsed the statement by Benin and added that, while in 
his assessment the Chairman linked the fate of cott on to the outcome of the agriculture negotiations, 
unless cotton was treated ambitiously, expeditiously and specifically, it ran the risk of disappearing 
from the economies of most African countries.  As  their income continued to dwindle, producers 
would be tempted to seek a better living in towns, where they would only swell the already crowded 
ranks of the unemployed.  Therefore, what cott on-producing countries wanted was an end to trade-
distorting policies to give producers the chance of a decent living from the fruits of their soils.  
10. The representative of Côte  d'Ivoire recalled the centrality of development in the Doha 
Development Agenda and wondered for whom w as this development meant, how would it be 
achieved and when?  Would this development ta ke place when cotton-producing countries would 
have disappeared from the world economy and trad ing system?  Was this development meant for 
developed countries or rather for those countries, such as Côte  d'Ivoire, which needed to be 
developed?  The representative of Côte  d'Ivoire referred to the exampl e given by Chad and noted that 
as an average-size agricultural producer in West Africa, Côte
 d'Ivoire too had seen many of its 
farmers abandon the production of coff ee when coffee prices declined.  Côte  d'Ivoire had already lost 
the monopoly it had on rice production in West Africa for exactly the same reasons and now more than 50 per cent of its rice consumption came from imports.  TN/AG/SCC/R/5 
 Page 3 
 
 
 11. The representative of Côte  d'Ivoire further noted that, while the July framework clearly called 
for the cotton issue to be addressed ambitiously, expeditiously and specifically, still no significant 
development could be reported after already five meetings of the Sub-Committee.  Côte  d'Ivoire 
welcomed the fact that many African countries had now endorsed the Sectoral Initiative on Cotton 
tabled by the four West and Central African  cotton producers.  The representative of Côte  d'Ivoire 
also welcomed the position that had just been e xpressed by the European Communities and the paper 
circulated by the United States regarding the Un ited States government decision on cotton and called 
for direct consultations to be organized. 
12. Statements made by the following delegations  were forwarded to the Secretariat and are 
attached to this summary report:  Benin, Braz il, Mali, the United States, and Zimbabwe (see 
Annex 2). 
ITEM B:  COHERENCE BETWEEN TRADE AND DEVELOPMENT ASPECTS : UPDATE ON THE 
DEVELOPMENT ASPECTS  
13. 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 
14. On behalf of the Secretariat, Mr. Chiedu Osakwe updated the Sub-Committee on the Fourth 
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 
FAO, the IMF, ITC and UNIDO. 
15. The statement made by the Secretariat has been circulated as document TN/AG/SCC/W/3 and 
is also attached to this report (see Annex 3). 
ii) Statements by Observer Internationa l Intergovernmental Organizations 
16. There were no statements by Observer Inte rnational Intergovernmental Organizations. 
iii) Statements by Members 
17. The statement made by Benin is att ached to this report (see Annex 3). 
18. 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. 
19. 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. 
I
TEM C:  OTHER BUSINESS  
Dates of the Next Meetings 
20. The next meetings of the Sub-Committee after the Summer break were tentatively scheduled 
for:  30 September, 28 October and 14 November. TN/AG/SCC/R/5 
Page 4  
 
 Chairman's Report to the Special S ession of the Committee on Agriculture 
21. 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/5 
 Page 5 
 
 
 Annex 1  
 
Statement by Tim Groser 
at the Fifth Meeting of the Sub-Committee on Cotton held on 18 July 2005 
 
 
Agenda Item 2(A):  Assessment of Progress in the Agriculture Special Session  
   Now, the first order of business today is an assessment of progress in the agriculture 
negotiations with a particular focus of course on co tton and perhaps it would be helpful if I spoke in 
Italian "pronto" to give you my assessment.    Well, in a sense, you have it.  I am referring to  the assessment I gave on 27 June, and I have 
not fundamentally changed my views.  There have  been some helpful "critique" made by different 
Members.  But I do not think those changes I would make now are of such order of importance that 
would lead me to wish to revise in any radical way this assessment.   The key points were that we have been moving obviously too slowly.  I said it formally in the assessment but I certainly said it at the end of the agriculture meeting when taking account of, frankly, limited guidance that I received from the Membership  towards that assessment at the end of the last 
agriculture week.  I made it quite clear that in my  opinion, unless there was some radical shift in the 
nature of our discussions to the end of July, it was no longer realistic  for me to proceed with what I 
had suggested in last December namely a first a pproximation of full modalities.  I do not think we 
need to invent a new term for what we are shooting for, but I did make it clear at the time, those of 
you who were in the room would recall, that while the term "a first approximation of full modalities" 
obviously is a flexible term and one could have a nice argument about what one might reasonably call 
the first approximation of full modalities, I was not prepared to teach you the English language and 
quite possibly the other two official languages by pretending that we were in a position to do any 
justice to that concept.  I think in principle what  I would have been looking for is far more orderly 
progress right across the range of issues in agricultu re before putting out essentially a draft version of 
modalities at least on crucial points.  Now, we are not there.  But as you know, I think it is extremely 
important that everybody focuses their efforts fo r the remaining two weeks in the agriculture 
negotiations to try and ensure that we end up, afte r twelve months from the successful adoption of the 
framework, with solid and tangible results on some ke y issues that are considered to be essential to 
moving forward.  
 The second key point I have made, and very e xplicitly in that assessment, was my personal 
conviction that there was no alternative to an in cremental approach.  I do understand the problem 
delegations have, of course, with an incremental approach because each Member has some differing 
priorities in terms of, you know, "their" priorities and, of course, there is  a very understandable 
nervousness on the part of the Membership that if you do not advance the negotiation in the area with 
a very particular sensitivity to you, and I am convin ced sensitivity is much on the export side as on the 
import side of agriculture, you feel there is an imba lance being built into the process.  But my view is 
that that strategy of an incremental approach rath er than trying to arrive immediately at the whole 
package is unfortunately the only way through.  It does involve some risk.  That is where you have to have some confidence in the integrity of the pr ocess that an issue of vital concern to you and 
Members in similar position will not fall of the back of a truck.  If we can't advance it, and I used as 
an example the issue of the fullest liberalization of  tropical products, in the intensive consultations I 
held, it was manifestly clear, because it was expressed  by delegations with very different substantive 
positions on this matter, that it was impossible, litera lly impossible, to advance in any serious way the 
elaboration of what might be the most appropriate way of delivering on this commitment of the fullest 
liberalization of tropical products until some shape of a Market Access formula came into view.  I 
happen to choose that example.  I could have chos en a number of other examples that for individual TN/AG/SCC/R/5 
Page 6  
 
 Members around this room are extremely important to  them.  So I am asking for, on the one hand, a 
sense of realism on the part of the Membership, that we won't even get to your issue if we try and 
resolve everything together and I think we have identified now some key issues.  I, of course, like many of you, went to the informal ministerial meeting in China, in Dalian.  Well, some are 
disappointed in the results.  I choose deliberately to take a positive view of it.  I appreciate that this 
meeting did not have formal decision making powers.   But most of the Membership was represented 
in one way or another through group leaders through countries with similar perspectives.  There was a 
good debate and the idea of moving forward on an in cremental basis was adopted by those Ministers 
who were present.  That gives us a solid body of convergence I think now to move forward on the 
way that I proposed in the assessment. 
 
 The second thing that has emerged, and I will be  a little more diplomatic, a little more delicate 
here in talking about this, has been a very clear  sense of a couple of issues and some negotiating 
linkages between them. If anyone want s to have a private discussion with me on this, I am more than 
happy to give you the benefit of my personal views on  what the linkages are.  I have always held the 
view that in a negotiation, the key to blockages is in fact to create some negotiating linkages internal 
to the dossier.  That is the main way to advance.   So I think we have got the beginnings of some 
positive progress out of the Dalian meeting.  That is my perspective.  I know people wanted more.  
But I think we have got something and I would add as  a personal observation, of course, that my sense 
of the atmospherics in Dalian were that the Ministers do not want everything to be put on their plate in 
Hong-Kong.  They are expecting you and other coll eagues to take your own responsibilities in the two 
weeks that remain to ensure that  we get something agreed that pr ovides a basis for moving forward.  
Now I will continue in the agriculture negotiations to try and get progress in the next two weeks on all 
three pillars.  I think, as I have said consisten tly, I understand those countries that have advocated 
parallelism given the conditional offer on export s ubsidies understandably and quite properly want to 
be sure that the conditions underlying that offer are adequately fulfilled.  I think you have been 
making reasonable progress, but I want to fill a couple of gaps, if we can, in that area so that we can 
say with some plausibility that we have con tinued to make good progress on the export competition 
pillar.   But quite clearly the pillar that is most in n eed of some definition remains Market Access.  
The four points that I put down in the paper, which I do not have in front of me, suggest that we need 
it to advance by taking account of all of these four points.  But I think that the nature of the formula 
within the market access package is  the right entry point into it, although it won't be enough.  It won't 
be enough because of the sensitivities involved in amongs t the importers and we need to advance and 
elaborate the understanding there with  respect to trade-distorting support.   I have got clear signals that 
we should focus on the cuts and
 the disciplines, I will not elaborate on that, but that to me is the order 
of business for the next two weeks. 
  Now if you want a result, we are going to have to essentially trust the process up to a certain point.  You are going to have to allow an intens ive negotiation and for me to make some personal 
decisions about how I consult with the Membership .  I have only got a rough schema in my mind.  
But it is quite clear that I need to shift gear and I need to have the cooperation of the delegates.  
Otherwise I can guaranty you failure. 
  Now coming to cotton, I ended, and I began I think shortly after the introductory comments in my assessment, indeed with cotton.  It is absolu tely clear that on the trade track we have this 
commitment for:  an ambitious, specific and expe ditious result on cotton.  We need to give the 
proponent countries and those other many delega tions that support them, confidence that the 
agriculture negotiation is moving forward.  So if yo u like, the cotton issue is sort of like some litmus 
test, a political litmus test in my opinion, for the agriculture negotiations.  If the agriculture 
negotiations are completely blocked, then how can we  turn to the Membership and say that we were 
fulfilling the mandate.  Quite clearly the deal is that  the trade aspects are being negotiated within the 
agriculture negotiation.  This is not going to change, but I see that the work of this Sub-committee in  TN/AG/SCC/R/5 
 Page 7 
 
 
 terms of the trade track has been a very important input into that negotiation and also a test of its 
integrity because, as I have said on many occasion, I cannot see how you can complete the Doha Development Agenda without substa ntial reform on the cotton dossier - not just the cotton dossier but 
this is, if you like, a test case and we have take n the decision to isolate cotton as a special priority 
issue and that is how we intend to proceed.  So, if  we are to get something on the trade track for 
cotton, it comes back full circle to getting some thing within the Framework of the agriculture 
negotiations proper.  Now, that is my assessment of the state of the negotiations.  Traditionally, 
people in this group have been a little reluctant to deal deeply into an assess ment of the agriculture 
negotiations but I certainly open the floor for any comments.  
Concluding Remarks
 
  Normally I would wait until the end of the meeting before making some comments, but I think perhaps on this occasion I might depart from my normal practice, just make a few comments.  
First please be aware of the danger of the old strate gy of leave everything to the Ministers.  You know 
what would happen, Ladies and Gentlemen.  Now,  from the discussion, and quite clearly to use 
another of your phrases, what we need to avoid is " une langue de bois" in the next two weeks.  This 
has to end.  We have to make some progress here.  Before we can start to begin to see how a package 
here might be able to be adjusted here and ther e to meet the demands of the specific mandate on 
cotton.  And I also took very careful note of the comment made by Mali that "We are not asking for the impossible".  I think there is  a clear message from African countries that have spoken today and as 
in the past of toughness but not unreasonable, not un reasonableness.  I do not think they are asking for 
the politically impossible but they are asking for some progress.     Now, I do want to thank the United States fo r its statement and I am very pleased that, 
although Brazil, and I am sure with the support of  other countries, is understandably reserving its 
position on the question of whether the steps constitute  full implementation of the panel – it is not for 
me to make any judgement whatsoev er.  I just simply note in the United States statement the phrase 
"we have taken significant steps...".  I just noted it .  But I am very please that Brazil has helped this 
negotiation by welcoming these as steps in the right di rection.  So, we are making some progress here.  
I have to reinforce this message and I can't help to  think when I look through this statement made by 
our colleague from the United States that there are some very obvious inter-linkages here with the 
informal discussions in the agriculture negotiati ons properly the clear linkage to long-term export 
credits, the decision taken to eliminate long-term e xport credits in principle.  Okay, something is 
moving on cotton in this direction,  but we will have to await for  the final conclusion of successful 
negotiations.  So, you know, in the real world they do not understand the difference between the 
judicial process which is on cotton, the work of the cotton Sub-Committee in the agriculture 
Committee and the development track.  All they see is a general issue but even if we have to respect 
some limits I think we can see some signs of some progress but still not enough and we do need to advance the agriculture negotiations fo r the reasons I stated at length. 
  With respect to the Communities interventi on, I thought it was also a very helpful 
intervention, it is not for me to comment on the issue of balance because I think your comments are 
wider than just agriculture and I fully note that a nd the importance of that to you.  I do however want 
to underline one important point that Ambassador Troj an made.  This is something for later for you to 
reflect on, not at this stage in the negotiation.  Th e underlining point that he was making if he would 
allow me to draw it out is that we negotiate here really minimum legal obliga tions and there is nothing 
to stop, understandings or even specific agreements  being taken between part ners which go further 
than their minimum obligations and I suspect, giving  the tendency of the lowest common denominator 
to apply, this could become very important not ju st in cotton but particularly in cotton, as a way 
through which to get balance at the end of this nego tiation.  This is not an argument for not to try and 
to do the most we can but you should be aware that at the end of every negotiation, there is a political 
need to enrich the result and there are techniqu es that lie behind the Communities intervention that 
people should bear in mind because they  can make a positive contribution. TN/AG/SCC/R/5 
Page 8  
 
  Now, finally, I want to just comment on the point our colleague from Zimbabwe made and it 
is an introduction to our next agenda item which  lo oks at the development assistance.  First of all, for 
those of you who are not aware, let me spell out the point our colleague from Zimbabwe made, when 
the reference was made to the importance of cotton of Zimbabwe.  This is not something that is 
divisive within Africa.  What we know is the fo llowing:  1)  Any trade reform which is achieve 
through this negotiation is going to be on an MFN basis, all results and reforms will benefit all 
countries producing cotton on a non-subsidized basis,  this is clear.  So this is not part of our 
negotiation that is somehow specially favouring the West and Central African countries.  All countries 
will benefit from this, this is clear.  Equally, I would assume that the types of steps to be taken in the 
judicial track are going to be implemented in a way that will help all the countries, not just the West 
and Central Africans.  And when it comes to developm ent assistances, I think it is already clear as the 
linkage slowly starts to work here between the political process and getting development agencies to 
focus on the particular needs of cotton, you can see quite clearly that although the West and Central 
African have a particular problem because 90 per cent of their cotton is sold on the world market, the sorts of program such as the EU-Africa Cotton partne rship are extended to all countries in Africa.  So 
I think you know we can move beyond this argum ent.  One could well understand the sensitivities in 
the developing world on this point but I think that simple analysis shows that while still these people 
in West and Central Africa have this particular  susceptibility because they leave in a world market 
that this is not a divisive thing and I think we can  really move beyond it.  So I really think our 
colleague from Zimbabwe made an important point.  I have heard Uganda made this before and they 
have told me privately and possibly in meetings they  wish to revive their cotton sector if we get some 
more stable trading environment. 
  Okay, I thank you very much for those who have  spoken. I think this is important by the way 
that the absence of debate is not taken in a negativ e way here, at least at one level of the process is 
starting to work politically.  This is quite clear to  me that this sectoral initiative has, although it has 
been slow and painful, at least started to get things moving  in different programmes work on cotton 
and attacking a number of development issues.  I guess my only concern is the speed which this is 
aligned with what is quite clearly an immediate s hort-term problem.  I mean I am not criticizing the 
development assistance agencies involved when I sa y this because I understand the proper procedures 
to have to go through but, I suppose what I am sayi ng here is that the words that we have adopted 
related to expeditious treatment clearly, the deve lopment assistance projects show a clear trend to 
accelerate attention on this.  So we are seeing something beginning to move.  The question of time is 
the thing that worries me.    
  TN/AG/SCC/R/5 
 Page 9 
 
 
 Annex 2  
 
Statements at the Fifth Meeting of the Sub-Committee on Cotton held on 18 July 2005 
  
Agenda Item 2(A):  Assessment of Progress in the Agriculture Special Session
 
 
 
Statement by Benin  
 
 
Mr. Chairman, Distinguished delegates,   And so we meet again, here at the fifth meeting of the Sub-Committee on Cotton. 
 
 The work programme of the Sub-Committee on Cotton stipulates that we should "work in depth on all trade-distorting policies affecting the sect or in all three pillars of market access, domestic 
support and export competition" and that such a ta sk should include an assessment of the progress 
made in the agriculture negotiations.  
 Negotiations held since the last meeting of  the Sub-Committee on Cotton include those which 
took place during Agriculture Week, the informal Room F discussions and bilateral informal consultations.   It would therefore be appropriate, in accord ance with the aforementioned work programme, to 
examine progress on the cotton issue, especially si nce we agreed in the July 2004 framework 
agreement to deal with this issue amb itiously, expeditiously and specifically. 
 Mr. Chairman,    I fully agree with the comments you have just made. 
 
 At our previous meeting, the four co-sponsor s of the Sectoral Initiative in Favour of Cotton 
emphasized the need to move forward and achieve concre te results.  To this end, we urged all parties 
to move on from speeches and statements of intent to specific written proposals.  
 I would like to remind those present that within the framework of the July first 
approximations, the African Group, in accordance  with the ambition agreed on, proposed the 
modalities submitted on 29 April.  As members of the African Group, we continue to believe in our 
shared ambition and the achievement of first approximati ons by the end of July, and it is in this spirit 
that we submitted that document.  We therefor e still hope to receive written reactions from our 
partners, and I say this on the strength of what I saw and heard in Dalian.  As you reminded us, 
Mr. Chairman, and as I remember, the atmosphere in Dalian, even though no concrete results were 
achieved, was good and healthy;  participants were urged not to become discouraged or to lose the 
sense of ambition which had marked the July 2004 Fr amework.  They were urged to maintain the 
same level of ambition in order to achieve the firs t approximations that we all wanted by the end of 
July.  I believe that in Dalian, all countries affirmed  and reaffirmed that they would give their Geneva-
based delegations strict instructions so that we w ould be able to achieve ambitious results in the two 
weeks to come.  Today, in this very room, I am  therefore waiting, and the African countries are 
waiting, for a strong political sign from most of our Northern partners that will tell us whether the call made in Dalian has really been heard.  As I have said before, we  cannot continue to run the risk of the 
African countries being the ones most often to subm it written proposals, while the Northern countries, TN/AG/SCC/R/5 
Page 10  
 
 with their heritage of writing, only give speeches wi thout putting pen to paper.  We want to see words 
on paper.  We want to see written proposals;  onl y then can we move to the negotiating table. 
  That said, Mr. Chairman, what concrete, written response have we had from Members from 
whom we seek a real contribution to the negotiations? 
 
 Only the Chairman of the Committee on Agri culture has brought out a status report, dated 
27 June 2005 and entitled "Agriculture  Negotiations – Status Report:  Key Issues to be Addressed by 
31 July 2005" (Job(05)/126).  In that paper, Mr. Chairman, you addressed the issue of cotton. 
 
 However, close scrutiny of the paper reveals th at the references to cotton did not take into 
account any responses from Members to the problems ra ised by the Sectoral Initiative in Favour of 
Cotton.   The paper focuses far more on the importance of  the issue and the need to achieve results. 
 
 Not to mince words, the current state of pl ay amounts to an absence of all meaningful 
progress.   Indeed, we have not moved forward at all.  No  progress has been made on this issue.  On the 
contrary, on the ground the social plight of our cotton farmers has worsened. 
 
 In your assessment, you say that, "if we do not
 reach convergence on key points in each of the 
three pillars by 31 July within  the agriculture negotiations generally, it will become increasingly 
difficult to fulfil the specific mandate for the work  of the Cotton Sub-Committee, with the Hong Kong 
meeting only round the corner". 
 
Mr. Chairman,   I would also like to remind those present of a meeting held in Maputo at the end of June, 
which I attended together with a colleague here presen t.  As I said this morning, agricultural workers 
and cotton farmers from all over Southern and East ern Africa gathered together in Maputo and 
declared themselves to be actively in favour of the Sectoral Initiative in Favour of Cotton.  The 
Hong Kong meeting will not take place therefore w ithout Africa, without the 33 or more African 
countries that are producers and net exporters of cott on.  Africa's voice may only have been a whisper 
in Cancún, but in Hong Kong I believe  it will be as loud as thunder.  This  is a serious warning.  Africa 
can no longer be excluded from international trad e and African countries believe that they will 
continue growing cotton.  They will not accept being eliminated from the cotton issue.  They want to 
continue growing cotton.  We dare to believe that  so far there has been no plot to eliminate Africa 
from the cotton issue.   Mr. Chairman, I apologise for insisting on the ur gent need for a solution to the cotton issue.  
We share your views entirely. 
 
 Our countries do not agree
, however, with your comments hinting that there can be no 
progress on the cotton issue unless results are first at tained in the agriculture negotiations overall. 
  I would like to endorse the view just expressed by my Kenyan colleague, who said that 
according to the July 2004 package, although cotton is to be addressed within the framework of 
agriculture, it is also to be addressed specifically.  I think we should take the specific nature of the 
issue into account, so that if there is a lack of progress on agriculture and certain countries do not 
want progress in agriculture, this will not mean a stan dstill on cotton too.  In view of the serious social 
problems the cotton issue poses for the whole of A frica, it would be wrong to allow the assertion that 
there can be no progress on cotton until there is  progress on agriculture.  Which leads me to  TN/AG/SCC/R/5 
 Page 11 
 
 
 July 2004.  As you may recall Mr. Chairman, at  that time we had fought for over a year on the 
standing and loan issue.  Although we were aware of it at the time, it is now becoming even clearer 
that pushing us, up to the very last minute, to  accept that the cotton issue be addressed within 
agriculture was a move planned in advance:  while  saying and knowing full well there would be no 
progress in agriculture, we have locked cotton into the entanglement of agriculture.  We do not wish 
to be the subject of such a plot.  We want the cotto n issue to move forward and be resolved.  There is 
no question of linking cotton with agriculture and th en saying that since agriculture is not going to 
progress, nor will the cotton issue.   Mr. Chairman, paragraph 46 of Annex A of th e July 2004 Framework Agreement stipulates 
that "work on cotton under all the pillars will reflec t the vital importance of this sector to certain 
LDC Members and we will work to achieve ambitious results expeditiously ". 
  "Ambitious results, expeditiously".  What h as happened to "expeditiously"? Where are the 
"ambitious results"?  We should not go back on the decision we all adopted within the framework of 
the July package. 
  Furthermore, paragraph 4, Annex A, of the Framework Agreement clearly states that "the 
Special Session of the Committee on Agriculture shall ensure appropriate prioritization of the 
cotton issue ".  I repeat, "  shall ensure appropriate prioritization of the cotton issue ".  Have we 
seen any evidence of "prioritizati on" since then, ladies and gentlemen?  Are we ensuring, or 
continuing to ensure, the prioritization of the cotton issue? 
  What about, "a subcommittee on cotton will me et periodically" and that its "work shall 
encompass all trade-distorting policies affecting the sector  in all three pillars of market access, 
domestic support, and export competition "? 
 
 The Sub-Committee's mandate is thus very clear and accurately reflects the WTO Members' decision to address the cotton issue "ambiti ously, expeditiously, and specifically". 
  Outside our Geneva negotiations , we took advantage of the mini ministerial conference yield 
in Dalian on 12 and 13 July 2005, to raise the alar m so that the necessary political decisions could be 
made to quash the attempt to delay the expeditious action that needs to be taken and the results that 
must be achieved in this issue as a matter of urgency.   The four co-sponsors of the Sectoral Initiative in Favour of Cotton and all the African countries which have joined the initiative consider  that they have fulfilled their responsibilities by 
submitting, on 29 April 2005, through the African Group, proposed elements of modalities on cotton. 
These were subsequently endorsed by trade minister s of the African Union and the Group of Least 
Developed Countries who met in Cairo, Egypt, a nd Livingstone, Zambia, from 5 to 9 June 2005 and 
from 25 to 27 June 2005 respectively.  Mr. Chairman, 
 
 Going back to the work of our Sub-Committee,  particularly the trade aspect of the cotton 
issue, we believe that it is absolutely nec essary to cut to the chase and begin negotiations. 
  Once again, we would like to thank and congratulate you for your commitment to this issue.  
If no progress is made, it will not be for want of effo rt or commitment on your part.  I feel, however, 
that it is now time for our partners to tell us what they want.  If they do not want to commit 
themselves, they must tell us so, and we will take note.   As you yourself have emphasized on numerous occasions, the time for speeches and 
statements has now passed. TN/AG/SCC/R/5 
Page 12  
 
  
 Moreover, you may have noticed that I have not  made any really serious statements in this 
room for over a year now.  This is because I told my self that everyone was awar e of the serious social 
problems posed by the cotton issue and so there wa s no longer any need to describe them or speak 
about the subject.  I now realise, however, that it is once again necessary to remind all Members of 
their responsibility regarding this issue.  I cannot understand how some delega tions in Dalian failed to 
raise the cotton issue even once.  This is not norma l, because regardless of what might be done within 
the framework of assistance, whether through aid or the doubling of aid to the countries concerned, I 
believe that we need to do our own work and earn our own living, which is why I say that the cotton 
issue has proved that the amount the African count ries lose through this commodity alone exceeds the 
total of what we receive in aid (bilateral and mu ltilateral).  Imagine the results if we took other 
products into consideration.  African countries, do not, therefore, want to make do with aid.  We want 
also to participate in international trade and tr ade our most competitive goods.  If some countries are 
not competitive in certain goods, they should not continue to impose themselves in the markets 
concerned. 
 
 Mr. Chairman, we specifically suggest that in the future, the agendas of the Cotton Sub-
Committee meetings, when referring to the trade asp ect, no longer include "Statements by Members", 
but be structured in such a way as to review, in accordance with the Sub-Committee's mandate, the 
"trade-distorting policies affecting the sector  in all three pillars of market access, domestic support 
and export competition". 
 
 Thank you.    TN/AG/SCC/R/5 
 Page 13 
 
 
 Statement by Brazil  
 
 
Mr. Chairman, 
 
Since the issue of the cotton dis pute has been raised and the US delegation referred to part of 
Brazil's comments during the last DSB meeting, on 15 July, please allow me to read parts of Brazil's statement on that occasion:  
"In Brazil's view, much more has to be accomp lished before we can recognize that the DSB's 
recommendations and rulings have been fully implemented in the cotton case. 
 
We believe, however, that the announcements ma de by the U.S. Administration are a positive 
step and we hope the U.S. Congress will follow-up w ith concrete and timely actions that may enable a 
mutually satisfactory resolution for this dispute;  a dispute that affects not only the two parties, but a 
number of poor countries in Africa and elsewhere, that cannot compete with the massive subsidies 
granted to the US producers of cotton.  
In this regard, we will be following the Unite d States' implementation actions with great 
interest." TN/AG/SCC/R/5 
Page 14  
 
 Statement by Mali
 
   Mr. Chairman,  
 The terms of reference we set ourselves in July 2004 are not being followed.  In July last year 
we all agreed that the cotton issue was to be addressed expeditiously, specifically and ambitiously. 
Until now, work on cotton has been postponed pending resolution of the problems in the agriculture 
negotiations.  To my mind this is a departure from th e letter and spirit of the commitments we made in 
July 2004. 
 
 The credibility of the Doha Round negotiations would be compromised irreparably if this 
month's text showed no advance over the text adopted one year ago on this crucial issue, for which we 
unanimously agreed on specific terms of reference.  
 We are not asking the impossible.  We are not seeking treatment for cotton that would be out 
of step with the agriculture negotiations.  But we demand that any text produced this month should be 
in line with the mandate we all agreed on, namely to  treat cotton as a priority issue.  We demand that 
the text to be adopted or circulated under th e Chair's responsibility shoul d constitute an advance 
towards resolving the cotton issue and no t a standstill as compared to July 2004. 
 
 All is not lost, however, and our confidence remain s.  What we want is to negotiate a text for 
inclusion in the July report that is worthy of the terms of reference we set ourselves. 
  The only way forward in these negotiations, which deem figures to be premature as yet, is to 
give practical effect to the concepts contained in our  decision of last year, for all three pillars of the 
agriculture negotiations.  We stand ready to enga ge in specific negotiations on such a basis.  TN/AG/SCC/R/5 
 Page 15 
 
 
 Statement by the United States  
  The United States informed the WTO in April this year that we fully intend to implement the WTO 
recommendations and rulings in the Cotton dispute. 
 
In the last Cotton Subcommittee meeting we rea ffirmed our commitment to implement the decision 
and since then we have taken significant steps to bring our measures into conformity with our WTO 
obligations.  Today I would like to highlight for the Subcommittee our recent actions to withdraw 
certain subsidies the WTO found to be prohibited.  
 
On 30 June, the United States announced, effective 1 Ju ly, administrative changes to three agricultural 
export credit guarantee programs.  The U.S. Depart ment of Agriculture changed the fees charged 
under two of its export credit guarantee programs (the  GSM-102 and SCGP programs).  The new fees 
charged by the programs respond to a key finding by the WTO that the fees should be risk-based.  In 
addition, the Department ceased accepting applica tions under a third, long-term, guarantee program 
(GSM-103).    On 5 July, the U.S. Administration also announced a legislative proposal to (1) repeal the "Step 2" 
cotton program, (2) repeal the statutory provision dealing with long-term guarantees (the GSM-103 
program), and (3) eliminate a one percent fee cap applicable to the other two guarantee programs 
(GSM-102 and SCGP).  
 This legislative proposal to repeal the Step 2 pr ogram would have the effect of removing payments 
the WTO found to be prohibited export subs idies and import substitution subsidies. 
 
The proposed repeal of the long-term guarantee program (GSM-103) would demonstrate that, for the 
United States, longer-term export credit guarantees are no longer an option.  In addition, the proposed repeal of the one-per cent fee cap imposed by statute on the other two 
guarantee programs would enable furthe r risk-based adjustments to fees. 
 
These U.S. actions were difficult but demonstrate our commitment to live up to our WTO obligations 
by implementing the WTO decision.  As Brazil stated  at the July 15 meeting of the DSB:  "[W]e 
acknowledge that the measures taken and the announ cements made by the United States constitute a 
positive step toward the resolution of the dispute".  
These U.S. actions also demonstrate our commitment to achieving an ambitious outcome in the WTO 
Doha negotiations.  As we have  previously noted, we have to bring home a comprehensive and 
aggressive Doha Round agreement – particularly through substantial tariff reductions across all 
markets and products - to ensure that our shared in terests are met.  We are committed to a successful 
conclusion of the WTO Doha Development Agenda by the end of 2006 that will ensure the creation of 
new market opportunities for all nations, especially the least developed.   TN/AG/SCC/R/5 
Page 16  
 
 U.S. GOVERNMENT DECISION ON COTTON 
 
Taking Action
: 
 
¾ The United States is committed to a successful conclusion of the WTO Doha Development 
Agenda by the end of 2006 that will ensure the creation of new market opportunities for all 
nations, especially the least developed.  Part of  that commitment means the elimination of all 
forms of export subsidies and  substantial re duction of trade-distorting domestic support, as 
well as expanded market access. 
 
¾ As a leader in the world trade system, the Unite d States informed the WTO in April this year 
that our nation would meet its obligations regarding findings against our agricultural 
programs principally related to cotton. 
 
¾ Today, President Bush submitted legislation to  the U.S. Congress that will enable the United 
States to meet our WTO commitments.   
 
¾ Under this legislative proposal, the President is moving to repeal the cotton Step 2 program.  
This would have the effect of removing  both export subsidies and import substitution 
subsidies, and also address issues related to suppression of cotton prices in world markets. 
 
¾ President Bush has also proposed  the repeal of the current one-percent fee cap imposed by 
law on the Commodity Credit Corporation (CCC) Export Credit Guarantee (GSM-102) 
Program.  This will enable utilizing mo re fully a risk-based fee structure. 
  
¾ In addition, President Bush is seeking permanen t repeal of the longer-term CCC Intermediate 
Export Credit Guarantee (GSM-103) program.   The U.S. Department of Agriculture already 
has suspended this program effective July 1.  Its statutory repeal would demonstrate that for 
the United States, longer-term export credit guarantees are no longer an option. 
 The President's legislative proposal was submitted after consultation with appropriate advisory 
committees, cotton stakeholders and the U.S. Congress,  and is in addition to administration actions 
restructuring U.S. export credit programs announced  by the U.S. Department of Agriculture on 
30 June 2005.  TN/AG/SCC/R/5 
 Page 17 
 
 
 ADMINISTRATION PROPOSES CHANGES TO COTTON AND EXPORT CREDIT 
PROGRAMS TO COMPLY WITH WTO FINDINGS 
 
The Department of Agriculture announced on 5 July that it is sending to the Congress proposed 
statutory changes to the "Step 2" cotton program and agricultural export credit guarantee programs to 
comply with a recent World Trade Organization (WTO) decision in a dispute with Brazil.  This action 
complements administrative changes to three e xport credit guarantee programs announced on 30 June. 
  
What Did the WTO Find? 
 
• On 21 March 2005, the WTO adopted the reports  of the Appellate Body and panel, as 
modified, in the dispute United States - Subsidies on Upland Cotton . 
 
• The panel found certain measures of the United States to constitute prohibited subsidies under 
the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement).  The panel specified 1 July 2005, as the date for w ithdrawal of the prohibited subsidies.  The 
prohibited subsidies consist of: (1) the upland cotton marketing user certificate program (the 
"Step 2 Program") for both exporters and dom estic mills; and (2) the CCC Export Credit 
Guarantee Programs, including the Supplier Cred it Guarantee Program, for those agricultural 
commodities for which the United States does not have, or is in excess of, WTO export subsidy reduction commitments. 
 
• The panel further found that certain U.S. domestic support programs caused significant 
suppression of cotton prices in the world market resulting in "serious prejudice" to Brazil's interests.  Such "serious prejudice" findings are not subject to the 1 July date mandated by the 
panel. 
  What is the Administration Doing to Comply?  
o On 20 April, the United States advised the WTO Dispute Settlement Body that it intended to 
bring the measures examined in the dispute into conformity with the applicable WTO 
agreements.  
 
o The Administration has consulted with affected  stakeholders, trade advisory committees, and 
committees in the House and Senate for input and advice on implementation. 
 
o  The Department announced on 30 June that beginning 1 July, CCC would use a risk-based 
fee structure for the GSM-102 and SCGP programs.  Fee rates will be based on the country 
risk that CCC is undertaking, as well as the re payment term (tenor) and repayment frequency 
(annual or semi-annual) under the guarantee.  The Administration also announced the elimination of the highest risk countries from th e programs altogether.  The new fee structure 
responds to a key finding by the WTO that th e fees charged by the programs should be risk 
based. 
 
o The Department also announced that, as of 1 July, the CCC will no longer accept applications 
for payment guarantees under GSM-103.  Any remain ing country and regional allocations for 
GSM-103 coverage under fiscal year 2005 program announcements will be reallocated to the 
existing GSM-102 program for that country or region. 
 TN/AG/SCC/R/5 
Page 18  
 
 o The Administration has submitted to Congress for its consideration pro posed legislation, 
which the Administration believes is appropr iate for the implementation of the WTO's 
recommendations and rulings.   
 
o That legislation would repeal the currently applicable one percent fee cap imposed on the 
CCC Export Credit Guarantee (GSM-102) Program.  The elimination of the fee cap would 
facilitate the implementation of risk-based f ees for the GSM-102 and the Supplier Credit 
Guarantee Programs.   
 o In addition, the Administration seeks repeal  of authority for the longer-term CCC 
Intermediate Export Credit Guarantee (GSM-103) program.  In recent years, participation in 
this program has been very low, and its re moval would demonstrate that longer-term export 
credit guarantees are no longer an option. 
 
The proposed legislative package al so seeks repeal of the Step 2 program.  Under Step 2, payments 
are made to exporters and domestic mills at rates determined by a formula when U.S. prices are higher 
than certain international prices. Repeal would ha ve the effect of removing both the export subsidies 
and import substitution subsidies found to be prohibited under WTO rules.  TN/AG/SCC/R/5 
 Page 19 
 
 
 Statement by Zimbabwe  
  Chair,  
Thank you for the floor.  It was most educative a nd instructive for my distinguished colleague from 
Benin, Ambassador Samuel Amehou, and me to a ttend the cotton workshop in Maputo, Mozambique 
at the end of June this year.  We wish to underline that cotton is produced by some 33 African states.  For 15 to 20 of these, cotton 
is a significant contribution to their GDP and to th eir foreign earnings.  Chair, cotton is important to 
many millions more people in Southern Africa than to those in the West African cotton – 4 nations.  
This therefore is a continent-wide concern.  We desire action to be realised with some immediacy;  that action must give effect to the rulings of the 
relevant WTO bodies.  Linkages and parallelisms be tween cotton and other areas of our negotiations 
are luxuries
 for others; we cannot indulge our plight any-longer. 
 Hong Kong may not be the theatre where cotton subsid ies will be removed.  Those who have to do 
something about cotton know themselves.  Africa needs action now; words no-longer have any value 
to us.  Allusions have been made to the effect  that some members may wish to go to Hong Kong 
without Africa.  They are at liberty to do that.  But, let no-one doubt Africa's commitment to 
multilateralism.  We are engaged and we intend to remain so.  Chair, it is our hope that we will find a way forw ard and advance the cause of fairer trade in cotton 
which requires the removal of the offending subsidies. 
 
Thank you.  TN/AG/SCC/R/5 
Page 20  
 
 Annex 3
 
  
 
Agenda Item 2(B):  Coherence Between Trade and Development Aspects:
 
Update on the Development Aspects of Cotton   
 
 
Statement by the Secretariat  
 
 
1. The 4th round of the informal consultative proce ss established by the Director-General to 
implement the development assistance aspects of the cotton-related decisions by Members, in the 
2004 July Package, took place on 18 July 2005.  The exchange of information provided by bilateral 
donors, multilateral institutions, and the cotton proponents, indicated clear evidence of positive 
evolution and concrete progress.  Bilateral donors and participating multilateral institutions reaffirmed 
their firm commitment to intensify the implem entation of their cotton-related programmes and 
projects.  They affirmed that implementation was now actively underway.  They noted that 
development assistance was work in progress;  urging patience for programmes, projects and activities to take effect.  Positive results would emerge, but would not be instant.  The cotton 
proponents also reaffirmed their commitment to  continuing domestic policy, structural and 
institutional changes. 
2. Evaluation of continuing progress needs to be made  from the baseline of the substantive First 
Periodic Report by the Director-General to Me mbers at the 2004 December General Council 
(contained in document WT/GC/83 and Add.1);  and,  the two subsequent updates to Members in the 
Sub Committee on Cotton on 22 March (TN/AG/SCC/W/1) and 29 April 2005 (TN/AG/SCC/W/2). 
Bilateral Donor Members
 
3. At the 4th round of informal consultations, the Eu ropean Communities, Japan and the United 
States provided progress reports on the implementation of their programmes.  Their updates built on 
their previous detailed reports.  In their contri butions, the three bilateral donor Members reaffirmed 
their commitment to the implementation of the decisions on the development aspects of cotton; 
reiterated the framework of their programmes; and,  welcomed the significantly enhanced funding and 
disposable resources for development that would emerge as a direct result of the decisions at the 
Gleneagles G8 Summit (to which these countries contributed), particularly on debt relief. 
4. The European Communities (EC) repeated details of the on-going implementation of their 
comprehensive programme on the development assistan ce aspects of cotton within the framework of 
the EU-Africa Cotton Partnership .  Programming was being re fined, implementation was 
intensively underway, and considerable resources were being deployed through regional programmes 
in Africa, particularly in West and Central Africa (WCA) and the individual proponent countries.  The 
EC, taking into account the concerns of propone nt countries regarding the downward trend in 
commodity prices, particularly for cotton, was focusing on the implementation of the "Global Insurance Index" facility.  Furthermore, options a nd solutions were being explored on commodity risk 
management instruments.  In addition, individua l EU Member States were putting in place detailed 
programmes in support of the cotton sector in co mpliance with the EU-Africa Cotton Partnership 
Agreement.  The EU Council of Ministers on 24 Ma y had agreed a set of conclusions to accelerate 
implementation of the Millennium Development Goals (MDG).  Additional resources were being set aside, most of which would be allocated to Afri ca.  The cotton sector would benefit from these 
additional resources, but only if cotton is identified as a priority in country programmes.  The EU had 
significantly contributed to, and welcomed the s ubstantial positive outcomes from the Gleneagles G8 
Summit on increasing development funding.  TN/AG/SCC/R/5 
 Page 21 
 
 
 5. Japan  announced the doubling of its ODA to Afri can countries in the areas of agricultural 
and rural development.  It underlined its commit ment to debt cancellation for African countries, 
which totalled US$4.9 billion.  Japan repeated its invitation to the cotton proponent countries (and other African countries) to contact Japanese em bassies in Africa to se ek access to available 
agricultural and rural development resources to fund cotton sector projects.  Japan recalled its Prime 
Minister's message to Africa in advance of the G8  Summit that Japan would increase its ODA value 
by US$10 billion in aggregate over the next five years.   Japan would continue to play a lead role on 
African development within the framework of th e process of the Tokyo International Conference on 
African Development (TICAD process).  TICAD IV will take place in 2008.  Japan was committed to working on issues of African development, includi ng cotton, through the various instruments which 
have been identified with significant available resources. 
6. The United States (US)  provided a comprehensive docum ent-based progress report on their 
contributions to the development aspects of cotton.   The US participation in the G8 debt relief 
package was underlined.  Benefici aries of debt relief included Benin, Burkina Faso, Mali and 
Senegal .  It was noted that this historic and meaningful debt relief package would free significant 
resources, which could be allocated to any priori ty development objective within the beneficiary 
countries.  The US also reported the announcement by the US President to double aid to Africa between 2004 and 2010.  This assistance included coun tries facing challenges to their cotton sectors. 
7. Updated information was provided on the Millennium Challenge Co-operation (MCC) 
account.  On 8 July, Burkina Faso, a threshol d country, was approved by the MCC Board of 
Directors.  The approved programme for Burkina F aso, as presented by Burkina Faso, was for the 
value of US$12.9 million; focusing on improving gi rls' primary education completion rates;  
following the priority identified by  Burkina Faso.  It was noted that other cotton proponents were not 
using the opportunity provided by the MCC to ta rget the cotton sector, but other sectors that could 
indirectly have positive knock-on effects for the co tton sector.  Individual coun try priorities would be 
respected.  Under MCC eligibility levels, the US provi ded updated reports on the status of individual 
country programmes in (Burkina Faso), Benin, Mali and Senegal.  The updates reviewed the state of 
the consideration of the proposals submitted by these countries.  These range over a wide area for the 
individual countries.  In Benin , these encompass competitiveness and port security, agricultural sector 
support, land security, strengthening basic infrastructure, capacity for good land governance, and improved credit access for SMEs.  In Mali , the proposals under consideration were focused on 
agribusiness;  specifically for the development of an agro-industrial zone in the Office du Niger 
region and developing the Bamako airport infrastru cture to facilitate exports.  In developing 
agribusiness, Mali has focused (not on cotton), but on rice, tomatoes, green beans, potatoes, mangoes 
and wheat.  Senegal  received MCC approval, on 30 June 2005, for immediate funding for assistance 
in the development of a Compact and the facilita tion of implementation.  The value of approved 
funding totalled US$6.5 million.  Senegal's propo sal was focused on infrastructure development.  
Support was being sought for the development of  an industrial, commercial and residential 
development zone.  The proposal also included a component for the promotion of private sector investment in the industrial zone. 
8. The US also reported on the "West Africa Cotton Development Program".  In fiscal 
year 2004, the value of agricultural activities unde r this programme totalled US$29 million for West 
Africa and US$126 million for all of Africa.  In response to the GC mandate on the development 
aspects of cotton, USAID had designed a cotton development package for the region.  Following the 
visit by USAID officials to West Africa in January 2005, near term action would focus on 6 out of 
15 identified areas of intervention.  
9. Linkages were also being established between  the US and West African Agricultural 
Research Organizations to focus inter alia  on several key areas, such as: arresting soil degradation, 
improving soil fertility, expanding the use of good  agricultural best prac tices in cotton farming, 
improvement of quality through better cotton seed gr ading and classing.  A biotechnology conference TN/AG/SCC/R/5 
Page 22  
 
 had been organized for ECOWAS countries in June  and technical assistance would be made available 
on bio-safety training, entomology programmes a nd soil management.  Many other specific projects 
and activities, at various levels of implementation, were listed.  Special mention was made and details 
were provided on the "Initiative to End Hunger in Af rica".  The primary objective of the Initiative was 
to rapidly and sustainably increase agricultural growth  and rural incomes in Sub-Saharan Africa.  On 
this project, it was reported that US$45.5 million had been spent in 2004 for African farmers with 
small holdings.  
Multilateral institutions
   
10. Contributions were made by FAO, IMF, ITC and UNIDO.  The FAO  reported on the 
implementation of its programme underway with co tton producer unions.  A field mission had been 
undertaken in Burkina Faso.  FAO has prepared an intervention associating the Organization with the 
"Research and Good Agricultural Practices" block.  This would be further pursued.  During the FAO 
mission, a technical seminar for public and private sec tor actors, particularly for cotton producers, had 
been organized.  The results of the seminar include d the decision to establish a pilot farmers' field 
school in one of the special programmes for food security project sites.  The FAO also signalled an 
imminent project with wide scope for cotton part nership with other agencies in West and Central 
Africa.  The FAO was also assisting the countries of  the West African Economic and Monetary Union 
(WAEMU), within the context of the EU-WAEMU cotton quality programme, covering the issues of 
labelling and cotton classification.   
11. The IMF  reported on the cotton meeting organized by Benin and the IMF, in Cotonou, on 
18 May 2005.  All the cotton proponent countries had participated.  The IMF pointed to the useful 
outcome of the meeting reflected in the agreed "J oint Policy Statement".  The Joint Policy Statement 
had recommended four aspects of policy responses to deal with the challenges posed by the cotton 
issue;  three of these policy areas were on develo pment assistance aspects, and one area addressed the 
trade policy aspects.  The IMF underlined the critical  importance, as reflected in the Cotonou meeting 
outcome, for action at three inter-related levels, name ly, eliminating trade distortions;  the need for 
structural reforms in the four cotton proponent co untries, and finally, the need to mobilize donor 
resources for reforms in the countries concerned.  On its part, the IMF had clearly stated its 
readiness"... to augment PRGF arrangements if there is an external financing requirement resulting 
from terms of trade shocks".   
12. The ITC  had no operational details yet to report,  but drew attention to the changing 
(increased) demand pattern for cotton following the e xpiry of the Agreement on Textiles and Clothing 
(ATC). 
13. UNIDO  confirmed its interest and availability to participate in the finalization and 
implementation of the EU-Africa Cotton Partnership Forum initiative (and any other initiative) in a 
comprehensive and sustainable manner.  UNIDO' s contributions would be based on its mandate, 
experience and comparative advantages, which in cluded participation in the implementation of 
components related to national and regional st rategies, policies and institutions, technology 
innovation, and chain integration.  Participants to  the consultations were informed that UNIDO was 
now assisting country producers of cotton in the West African Economic and Monetary Union (WAEMU)
2 through the "UEMOA/EU/UNIDO Quality Programme".  Specific UNIDO action was 
detailed in three areas, namely:  i) the devel opment and promotion of a specific cotton label for 
UEMOA cotton, and related activities to enhance its market image and promotion;  ii) the purchase of 
two instrumental cotton classification systems and a ccessories for Mali and Togo;  and, iii) training 
and capacity building programmes in relation to cott on classification, ginning and commercialization.  
Furthermore, UNIDO had approved an amount of € 106,000 for the formulation of a programme on 
the "Development of the Cotton, Textiles and Garm ent Value Chains and Networks in Africa".   
                                                      
2 UEMOA   TN/AG/SCC/R/5 
 Page 23 
 
 
 Cotton Proponent Members  
 
14. Benin circulated a written statement, and in tervened, on behalf of the cotton proponent 
Members, to underscore several points.  Mali and Chad made complementary statements.  Tanzania 
posed a question as to the applicability of cotton de velopment assistance beyond the "Cotton 4".   
15. Benin  welcomed the progress made on the development assistance aspects of cotton by 
bilateral donor Members and the relevant multilateral institutions, but appealed for stepped-up efforts 
in light of the scale of the challenges facing Afri can countries on cotton production and trade.  Benin 
recalled the positive outcomes from the African Re gional Workshop on Cotton, organized by the 
WTO Secretariat in May 2004.  It also recalled th e specifics of the mandate in the 2004 July Package 
for action on the development assistance aspects of cotton.  After the 3rd Round of consultations on 
the development assistance aspects of cotton, the cotto n proponents were encouraged by the results of 
the 18 May meeting in Cotonou, organized by the Government of Benin and the IMF, and the recent 
visit to Africa of Mr. Paul Wolfowitz, the new Pr esident of the World Bank, highlighting the World 
Bank's priority commitment to Africa.  Benin reporte d on the recent results of a meeting on Cotton in 
Maputo with similarly useful results.  It emphasise d that all of Africa was affected by the "cotton 
question".  Benin had submitted a list of cotton-spec ific projects for the consideration of bilateral 
donors, through the WTO Secretariat, and was awaiting a response.3  Benin informed participants that 
all the cotton proponent countries were fully co mmitted to the process of on-going domestic economic 
reform.   
16. Mali  welcomed the efforts of the bilateral donor Members and the relevant multilateral 
institutions.  It noted that it had submitted projects;  some were being implemented, but others were 
not yet being acted upon.  Mali's principal concern was with the decline and volatility in cotton prices.  
Mali confirmed its continuing engagement with  domestic institutional  reform, scheduled for 
completion in 2006.   
17. Chad  and Senegal  welcomed bilateral donor efforts, noting that progress was evident, but 
urging them to increase their efforts commensurate w ith the scale of the challenge faced by African 
cotton producers.   
18. Tanzania asked whether there were "any plans to cover countries beyond the Cotton 4 in 
relation to cotton development assistance".  Jap an and the United States responded that the 
opportunities existing in their programmes covered a ll of Africa.  Japan suggested that Tanzania 
contact the Japanese Embassy in Dar es Salaam with any specific requests.  The point was made that 
opportunities existed, but actual approvals of projects and activities was demand driven.  The 
Chairman confirmed the positions expressed by Japan  and the United states.  Tanzania expressed its  
satisfaction with the answers provided.   
Conclusion  
 19. In conclusion, the Chairman:  
− welcomed t he progress made and the information prov ided indicating positive evolution;  
− informed participants that the WTO Secretaria t was working jointly with the OECD 
Secretariat in gathering information for the "Cotton Section" in the 2005 OECD/WTO Trade-
Related Technical Assistance Database.  This Report would be jointly released by the WTO 
                                                     
 
3 Subsequently, at the 5th Meeting of the Sub-Committee on Cotton, on 18 July, the WTO Secretariat informed 
participants, that the submitted projects were being processed (fo rmatted and translated).  There had been some delay in the 
processing, while awaiting the submission of missing components of the projec ts.  As soon as processing was completed, 
they would be circulated to all particip ants in the consultative process.   TN/AG/SCC/R/5 
Page 24  
 
 and the OECD just before the 6
th WTO Ministerial Conference.  The structure of the report of 
the Cotton Section, with insights into the conten ts would be provided to participants in the 
consultations after the summer break;  
− informed participants that the consultative process would resume after the summer break.   
Fifth Meeting of the Sub-Committee on Cotton  
 
At the 5th Meeting of the Sub Committee on Cotton, on 18 July, the WTO Secretariat reported in 
summary to the Membership on the basis of the foregoing information and progress report provided by bilateral donor Members, the relevant multilatera l institutions, and the cotton proponent Members.  
The Secretariat also reported to Members th e key outcomes from the 2005 (biennial) China 
International Cotton Conference, which took place in Sh anghai, 21-24 June 2005.  Of interest to the 
Members in the Sub Committee, the Secretariat, in its report, highlighted the presentations by 
domestic industry representatives on market trends in the top six cotton producers (China, USA, India, 
Pakistan, Brazil and Uzbekistan).  The presentati ons had focused on current domestic measures in 
some of these countries to improve efficiency, pr oductivity, quality and spur increased demand for 
cotton.  The various presentations had identified several measures such as better management 
practices, improved agricultural cultivation methods, introduction of new technology, introduction of 
transgenic cotton varieties, risk minimization through market-based instruments, and cotton promotion.  Most of the presentations reflected a keen sensitivity to trade policy developments, 
particularly the DDA negotiations and its influence on cotton sector market trends.  Many participants 
at the conference had pointed to the effect of ATC expiry in increasing global cotton demand.  The 
principal focus in these presentations centred on in creased production efficiency in order to increase 
their share of the global cotton market.  TN/AG/SCC/R/5 
 Page 25 
 
 
  
 
Statement by Benin   
  
 Mr. Chairman, 
  Distinguished delegates,   We are meeting today, Monday 18 July 2005, in  this fourth round of consultations on the 
development aspects of the sectoral initiative for cott on, pursuant to the decisions of the Framework 
Agreement of July 2004.   When they adopted that Agreement on 1 August 2004, WTO Members took note of the workshop organized in Cotonou on 23 and 24 March 2004 by the WTO Secretariat in pursuit of 
progress in the development assistance aspects, and instru cted the Secretariat to continue to work with 
the development community and to provide th e Council with periodic reports on relevant 
developments.   It was furthermore agreed that Members would work on related issues of development 
multilaterally with the international financial ins titutions and continue thei r bilateral programmes. 
 
 In this regard, the General Council instructed  the Director-General to consult with the 
relevant international organizations, including  the Bretton Woods Institutions, the Food and 
Agriculture Organization and the International Trade Centre to direct effectively existing programmes 
and any additional resources towards developm ent of the economies where cotton has vital 
importance. 
  I should like to thank all the bilateral and mu ltilateral partners who are working actively to 
implement the decisions on the develo pment aspects of the cotton issue. 
  I accordingly extend to these partners the thanks  of the people and Government of Benin, and 
at the same time invite other partners that have not yet done so to follow suit. 
  To you, Mr. Chairman, I extend my congratula tions on your tireless efforts in conducting the 
work on the cotton issue.  
 Since the third round of consultations on the de velopment aspects of the cotton initiative, held 
on 25 April 2005, there have been two events of significance to the cotton issue and its development 
component:   - A workshop, organized by the International Monetary Fund in Cotonou on 
18 May 2005, on the macroeconomic consequences of the decline in cotton prices; 
 
 - a visit to Burkina Faso in mid-June 2005 by Mr. Paul Wolfowitz, President of the 
World Bank. 
  We hope that all these initiatives will heighten awareness of the real plight of those concerned 
and will help to secure swift settlement of the problems raised by the cotton initiative. 
  As to the projects on the development aspect of cotton , I would remind Members that  as I 
noted at our last meeting, in a letter of 22 Nove mber 2004 to the WTO Secretariat the Government of 
Benin presented for funding by de velopment partners a first batc h of multidimensional integrated 
projects.  They seek, inter alia: TN/AG/SCC/R/5 
Page 26  
 
  
• Support for improving the productivity of Benin's cotton farms; 
• support for improving the quality of cotton fibre and its brand image; 
• support for the operation of the structures set up to reform the cotton industry; 
• diversification of agricultural sectors; 
• support for the conciliation and arbitration board for the management of disputes 
concerning the cotton industry in Benin; 
• establishment of a reserve fund and in surance system for the cotton sector; 
• development of a system of phased and targ eted control for phytosanitary protection 
of cotton crops, allowing cost reduction and improved productivity and quality while 
reducing environmental impact. 
 
 Follow-up to this request is still awaited by Benin.   As to the ongoing national policy reforms in the cotton sector, as noted before the 
Government of Benin has undertaken major institu tional reforms.  A thor ough and comprehensive 
presentation of them was given to stakeholders at our last meeting. 
  As in the past, Benin is resolutely engaged on the path of reform and is open to any proposals 
that may help it to pursue, strengthen and perpetuate the reforms under way. 
  
__________