WORLD TRADE  
ORGANIZATION  TN/AG/SCC/W/31 
27 July 2005 
 (05-3383) 
Sub-Committee on Cotton  
  
IMPLEMENTATION OF THE DEVELOPMENT ASSISTANCE ASPECTS OF THE 
COTTON-RELATED DECISIONS IN THE 2004 JULY PACKAGE 
 
Item 2C:  Coherence Between Trade and Development Aspects:
 
Update on the Development Aspects of Cotton   
 
Fifth  Meeting of the Sub-Committee on Cotton (18 July 2005) 
 
Secretariat Progress Report  
 
 
 
 
 
 
 
 
1. The 4th round of the informal consultative process  established by the Director-General to 
implement the development assistance aspects of th e 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 mu ltilateral 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 Members 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 implementati on 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 em erge as a direct result of the decisions at the 
Gleneagles G8 Summit (to which these countries contributed), particularly on debt relief. 
                                                      
1 This document is an update to the First Periodic Report by the Director-General to the General 
Council, circulated under the symbol WT/GC/83, and subsequent updates in TN/AG/SCC/W/1 and 
TN/AG/SCC/W/2. This document has been prepa red under the Secretariat's own 
responsibility and without prejudice to the positions of Members 
and to their rights and obligations under the WTO TN/AG/SCC/W/3 
Page 2  
 
 4. The European Communities (EC) repeated details of the on-going implementation of their 
comprehensive programme on the development assist ance 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 compliance with the EU-Africa Cotton Partnership 
Agreement.  The EU Council of Ministers on 24 May 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 A frica.  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. 
5. Japan  announced the doubling of its ODA to Afri can countries in the areas of agricultural 
and rural development.  It underlined its commi tment 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 year s.  Japan would continue to play a lead role on 
African development within the framework of the 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, incl uding 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 threshold 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 infrast ructure, 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  TN/AG/SCC/W/3 
 Page 3 
 
 
 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 practices in cotton farming, 
improvement of quality through better cotton seed gr ading and classing.  A biotechnology conference 
had been organized for ECOWAS countries in June  and technical assistance would be made available 
on bio-safety training, entomology programmes and soil management.  Many other specific projects and activities, at various levels of  implementation, were listed.  Sp ecial 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 asso ciating 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".   TN/AG/SCC/W/3 
Page 4  
 
 12. The ITC  had no operational details yet to repo rt, 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 Partnershi p 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 th e 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 ma rket 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 cotton 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".   
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 repor ted 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 comm itted 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 wa s with the decline and volatility in cotton prices.  
Mali confirmed its continuing engagement with  domestic institutional  reform, scheduled for 
completion in 2006.   
                                                      
2 UEMOA  
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 (formatted and translated).  There had been some delay in the processing, while awaiting the submission of missing components of the projects.  As 
soon as processing was completed, they would be circulat ed to all participants in the consultative process.    TN/AG/SCC/W/3 
 Page 5 
 
 
 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 pl ans 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 Secretariat 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 
and the OECD just before the 6th 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  
 20. At the 5
th 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 the 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 presentations 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 incr eased production efficiency in order to increase 
their share of the global cotton market. 
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