RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/AG/SCC/R/10 
6 October 2006 
 
 (06-4815) 
Sub-Committee on Cotton  
  
 
 
SUMMARY REPORT ON THE TENTH MEETING OF THE SUB-COMMITTEE 
ON COTTON HELD ON 2 MARCH 2006 
 
Note by the Secretariat
1 
 
 
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 Programme adopted on 1 August 2004 by the General 
Council (WT/L/579, refers), held its tenth mee ting on 2 March 2006 under the chairmanship of 
Ambassador Crawford Falconer of New Zealand.  The meeting, initially scheduled to be held on 
Tuesday, 28 February 2006, was postponed to Thursday, 2 March 2006, due to unforeseen circumstances (WTO/AIR /2764/Corr.1 refers). 
2. The agenda as contained in WTO/AIR/2764 was adopted. 
I
TEM 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. Benin, on behalf of the African Group, expressed its gratitude to the Chairman for all his 
endeavours to find a solution to the cotton issue.  Benin noted that the Co-sponsors of the Sectoral 
Initiative in favour of Cotton ("Cotton-Four") ha d been actively working to devise formulas to 
operationalize modalities for the reduction of trade-di storting domestic support to cotton.  The new 
formula presented on behalf of the "Cotton-Four " by Chad (see Chad's Statement in Annex 2), 
covered all of the concerns raised on the "Cotto n-Four" 's first submission of 17 February 2006 
(TN/AG/GEN/12 and TN/AG/SCC/GEN/3 refer) on el ements of a reduction formula for domestic 
support for cotton.  Benin believed that the new fo rmula being submitted would satisfy all delegations 
as well as African cotton producing and net exporting countries. 
5. Benin noted that more than 33 African countri es were cotton producers and net exporters and 
that the African Group fully endorsed the statement made by the Ambassador of Chad on behalf of the 
"Cotton-Four" and of all African cotton producing countries.  As said in Chad's statement (see 
Annex 2), the new formula presented in TN/AG/SCC/GEN/4 was worked out with a view to operationalizing earlier submissions of the "Cotto n-Four".  The African Group wished to again 
                                                     
 
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to their rights or obligations under the WTO. TN/AG/SCC/R/10 
Page 2  
 
  express its full support for the formula and hoped that other Members would provide comments so 
that a solution to the cotton issue could be fo und for the African countries which were severely 
affected by the deterioration in the terms of trade for cotton. 
6. The representative of Côte d'Ivoire conveyed to  the Chairman greetings and congratulations  
from leading actors in the cotton sector who had recentl y met in Paris at the International Agricultural 
Show where cotton producers had made themselves hear d.  The representative of Côte d'Ivoire stated 
that he had participated in the one-day conferen ce devoted to cotton and had heard a number of very 
important statements from the leading actors in th e sector, both the donors and the African producers.  
The day was devoted to the subject "African cotton farming in the face of globalisation" and included 
the projection of a film entitled "The War of Cotto ns" which treated the subject as a David versus 
Goliath type combat.  The representative of Côte d' Ivoire concluded by saying that African producers 
and the entire sector in Africa, were keeping an eye on the discussions that were taking place at the 
WTO;  they were closely following the reports  from their representatives at the WTO and were 
waiting to see what the Chairman and the Sub-Committee could come up with in order to make progress. 
7. The European Communities welcomed the ne w proposal tabled by the "Cotton-Four" 
(TN/AG/SCC/GEN/4 refers).  The proposal was timely  as it did clarify the various concerns raised 
regarding the earlier "Cotton-Four" submi ssion of 17 February 2006 (TN/AG/GEN/12 and 
TN/AG/SCC/GEN/3 refer).  In that first submissi on, the figures suggested a reduction for cotton of 
three times the overall domestic support reduction fi gures for agriculture.  The representative of the 
European Communities noted that that had raised  a number of questions because taking the EC's 
figure of 70 per cent as a basis, three times 70 per cent equalled 210 per cent which did not make 
mathematical sense.  However, the European Comm unities believed that the formula detailed in the 
new proposal tabled by the "Cotton-Four" could act ually lead to very realistic results and the 
European Communities was favourably inclined towards it, subject to a more detailed examination.  
Finally, the representative of the European Comm unities enquired as to whether the proposal by the 
"Cotton-Four" would be followed by a text on ma rket access and on export competition, since for the 
moment the proposal only dealt with the pillar of domestic support.  
8. Brazil welcomed the new proposal put forward by the "Cotton-Four" and thanked the 
Ambassador of Chad for his comprehensive presen tation of the proposal.  Although Brazil was still 
pending on formal and technical comments by its capita l, its first reaction was clearly that it could go 
along with the general trust of the proposal, whic h was the substantial reduction of all forms of 
trade-distorting support to cotton.  The representativ e of Brazil welcomed the fact that the formula 
seemed a very creative and ingenuous way of preservi ng the interests of cotton producers irrespective 
of the general results of the Round.  Brazil also  stated its agreement with the base period being 
proposed by the "Cotton-Four" for their calculations.  Indeed, Brazil, and the G-20, had always supported the period of 1995 to 2000 as the best base period for domestic support calculations. 
9. In way of preliminary comments, Argentina we lcomed the proposal by the "Cotton-Four" 
which it thought provided Members with a good basis of work.  Argentina noted that it would study the proposal closely, but that it wished to already highlight an important element, as Brazil had done, with respect to the choice of the six-year period from 1995 to 2000 as the base period.  The 
representative of Argentina noted that Argentina w ould also be keeping a close eye on other issues, 
such as the question of the Blue Box. 
10. Japan stated that its capital had not yet ha d time to analyse the new proposal by the 
"Cotton-Four" and that it merely wished to make  a few initial comments.  Generally speaking, like 
other countries, Japan welcomed the new proposal by  the co-sponsors of the Sectoral Initiative in 
Favour of Cotton.  There had been many qualitativ e improvements and clarifications since the first 
version of the proposal, in particular as regarded operationalizing the term "more ambitious".  Japan  TN/AG/SCC/R/10 
 Page 3 
 
 
  noted that the proposal was generally in line with  the G-10 proposals and that Japan could therefore 
support it.  Finally, the representative of Japan noted that Japan was of the view that, as suggested in 
the proposal, the Blue Box and de minimis should be included in trade- distorting domestic subsidies 
reductions. 
11. Statements made by the following delegations  were forwarded to the Secretariat and are 
attached to this summary report:  Australia, Chad , China, Guinea, New Zealand, Paraguay and the 
United States (see Annex 2). 
ITEM B:  COHERENCE BETWEEN TRADE AND DEVELOPMENT ASPECTS : UPDATE ON THE 
DEVELOPMENT ASPECTS  
12. The Chairman recalled that the terms of re ference establishing the Sub-Committee on Cotton 
clearly referred to the need for coherence betw een the trade and development aspects of the cotton 
issue (paragraph a, TN/AG/13 refers). 
(i) Statement by the Secretariat 
13. On behalf of the WTO Secretariat, Mr. Chiedu Osakwe updated the Sub-Committee on the 
development aspects of cotton, in the light of the Hong Kong Ministerial Declaration. 
14. The statement made by the Secretariat has been circulated as document TN/AG/SCC/W/5 and 
is also attached to this report (see Annex 3). 
(ii) Statements by Observer Internationa l Intergovernmental Organizations 
15. There were no statements by Observer Inte rnational Intergovernmental Organizations. 
(iii) Statements by Members 
16. The statement made by Chad is attached to this report (see Annex 3). 
17. Côte d'Ivoire noted that the report by the Secr etariat on the development aspects showed how 
intense and thorough discussions had been at the sixth round of consultations on the development-
aspects of cotton.  Côte d'Ivoire had also made  a statement during those consultations and had 
submitted a summary of the structural reforms carried out in the cotton sector in Côte d'Ivoire.  The representative of Côte d'Ivoire also noted that he had undertaken to send to his capital the Secretariat's 
Working Table compiling various supports to cotton with the objective of quantifying aid on the basis 
of what had been allotted to the cotton sector.  The Table had already been sent out to capital and, in 
the course of the next round of consultations on th e development-aspects of cotton, Côte d'Ivoire 
would provide clarifications in order to reassure its partners regarding the usage of the funds granted. 
18. Benin, for the African Group, pointed out agai n that the 33 African cotton producing and net 
exporting countries were facing the same challeng es as the "Cotton-Four".  Consequently, while 
welcoming and expressing appreciation for the effo rts of all the development partners and the 
Bretton Woods institutions, Benin wished to strongly appeal for development efforts to include all the 
33 African countries concerned.  Benin noted that it was therefore important, to that end, that the 
concerned African countries did some ground work and submit programmes and projects liable to be 
funded by the development partners.  Benin reiterate d its gratitude to all th e development partners, 
particularly the United States, the European Union,  Japan and the Bretton Woods institutions and all 
other partners, for all the endeavours that had been undertaken so far to ensure that cotton continued 
to be an important economic cont ributor to the African region. TN/AG/SCC/R/10 
Page 4  
 
  19. However, Benin stressed that aid remained ai d and, aid alone could not resolve the cotton 
issue.  The trade aspect was where a solution lied, and particularly the elimination of, or at least a 
significant decrease in, the support granted to  cotton farmers in developed countries. 
20. Benin also noted that there was one facet of aid that had never been clearly addressed in the 
Sub-Committee's work, namely the proposal by th e "Cotton-Four" for a temporary but efficient 
support fund to save their cotton sectors from extinction.   It had been stressed  several times at the 
Sub-Committee, that, although they were LDCs, these countries had to put up a lot of money to ensure that cotton was collected and purchased from th eir farmers.  This could not go on indefinitely.  
There would undoubtedly be years when those countries would lack the wherewithal and, if that ever 
happened, the cotton would remain on the farms and go un-purchased, leading to  the end of the cotton 
sector.  Benin noted that it was in order to prevent that that the "Cotton-Four" had asked for a support 
fund to be set up.  Benin stressed that the "Cott on-Four" remained entirely open about such a fund and 
were ready to discuss its management and that there was no question of the fund going to 
governments.  Members needed to engage in reflect ion to ensure that such a fund actually served to 
maintain cotton-growing in the concerned countries so that, pending agreement on a final solution to 
the cotton subsidies issue, Members could in parallel ensure that cotton continued to be produced in 
the countries concerned. 
21. Benin cited the example of Argentina which, a few years ago was a cotton producing and net 
exporting country, but today, owing to similar probl ems than those faced by the "Cotton-Four", had 
become a net importer of cotton.  The problem was therefore an important one.  Whereas Argentina at 
least had a number of substitution products, for most African countries cotton was the only product 
and the only export.  Benin therefore appealed to all partners to show the necessary political will for a 
more positive consideration to be given to th e request for the creation of a support fund. 
22. The representative of Burkina Faso, referring to  the new proposal which it had just tabled 
along with the other "Cotton-Four", noted that it e xpected a much more in-depth discussion when the 
document would be translated from French into  the two other WTO working languages, namely 
English and Spanish.  Burkina Faso also welcomed  the reaction of the development partners to the 
development-aspects of cotton,
 at the end of the meeting of 16 February, the minutes of which had 
been just presented by Mr. Osakwe of the WTO Secr etariat.  Burkina Faso believed that, with donors' 
insight and tenacity, African cotton producing countri es could hope to lift the sector out of the current 
doldrums and infuse greater hope in their people w ho made their basic living from cotton, which was 
not only an asset to the economies but also helped in alleviating poverty.  Finally, Burkina Faso 
undertook, on behalf of the "Cotton-Four", to improve the presentation of their proposals in an 
attempt to facilitate donors' support. 
23. The representative of Argentina thanked the Am bassador of Benin for mentioning the case of 
cotton in Argentina.  Indeed, Argentina had suffe red a serious collapse in its cotton production over 
the past years.  The representative of Argentina adde d that while it was true that his country produced 
other products, cotton, in particular, was a key crop for three Argentine provinces, namely Chaco, 
Formosa and Santiago del Estero.  The loss of cotton had caused serious trouble in those three provinces whose earnings and economic activities revolved entirely, or almost entirely, around cotton;  
so that while the impact might not have been so gr eat at the national level, for those three provinces it 
had been considerable.  And this was important fo r Argentina, because it had a federal structure, and 
had to take account of the local situ ation in each one of its provinces. 
24. Following on from Benin's statement, the represe ntative of Côte d'Ivoire stated his full 
backing to the matter of aid.  As stated by the representative of Argentina, Côte d'Ivoire was also 
concerned by the cotton issue since it had undertaken  horizontal as well as vertical diversification.  
Because the prices of its main products had begun to  fall, Côte d'Ivoire had turned to cotton.  
Furthermore, one region, the North, was heavily  dependent on cotton which accounted for some 60  TN/AG/SCC/R/10 
 Page 5 
 
 
  per cent of the national territory.  The North was an area at risk and unfortunately had been hit by the 
national crisis which had had broa d coverage in the press and which was still a reality.  This was why 
Côte d'Ivoire fully supported Benin's proposal and also believed that solutions for a fund could be 
found, particularly in view of the pledge of s ound management that the Ambassador of Benin had 
given.  Côte d'Ivoire awaited the reaction of th e development partners w ho it hoped could, at some 
stage, perhaps remember the Marshall Plan, th e tsunami, and the emergency aid dropped across 
borders into countries which were beset by various disasters. 
25. In closing the meeting, the Chairman said that he looked forward to targeted interventions by 
Members on their assessment of progress in the Agri culture Special Session and to contributions by 
International Intergovernmental Organizations to the discussion on the development-related aspects of 
cotton. 
26. The Chairman asked that any delegation that wa nted its statement included as an attachment 
in the summary report on the formal meeting should send it to the Secretariat in electronic format as 
soon as possible. 
ITEM C:  OTHER BUSINESS  
Dates of the Next Meetings 
27. The Chairman announced that the next mee tings of the Sub-Committee were tentatively 
scheduled for 27 March 2006 and 24 April 2006. 
Chairman's Report to the Special S ession of the Committee on Agriculture 
28. The Chairman stated that in making his repor t on the meeting to the Special Session of the 
Committee on Agriculture, he would bear in mind the statements made by all Members, and that the 
report would be short and entirely factual.  Keepi ng 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/10 
Page 6  
 
  Annex 1
 
 
Statement by Ambassador Crawford Falconer of New Zealand 
at the Tenth Meeting of the Sub-Committee on Cotton held on 2 March 2006 
 
 
Agenda Item 2(A):  Assessment of Progress in the Agriculture Special Session  
   The discussions that we have had on domestic  support covered some things which do have 
clearly relevance to cotton, which was product-speci fic AMS caps in particular and again, I do not 
think there was anything that I would describe as a gr eat deal of progress on that.  The two fairly well 
entrenched schools of thought on what the base period should be for product-specific caps pretty well 
reiterated their positions and we did not really se e anything that could be described as tangible 
progress on that issue.  Although, there was clearly a genuine recognition that this is not an issue that 
can be left aside for a long period of time because it is absolutely central in securing a proper outcome 
overall as part of the modalities on AMS.  And clearly, there is a big difference, a very big difference 
depending on which base periods you would use.  And the Secretariat is working on producing just 
factual data on what those support figures are for t hose years that are contested at the moment as 
constituting the potential base period.  Those numbers are out and about and have been out and about 
in the past but we thought it would be useful to just produce those for you again.  We did have a 
discussion on the green box as well.  There was not really anything new that I can say was put 
forward on the blue box at all, which of c ourse is also rather significant for cotton. 
  The discussions that we had on export competiti on were largely in informal mode, and largely 
focused on food aid.  I think, more than perhaps th e other elements, what I felt from those discussions 
was that we had profited from the Hong Kong mee ting as far as food aid was concerned because 
I think we have more of a sense of what the stru cture of the disciplines might ultimately look like.  
I know it does not sound like much but is a big advance on the rather confused and chaotic discussions that we tended to have before Hong Kong, and I certainly hope that we might have a basis 
that we can work from to narrow differences, as well as find a structure to work off, based on the 
fundamental distinction between the safe box and othe r situations.  And as I foreshadowed at the time 
of the meeting, I will be in a very near future trying to produce a series of working documents on the 
green box, on food aid and other issues of course as it happens.   Now, on market access, we had some discussions.  There are some informal papers which I believe are being sort of made available to all de legations.  I will not repeat all the issues there.  
Again we have had quite a good discussion I th ought on sensitive products, quite detailed and 
immersed but no real fundamental change in anybody's position on what the basis should be, but moving ahead on how to deal with sensitive products in terms of market access.   So, that is very abbreviated.  Fundamentally, just to sum up overall where I think we are on that, I felt that I have had enough input from construc tive discussions to be able to try and hopefully 
be more helpful to the process by having some ki nd of reference document or annotated document on 
issues like the SSM, the Green box and Food aid for our next discussions, but obviously, and I stressed this in the informal open-ended meeti ng, we are now in a multilateral process and we all 
agree that we have to do the modalities by the end of April.  We have one more Special Session effectively which is in March, before end of April,  and at the moment we do not have anything that 
could be described as fundamental bridging positions  on the key issues for those modalities, and we 
all know that some of those are politically extremel y difficult and can only be resolved or advanced 
for political input.  We cannot possibly expect to have  the modalities achieved at the end of April if 
we come out of our March meeting without putative te xt that we can work off and we are certainly not 
going into the March meeting with those texts or w ith draft document.  As I said, I will hopefully have  TN/AG/SCC/R/10 
 Page 7 
 
 
  a few working documents.  I would hope that we wi ll come out of the March meeting with the most 
advancement on those issues and hopefully on a couple of others to be able, out of the inputs, to 
gather a draft for you to further consider on tho se areas post-March, but that leaves very little time 
because they then have to be finalized in the month of April, along with all the other elements which 
are largely and not entirely numerical issues. 
 
 Now, it is true that numerical issues can be  dealt with, with the right political decisions, 
relatively quickly and are perhaps not that complicated , but for textual issues, th ey need to be worked 
through, and that means we need to have a pro cess going and we are going to have a very short 
window to do it.  And of course, all of that app lies to cotton and indeed applies with much greater 
specificity, priority and importance because that is wh at we are still guided by and what we are doing.  
So if as Chair I express anxiety and the urgency that we face and the complication we face, it is even 
more so for cotton.   So that is the reality.  We know that we have  in this negotiation to advance on the agriculture 
front, and we know that cotton operates within that horizon but that it has its specificity and priority 
within that horizon.  So, when we do not see m ovement that we can record in areas like AMS and 
blue box in particular, I do not preclude anything else but they are the key areas for trade-distorting domestic support, then clearly we are not seeing it in cotton either.  So they will go together.  Now, 
coming to the last meeting of the Special Session, you know I have been asked by you to do questions and that was an interesting exercise for me.  A nd I do not really expect people to answer those 
questions meticulously and in detail.  It was mean t for people have a sense of focus of how much we 
have to do and I think it achieved that.  But I do th ink that in the cotton area, it is a rather different 
issue because there, we do have real specificity, th ere are really specific questions and because of the 
priority, we are obliged to ply to this.  We need  to address those and we have a proposal here which 
can help us to address them effectively and I have ju st re-circulated the questions for this meeting so 
that people, in case they have forgotten, are aware of  them, so that they can help focus our discussion 
here today.   I think it is very positive for the process that in response to that, we have from the proponents 
two papers now:  one that was circulated on 17 February as a document and you also have a second 
proposal, which was only just submitted to the Secretariat yesterday and is available in French and 
copies are available at the back of the room and I th ink you will find this particular proposal as indeed 
a lot more comprehensive than what you would have  seen on 17 February and I think that it very 
helpfully clarifies some of the things that you initia lly reacted to on 17 February and I think it is a 
paper that bears some very careful examination.  I think it is kind of interesting in a situation where 
people can be tempted to make ambit claims.  I do not  think this is a paper that is making an ambit 
claim in the pejorative sense of the word.  I think it is something therefore that is quite challenging to 
all of us and I know that the proponents themselves want to speak to that.  And in fact, I think 
probably the sensible thing to do, because this is th e part of the meeting where delegations can now 
take the floor having endure the chairman's interventi on, I think it probably would be helpful if I give 
the floor first to the correspondent of the Sector al Initiative on Cotton to present these two proposals. TN/AG/SCC/R/10 
Page 8  
 
  Annex 2
 
 
Statements at the Tenth Meeting of the Sub-Committee on Cotton held on 2 March 2006 
  
Agenda Item 2(A):  Assessment of Progress in the Agriculture Special Session
 
 
 
Statement by Australia  
 
 
 Australia noted that the new formula had clarif ied the workings of the proposal and recalled 
that Australia had previously supported in the ne gotiations the use of the period 1995-2000 as the base 
period for the calculation of AMS product-specific caps.  Australia also emphasised the strong link 
between progress in the agriculture negotiations as a w hole and that in cotton, and that in this context 
further progress was urgently needed in the broade r negotiations, including in the important area of 
market access.   TN/AG/SCC/R/10 
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  Statement by Chad  
on Behalf of the Co-sponsors of the Sectoral Initiative in Favour of Cotton  
 
 
 I should like to thank you for your introductory  presentation and for the assessment you have 
just given us of progress in the agricultu ral negotiations and the work on cotton. 
  Pursuant to the Hong Kong Ministerial Decisi on, we must speed up our discussions on cotton 
and arrive at comprehensive modalities on this vital issue by 30 April 2006. 
 
 This is why the co-sponsors of the Sectoral  Initiative in Favour of Cotton have prepared 
two (2) documents proposing modalities for consideration by Members.   You will recall these were the following documents:  
 - TN/AG/GEN/12; 
 - TN/AG/SCC/GEN/3 of 16 February 2006;  - TN/AG/SCC/GEN/4 of 1 March 2006.   The first document was submitted on 17 February 2006 to the Special Session of the Committee on Agriculture, and provided guidance on the reduction of domestic support for cotton in 
comparison with the reduction to be made in agriculture as a whole. 
  Pursuant to the mandate given in paragraph 11 of the Hong King Ministerial Declaration, we 
are proposing a higher level and a shorter time frame  for the reduction of domestic support for cotton 
in comparison with the reduction to be  made in domestic support for agriculture. 
 
 Members will find this formula in the second document circulated for today’s meeting.   This formula meets Members' expectations:   - It provides an ambitious result for co tton in the event of a modest result in 
agriculture; 
  - it imposes a higher level of ambition in the event of an ambitious result in agriculture;   - it is degressive in relation to the additi onal effort required for cotton based on the 
level of ambition of the result for agriculture in general. 
  The second part of this document contains proposals on how to deal with development 
assistance aspects of cotton, as recomme nded by the Ministers in Hong Kong. 
  We hope that action will be taken urgently to find effective solutions adapted to the cotton 
issue. TN/AG/SCC/R/10 
Page 10  
 
  Statement by China
 
   We would like to thank you for your non-exha ustive list of questions, especially those in 
respect of cotton which greatly facilitates our discuss ion here.  We would also like to thank the four 
Co-sponsors of the Sectoral Initiative in favour of Cott on for their proposals.  In particular, we want to 
thank the distinguished Ambassador of Chad for his introduction of the new proposal on behalf of the Cotton-four.  Our statement was originally based on Document GEN/3.  Just now, I tried my best to 
catch up with the new proposal document GEN/4.  I understand it is generally a further elaboration of 
GEN/3.  So basically we support the proposal as co ntained in document GEN/3.  And we call upon all 
members to give positive consideration to it. 
  Beside that, we also wish to  stress that for developing Memb ers, the production of cotton is 
vitally important for addressing the problems of  livelihood security, poverty alleviation and 
employment of farmers.  For these members, the leve l of domestic support, even if it does exist, is 
extremely low and targeted at subsistence, low-in come and resource-poor farmers only.  This support 
barely constitutes any distortion to international tr ade in cotton and therefore should be given special 
consideration.  In this regard, we would like to  recall that the Hong Kong Declaration already shed 
some light on this fact and stipulates that "Developing country Members with no AMS commitments will be exempt from reductions in de minimis and the overall cut in trade-distorting domestic 
support". 
 
 Of course, for more detailed comments, we will  have to wait for the English translation.  
I have a preliminary question, though, for the sake of seeking a clarification.  GEN/3 requests that 
"The level of reduction of domestic support for cott on shall be three times higher than that of the 
reductions to be made under what ever general formula is agreed for the reduction of domestic support 
in agriculture."  If my understanding is correct, acco rding to this proposal, if the reduction of domestic 
support in agriculture is higher than 33%, the re duction for cotton should be 100%.  While under the 
new proposal, where the coefficient (c) is introduced , the reduction for cotton as compared to that for 
agriculture is not as high as three times.  So what is the relationship between Rc as defined by the 
formula and "three times higher" as proposed in GEN/ 3?  Can we understand that three times higher is 
a high end, while Rc is only a low end?  And if the lower end is realized, we can accept to give up the 
higher one. 
  TN/AG/SCC/R/10 
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  Statement by Guinea  
  
 Let me begin by thanking you for the introduc tory statement you made a short while ago, 
which provided a clear picture of the status of th e negotiations in the Agriculture Special Session. 
 
 My gratitude also goes to our colleague from Chad, Ambassador Abbas, for his concise 
statement on the proposed elements for the reduction formula for domestic support for cotton, and to 
Ambassador Améhou of Benin for his statem ent on behalf of the WTO African Group. 
 
 After a long and painful gestation period and following the Decision adopted by the 
Hong Kong Ministerial Conference, in particular paragraph 11 thereof, we now have before us 
concrete modalities for the elimination of domestic support for cotton.   The document which has just been read to us  calls upon us to face up to our responsibilities 
and commits us to taking timely decisions that c ould breathe a new life into the African cotton sector, 
decisions that live up to the hopes of the populations who depend on cotton for their livelihood.   My country would like to congratulate the co-s ponsors of the Sectoral Initiative in Favour of 
Cotton for their wise, and yet pragmatic and realistic proposal, which it fully endorses. 
 TN/AG/SCC/R/10 
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  Statement by the New Zealand
 
  
New Zealand welcomes the Cotton Sectoral Initia tive group's efforts in putting together the 
proposals of 17 February and 1 March.  They provide a useful starting point for working toward a 
negotiated outcome. 
 We confirm the need for cotton to be addressed  ambitiously, expeditiously, and specifically, 
and the importance of finding a solution to this very serious issue. 
 
We are pleased with the progress made at Hong Kong on the early date for elimination of 
export subsidies on cotton;  duty free and quota free access for cotton from LDCs;  and deeper and 
faster reductions on trade-distorting domestic support for cotton. 
 We now need to address the remaining aspects of market access and domestic support, as well 
as the "aid track". 
 Given the agriculture negotiations context for th e cotton issue, we agree with the proponents 
that there is a link between the progress made in cotton, and in the wider agriculture negotiations 
 We support the authors' ultimate aim of eliminating all
 trade distortions on cotton.  We 
believe that this should be the long-term goal of the WTO for all agricultural products, and especially 
those of interest to developing countries. 
 We also recognise the importance of the aid tr ack in finding a satisfactory solution to the 
cotton problem.  We support the work of the multilate ral institutions and donor countries to that end.  TN/AG/SCC/R/10 
 Page 13 
 
 
  Statement by Paraguay  
   Very briefly, I would like to thank the delegati ons that drafted this proposal, and in particular 
the Ambassador of Chad for his clear explanation of the document.  The fact is that my delegation has 
not yet had the opportunity to examine the proposal in depth.  As a country with a small and 
vulnerable economy largely based on the production and exportation of cotton, Paraguay clearly 
welcomes the proposal, which is certain to speed up th e process of eliminating subsidies in this sector. 
  My thanks go once again to the dele gations that submitted this proposal. 
 
 TN/AG/SCC/R/10 
Page 14  
 
  Statement by the United States
 
   Significant progress was made on the cotton issues in Hong Kong.  We ha ve an end-date on 
cotton export subsidies, duty-free, quota-free access for cotton originating in least-developed 
countries (LDCs), and strong political commitment  on how domestic support for cotton should be 
addressed.   The United States cannot engage on the latest  C-4 domestic support proposals on cotton until 
we know the level of ambition of the overall agri cultural negotiations.  We note that the latest 
document just came out and we will give it review.  It has been agreed all along that cotton must be 
addressed within the agriculture negotiations and in all three pillars in order to achieve the desired 
outcome.   The United States wants the Doha Round to succee d.  The key to any further movement on 
cotton depends on serious movement taking place in  the market access pilla r of the agricultural 
negotiations. Overall benefits will not  be achieved without ambitious reform in all three pillars.  All 
the good that was achieved in Hong  Kong will be in serious jeopardy if we do not accompany those 
achievements with an ambitious and balanced ove rall package, including market access.  We are 
committed to reaching ambitious and balanced m odalities by the end of April deadline and are 
working intensively with our WTO partners to reach that goal.  TN/AG/SCC/R/10 
 Page 15 
 
 
  Annex 3  
 
Statements at the Tenth Meeting of the Sub-Committee on Cotton held on 2 March 2006 
 
 
Agenda Item 2(B):  Coherence Between Trade and Development Aspects:  
Update on the Development Aspects of Cotton  
 
 
Statement by the Secretariat  
 
 
1. The Director-General's Informal Consu ltative Framework (CF) process on Cotton 
Development Assistance convened in a 6th Round of Consultations, on 16 February 2006.  This first 
round of consultations after the Hong Kong Minister ial, was chaired by Mr. Stuart Harbinson. 
2. The consultations followed up to the mandates in  paragraph 1.b and pa ragraph 5 of Annex A 
of the 2004 July Framework Decision, and paragra ph 12 of the Hong Kong Ministerial Declaration.  
The consultations were technically focused on th e "revised working copy" of the Table on cotton 
development assistance, originally annexed to th e Director-General's Second Periodic Report.  
Participants interacted intensively.  Participants: 
• undertook  a first-stage "verification" exercise of the ac tual contributions, as reflected in the Table;  
• noted  the general reports from bilateral donors, mu ltilateral and regional ins titutions on "state of 
implementation and disbursements to date";  
• noted  the reports from cotton proponents on "domes tic cotton-sector reforms, projects submitted 
for funding and coordination efforts"; and also 
• noted  the report from the representative of the OE CD Secretariat on the WTO/OECD DDA Trade 
Capacity Building Database. 
3. The consultations were indicative of con tinued progress in the implementation of the 
mandates on cotton development assistance.  They we re of practical use in providing guidance to the 
Secretariat in several respects.  The Secretaria t was encouraged by the strong unanimous support 
received from the development community on its efforts to mobilize assistance for the cotton 
proponents and to the priority accorded to actual im plementation and disbursements.  Participants, in 
particular, welcomed the continuing efforts of the Director-General. 
I. VERIFICATION OF ENTRIES  
The Development Community:  Bilateral Donors  
 4. The development community verified its entries in the "revised working Table on Cotton 
Development Assistance".  It also provided updates to prior entries. 
5. The EC and the US reported notable updates on their cotton developmen t assistance.  Japan 
reported and clarified elements of its assistance programmes. Germany, France and the Netherlands provided supplementary updates to the report by the EC.  Collectively, the bilateral donors considered 
the compilation as "necessary".  They assessed Secretar iat efforts as "very useful and a very good 
start".  They also offered useful guidance on impr ovements to the current format of the "revised TN/AG/SCC/R/10 
Page 16  
 
  working copy" of the Table so as to avoid overlap, improve focus on implementation, and refine the 
format for the presentation of status reports. 
6. The EC reaffirmed the "EU-Africa Cotton Partne rship" as the basis of its cotton development 
assistance.  Under the EU-ACP All Capacity Buildi ng Programme, valued at €45 million, €15 million 
had been earmarked for cotton.  In response to S ecretariat information on general budget support, the 
EC undertook to forward this information at a late r stage for individual countries.  The EC informed 
participants that its "... macroeconomic support was quite significant".  Updated implementation 
reports were also provided by other EC memb ers (Germany, France and the Netherlands). 
7. The United States reported significant updates on its cotton development assistance for 
individual proponents.  It underlined strong commitments to several cotton-producing countries in 
Africa, particularly Benin, Burkina Faso, Chad, Ma li and Senegal, through a variety of approaches, 
including West African regional assistance, country -specific assistance, and Africa-wide assistance. 
Participants were informed of the newly anno unced West Africa Cotton Improvement Programme 
(WACIP) valued at US$ 7 million for the improvement  of production, transformation, and marketing; 
US$ 9.5 million in ECOWAS support; and the approval of the Compact with Benin on 
30 January 2006, under the Mille nnium Challenge Corporation (MCC) Programme valued at 
US$ 307 million.  The US was also working with other cotton proponents on their proposals and Compacts.  Participants were provided with upda tes on specific and relevant programmes such as 
those of the Overseas Private I nvestment Corporation (OPIC), the Citibank Africa Facility, the 
EMP Africa Infrastructure Fund, and capacity building activities in the areas of biotechnology, entomology, management, and agricultural best pract ices.  The US provided additional information on 
its new "African Global Competitiveness Initia tive", operating through "Trade Hubs". 
8. Japan clarified that all its entries had a bear ing on cotton, and endorsed the approach by the 
Secretariat. 
9. The WTO Secretariat drew attention to significant revised entries from the IMF, reflecting 
value-based calculations resulting from the Multilate ral Debt Relief Initiative (MDRI).  It was noted 
that financial resources from multilateral debt relief were available to receiving countries to apply to 
autonomously determined economic priority sectors, such as cotton. 
10. In concluding the verification exercise, it was understood that: 
• the Secretariat would create a "status column " in the "revised working Table on Cotton 
Development Assistance" to show the state of operational implementation and, "time duration of 
projects"
2; 
• donors and agencies would forward to the Secretaria t detailed reports of ope rational state-of-play; 
• reports from the development community would be  compiled by the Secretariat and routinely 
circulated, as addenda to the Periodic Report(s) by the Director-General; and 
• revisions to the Table on Cotton Developmen t Assistance would be work in progress. 
                                                      
2 To describe the state of implementation of activ ities, the Secretariat has created four operational 
categories, namely:  C for "completed"; IP for "in progress"; S for "suspended"; and D for "discontinued".  The time duration for programmes and projects will be expresse d in the body of the Director-General's periodic 
reports.  TN/AG/SCC/R/10 
 Page 17 
 
 
  II. IMPLEMENTATION/ACTUAL DISBURSEMENTS  
11. Bilateral donors responded to Secretariat requ ests for implementation details and actual 
disbursements in respect of cotton programmes and projects.  They drew attention to the evolving 
degree of details involved and, in doing so, u ndertook to forward operational reports to the 
Secretariat, as appropriate. 
12. Three specific points were highlighted for l onger-term programming and planning, under this 
item: 
(a) The EU invited the cotton proponents and other African countries to immediately 
forward their development priorities, for cotton or any other priority, so that they could be taken into account in the on-goi ng preparations for the next programming 
cycle of the European Development Fund (EDF), for the period 2008-20303. 
(b) Japan reminded participants of its "Dev elopment Initiative, including for cotton-
dependent countries", announced shortl y before the Hong Kong Ministerial 
Conference.  Cotton proponents were reminde d that Japan's "new survey for the next 
fiscal year should be completed by July 2006" .  Japan urged recipients to enter into 
dialogue and to channel their priority need s to officials at Jap anese Embassies before 
the end of July 2006, so that they could be taken into account in Japan's development 
planning for the next fiscal cycle.  
(c) UNIDO announced that it had added two mo re countries (Guinea-Bissau and Niger) 
to its African Cotton Initiative, bringing the total number of beneficiary countries, in this first stage, to eleven4. 
Response of the Cotton Proponents and Others 
 
 
13. The cotton proponents (Benin, Burkina Faso, Chad and Mali) and others (Zambia and 
Côte d'Ivoire) welcomed the reports from the deve lopment community.  They gave strong support to 
the reported implementation action.  The propone nts noted "an increase in the level of energy 
employed" by the development community and the WT O Secretariat.  They expressed the hope that 
like assistance would be extended to other deserving African countries in similar need.  They noted 
that they would need to "relate the reported figures in the programmes and projects to their individual 
country situations".  Several were awaiting feedback from their capitals. 
III. DOMESTIC COTTON SECTOR REFORM – PROPONENTS' REPORTS  
14. Proponents provided reports, at various levels of precision, on their domestic cotton sector 
reform.  Benin reported on the process of the priv atization of the monopoly SONAPRA.  It pointed to 
several planned activities, including the establishment of  "a reserve fund for producers".  It concluded 
that domestic reform would only work more effectiv ely with the elimination of trade distortions.  
Mali reported on a wide-ranging structural reform programme with the Bretton Woods Institutions 
currently underway.  Participants were inform ed that the cotton monopoly would be privatized 
in 2008.  Chad reported on "a road map for domest ic reform in the cotton sector", which was also 
underway.  Elements of the on-going reform in Chad included privatization, a more aggressive 
marketing, and a single price for seed cotton.  Bu rkina Faso reported privatization which was on-
                                                      
3 The EDF is the main vehicle for European Deve lopment Assistance.  Programming takes place on the 
basis of expressed priorities by aid recipients, and 2006 is  the year for programming priorities in the next cycle. 
4 Benin, Burkina Faso, Cameroon, Chad, Côte d'Ivoi re, Guinea-Bissau, Mali, Niger, Nigeria, Senegal 
and Togo. TN/AG/SCC/R/10 
Page 18  
 
  going.  SOFITEX no longer held monopoly sway in  the cotton sector, since the emergence of 
two other competitors, operating in the areas of co tton cultivation and management.  Côte d'Ivoire 
gave notice of privatization and reform.  All the reporters undertook to forwar d detailed statements to 
the Secretariat. 
15. Benin (on behalf of the proponents) enquire d as to how the Secretariat "envisaged" the 
implementation of the Ministerial Mandate to the DG to establish a follow-up mechanism for 
coherence between the trade policy and the deve lopment assistance aspects of cotton; and the 
"exploration" of a mechanism in respect of inco me declines in the cotton sector.  The Secretariat 
responded that the DG was intensively seized with  these matters in reflection and consultations. 
IV. WTO/OECD DDA TRADE CAPACITY BUILDING DATABASE 
16. The representative of the OECD Secretariat reporte d on the state of the Cotton Section/Box in 
the Database.  The development community was urge d to improve the quality, precision and clarity of 
its entries to the Database in respect of cotton programmes. 
V. CONCLUSION 
17. The consultations manifested a qualitatively higher technical focus.  The information 
exchange showed that implementation was evolvi ng positively, although there was scope for progress.  
The revised working Table emerged as a tool fo r the effective delivery of cotton development 
assistance for those who needed it.  It was underst ood that future consultations would evolve along 
these technical lines, focusing on the implementation of actual programmes and projects.  TN/AG/SCC/R/10 
 Page 19 
 
 
  Statement by Chad  
 
  I should first like to thank and congratulate Di rector Osakwe for having introduced and given 
a full assessment of the meeting of 16 February 2006. 
 
 Our meeting was indeed fruitful because of the following:    - Broad and encouraging participation;  
  - new announcements from bilateral and mu ltilateral partners on contributions and the 
intention to provide technical and financ ial support for Africa’s cotton subsector, as 
well as new announcements on  financing of projects. 
  We have made recommendations to improve the presentation of the summary table of 
development aid, inter alia , by describing the situation of projects already implemented or being 
implemented, the announcements made and the disbursements effected, etc. 
  African cotton-producing countries have undertak en to pursue reform in this sector for the 
benefit of producers.  
 We would like to thank Ambassador Stuart  Harbinson and Director Chiedu Osakwe very 
sincerely for their effective follow-up work.  
 
__________