RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/AG/SCC/R/11 
6 October 2006 
 (06-4823) 
Sub-Committee on Cotton  
 
 
 
 
SUMMARY REPORT ON THE ELEVENTH  MEETING OF THE SUB-COMMITTEE 
ON COTTON HELD ON 27 MARCH 2006 
 
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 eleventh m eeting on 27 March 2006 under the chairmanship of 
Ambassador Crawford Fa lconer of New Zealand. 
2. The agenda as contained in WTO/AIR/2782 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. Benin, on behalf of the African Group, thanke d the Chairman for his introductory comments 
(see Annex 1) and congratulated the Ambassador of Chad for his presentation on the state of play 
regarding the cotton issue (see Annex 2, Item 2(A)).   Benin recalled that in July 2004, it had been 
decided that cotton would be dealt with ambitious ly and specifically and that Ministers had echoed 
that mandate in paragraphs 11 and 12 of the Hong  Kong Declaration.  In February 2006, Members 
had started out along a path towards finding a solu tion;  a solution which had to be implemented if 
Members were actually to achieve the level of am bition desired by Ministers in Hong Kong.  In 
Benin's view, that was why the recent proposal by the Co-sponsors of the Sectoral Initiative in favour 
of Cotton ("Cotton-Four") (TN/AG/SCC/GEN/4 refers ) had been made, and it applied to the AMS, 
the Blue Box and de minimis  support.  Finally, Benin stated that the African Group wholeheartedly 
supported the statement made by Chad (see Annex 2, Item 2(A)). 
5. The representative of the European Communities stated that the European Communities had 
already had the opportunity to comment on the "Cotton-Four" proposal (TN/AG/SCC/GEN/4 refers) 
at the meeting of the Sub-Committee on 2 March.  And, as stated then, the European Communities 
welcomed the proposal because it w as key to getting down to specifics in order to define Members 
actions with regard to cotton based on the mandate  they had received from Ministers.  The proposal 
                                                      
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/11 
Page 2  
 
  covered two areas.  One concerned all aspects conn ected to trade, and the other area dealt with 
development aspects. 
6. Relating to the trade aspects, the representativ e of the European Communities recalled that 
both the July Framework and the Hong Kong Declar ation had confirmed that cotton had to be 
addressed more ambitiously in the context of the nego tiations on agriculture.  It was also clear that the 
interdependence between cotton and the rest of the agriculture negotiations c ould not be overlooked.  
Regarding the formula proposed by the "Cotton-Fo ur" for reducing Amber Box support for cotton, the 
representative of the European Communities noted that  the new proposal tabled by the "Cotton-Four" 
had clarified the numbers contained in their in itial proposal of 17 February 2006 (TN/AG/GEN/12 
refers).  Paragraph 8 of the ne w proposal clearly set out how the proposed formula for reduction of 
Amber Box support for cotton would work.  For exam ple, a general reduction of 60 per cent on AMS 
would result in an 82 per cent reduction for cotto n.  The representative of the European Communities 
also noted that the formula was devised in such a way that the higher the general reduction, the lower 
the difference between the reduction fo r cotton and the general reduction. 
7. The representative of the Europ ean Communities stated that th e European Communities could 
in principle agree with the proposal.  Indeed, th e European Communities had already proposed in 
2005 a complete elimination of Amber Box support fo r cotton.  On the issue of the base period, the 
European Communities also stated its agreement with the "Cotton-F our" proposal to take the period 
from 1995 to 2000, in other words the period of implementation of the Uruguay Round.  More specifically, the European Communities questioned th e date of 31 March 2006 put forward by the 
"Cotton-Four" as the deadline for establishing m odalities for cotton.  The European Communities 
believed that the date should have read 30 Apri l, the same deadline as that for full modalities in 
agriculture, and requested a clarification from the "Cotton-Four". 
8. Concerning the proposal that the Blue Box cap for cotton be one third of the "general" 
Blue Box cap, the representative of the European  Communities stressed ag ain the very strong 
interdependence between cotton and agriculture in general, and recalled the very complex discussions 
which had recently taken place on the Blue Box, covering both the "new" and the "old" Blue Box.  
There were measures with historic payments and m easures without historic payments, etc and also a 
lot of scenarios had been discussed in that rega rd and the European Communities believed that it 
would be very difficult to reach a decision at th at stage, on the matter.  The representative of the 
European Communities believed therefore, that there had to be more clarity in the general discussions 
and in the "Cotton-Four" proposal before taking a stand on that particular point. 
9. The representative of the European  Communities also recalled that the July Framework stated 
that for cotton, solutions had to be found under th e three pillars of agriculture, whereas the proposal 
tabled by the "Cotton-Four" mentioned only one pillar – Domestic Support.  Furthermore, in 
Hong Kong, Ministers had decided that by the end of 2006, all forms of export subsidies should be 
eliminated.  As to market access, duty-free mark et access was to be granted by the developed 
countries to the LDCs cotton exports.  The represen tative of the European Communities recalled that, 
as mentioned by Benin on behalf of the African Gr oup, 33 African countries produced cotton, and not 
all of them were LDCs although they faced very similar problems to those of LDCs which produced 
and exported cotton.  The European Communities wi shed to suggest, therefore, extending the duty-
free quota-free market access not only to LDCs but to all cotton producing developing countries, and 
the access should be made available in particular  by all developed Members and those developing 
countries which are in a position to do so. 
10. Paraguay noted that it had carefully examined th e proposal submitted by the "Cotton-Four" at 
the meeting of the Sub-Committee on 2 March, and that  it wanted to reiterate its congratulations and 
thanks to the four African cotton-producing countri es for their proposal.  Indeed, Paraguay, a country 
with a small and vulnerable economy and a cotton producer, was encounteri ng similar economic and 
social problems to those faced by the "Cotton-Four",  and fully associated itself with their proposal.   TN/AG/SCC/R/11 
 Page 3 
 
 
  Paraguay believed that the formula presented in the proposal, would benefit not only African cotton 
producing developing countries, but it would also affect other countries which faced similar 
situations.  Paraguay also welcomed the suggesti on by the European Communities of extending the 
possible scope of the benefits of the formula to other cotton producing developing countries. 
11. The representative of Chad thanked the various delegations that had taken the floor on the 
proposal he had just presented on behalf of the "Cotton-Four" (TN/AG/SCC/GEN/4 refers).  Chad 
noted that there had been more comments than questions, and that it, along with the other "Cotton-Four", was most appreciative, particularly to the delegation of the European Communities for its very 
specific and detailed contributions.  The representati ve of Chad offered comments and clarifications 
with regard to some of the queries raised followi ng his presentation of the proposal.  Regarding the 
date of 31 March 2006 mentioned in  paragraph 15, Chad confirmed that this date was purposely 
proposed to reflect the need for earlier modalities for cotton than for agriculture in general. 
12. On the issue of the Blue Box, Chad noted that the "Cotton-Four" were preparing additional 
criteria relating to the Blue Box and cotton, in line w ith the specificity conferred to cotton, both in the 
Framework Agreement of July 2004 and in the H ong Kong Declaration.  While the "Cotton-Four" 
agreed that the solution for cotton would depend on the outcome of the agriculture negotiations, they 
wished, in submitting proposed modalities for cotton, to contribute to both the work on agriculture 
and that on cotton.  The "Cotton-Four" were theref ore grateful to the various delegations which had 
made comments along the same lines.  Chad also welcomed the comments made by the 
European Communities regarding additional crit eria, in particular on export subsidies and 
market access, and reiterated that the "Cotton-Fo ur" were willing to work with other Members in 
order to fine tune and improve their proposals. 
13. Turning to China's questions on trade-distorti ng domestic support for cotton, Chad noted that 
both the Agreement on Agriculture and the Agr eement on Subsidies and Countervailing Measures 
focussed on such support, which was recognized as having a distorting effect on cotton trade.  Chad believed that the "Cotton-Four" had covere d the Blue Box, the Amber Box, and the de minimis clause  
in their proposal and announced that they would al so soon propose modalities to avert box-shifting.  
In concluding, Chad thanked for their constant support Paraguay and Cuba which had, as always, 
backed the "Cotton-Four" proposal, as well as Colombia. 
14. Benin also thanked all the dele gations which had taken the floor on the issues covered in the 
"Cotton-Four" 's proposal.  As coordinator of the A frican Group, Benin wished to point out that views 
previously expressed in various discussions of the Sub-Committee had been repeated by other 
delegations such as Colombia.  The representative of Benin stated that he had not realized that the 
situation in Colombia was similar to that of Ar gentina or Paraguay, formerly major cotton producing 
and exporting countries which had progressively become net importers of cotton.  Benin stressed that, 
as had been previously stated in the Sub-Comm ittee, if no action was taken, cotton would also 
disappear from Africa's economies a nd the continent would become a ne t importer.  Therefore, Benin 
wished to thank all the delegations which had su pported the "Cotton-Four" 's proposal which was 
relevant, not only to the African continent, but to all developing countries which suffered from the 
high levels of support granted by  developed countries to their cotton growers.  Regarding the 
comment by the European Communities on the three pillars of the agriculture negotiations, Benin 
noted that, even if it had not been their intenti on, the three pillars had been touched upon in the 
proposal by the "Cotton-Four".  For instance, looking at the outcome of Hong Kong, it was clear that 
market access had been addressed and, in that  context, the "Cotton-Four" welcomed the 
European Communities proposal to extend the duty -free, quota-free access to all cotton exporting 
developing countries.  Furthermore, and echoing Chad, Benin noted that the "Cotton-Four" were 
willing to continue to negotiate in order to fine -tune solutions for duty-free and quota-free access for 
cotton to the markets of all developed countries and of those developing countries in a position to 
follow suit. TN/AG/SCC/R/11 
Page 4  
 
  15. Benin recalled that the export competition p illar had also been settled in Hong Kong.  
Therefore, the most important item that had still to be  dealt with was the domest ic support pillar.  That 
was why the proposal tabled by the "Cotton-Four " had focussed on domestic support.  As to the 
proposal by the United States, Benin believed that there was no incompatibility with the proposal by the "Cotton-Four".  Indeed, at Hong Kong, Minister s had clearly defined the relationship between the 
overall outcome for agriculture and the outcome for co tton.  Benin stressed that in their proposal the 
"Cotton-Four" had first looked at the overall outcome  for agriculture which would influence, or lead 
to, results on cotton and, therefore, the "Cotton-Four" had not put the cart before the horse.  On the contrary, they had respected the decision made by Mini sters at Hong Kong, both in letter and in spirit.  
Benin therefore hoped that as other Members, th e United States, given the negotiating spirit it had 
displayed so far, would work with the "Cotton-Four " and the proposal they had tabled, in order to 
make progress and find a solution as rapidly as possible to the long-standing problem of cotton. 
16. The representative of Brazil stated that Brazil supported the proposal tabled by the "Cotton-
Four" regarding reductions in Blue Box support as well as the AMS for cotton.  Brazil also agreed with the suggestion of including in the proposal meas ures relating to all three pillars of the agriculture 
negotiations. 
17. Statements made by the following delegations  were forwarded to the Secretariat and are 
attached to this summary repor t:  Burkina Faso, Chad, Chin a, Colombia (circulated as 
TN/AG/SCC/GEN/5), Cuba, Nigeria and the United States (see Annex 2). 
I
TEM B:  COHERENCE BETWEEN TRADE AND DEVELOPMENT ASPECTS : UPDATE ON THE 
DEVELOPMENT ASPECTS  
18. 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 
19. On behalf of the WTO Secretariat, Mr. Chiedu Osakwe updated the Sub-Committee on the 
development aspects of cotton. 
20. The statement made by the Secretariat has been circulated as document TN/AG/SCC/W/6 and 
is also attached to this report (see Annex 3). 
(ii) Statements by Observer Internationa l Intergovernmental Organizations 
21. There were no statements by Observer Inte rnational Intergovernmental Organizations. 
(iii) Statements by Members 
22. The statements made by Burkina Faso and Chad  are attached to this report (see Annex 3). 
23. Benin recalled that it had submitted 12 projects to the Secretariat but that it was under the 
impression that those projects had not been processed by Members and development partners.  Benin therefore asked that Mr. Osakwe, on behalf of the Secretariat, follow the matter up with the parties 
concerned in order to revive those 12 projects whic h had been already circulated in the three WTO 
official languages. 
24. In response to the concerns raised by Benin, Mr. Osakwe stated that as per Benin's request, 
the Secretariat would re-circulate, after the meeting, the 12 projects that it had circulated earlier.  Mr. Osakwe also added, for the record, that at the last Round of consultations on the development  TN/AG/SCC/R/11 
 Page 5 
 
 
  aspects of cotton, before the Hong Kong Ministerial meeting, the United States, when making its 
presentation on the development aspects of cotton, ha d specifically referred to a number of elements 
relating to the 12 projects submitted by Benin.  The United States had also reported, at the tenth 
meeting of the Sub-Committee on 2 March 2006, that it had approved on the 31 January 2006, an aid 
package of 300 million US dollars. 
25. Mr. Osakwe also followed up on the reference by Chad, in its statement (see Annex 3), to the 
mandate given to the Director-General in pa ragraph 12 of the Hong Kong Declaration which 
included:  (i) for the Director-General to intens ify his consultative efforts with the development 
community and (ii) for the Director-General to e xplore with multilateral institutions the possibility of 
establishing a mechanism to deal with income declin es in the cotton sector.  Mr. Osakwe, on behalf of 
the Secretariat, repeated previous reports made to the Sub-Committee that the Director-General was 
fully seized with the matter and that he had b een consulting with the International Financial 
Institutions.  Also, under the Director-General's Co nsultative Framework chaired by Mr. Harbinson, 
Mr. Osakwe noted that the European Communities had reported on the significant macroeconomic budgetary support it provided to cotton and related i ssues, and that the Secretariat would be following 
up on that support in future consultations. 
26. Finally, Mr. Osakwe noted with regards to th e point by Chad on paragraph 23 of the proposal 
by the "Cotton-Four" (TN/AG/SCC/GEN/4 refers), th at that proposal was part of proposed modalities 
for cotton, and was for the Membership, not for th e Director-General, to address.  However, the 
Director-General would of course be pursuing, as he had already been very actively doing, his mandate contained in paragra ph 12 of the Hong Kong declaration, namely to intensify his 
consultations and explore the possibility of establishi ng a mechanism to deal w ith income declines in 
the cotton sector. 
27. 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 Or ganizations to the discussion on the development-related aspects of 
cotton. 
28. 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  
29. Benin invited Members of the Sub-Committee, the Chairman, and the Secretariat, to a "soirée 
coton" to be held on the evening of 28 March 2006, jointly organized by the African Union and the 
Geneva Missions of the "Cotton-Four.  
Dates of the Next Meetings 
30. The Chairman announced that the next m eeting of the Sub-Committee was tentatively 
scheduled for 24 April 2006. 
Chairman's Report to the Special S ession of the Committee on Agriculture 
31. 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/11 
Page 6  
 
  Annex 1
 
 
Statement by Ambassador Crawford Falconer of New Zealand 
at the Eleventh Meeting of the Sub-Committee on Cotton held on 27 March 2006 
 
 
Agenda Item 2(A):  Assessment of Progress in the Agriculture Special Session  
   I will try and give a very brief assessment of wher e we are.  It has not been that long since our 
last session.  We have had one basically last week.  Of course, we had the Sp ecial Session meeting.  
I do not intend to repeat everything that I said in  the summing up on that on Friday, not because it 
does not represent my summing up, but simply because I think most of you have heard it.  All and all 
I felt that there was perhaps an even more genuine e ngagement in the meetings that we had last week 
on agriculture, on several issues that I had identified th at we were to spend our time specifically on.  
I felt that we had a particularly productive discussi on on Food Aid facilitated by the paper prepared by 
the African and LDCs groups.  And I thought that it was interesting, both because the paper itself had 
clearly the quality that attracted a lot of attenti on and I think helped move our process forward, and it 
proved that you could, even on the informal ope n-ended sessions, have a ge nuine engaged discussion 
on the issue.  And as I said in the meeting, I felt that we had as good a discussion, probably a better discussion on Food Aid, in comparison to other issues in that open-ended format, that we have had in 
many more restrictive formats.  So  I thought that was very positive. 
  On Export Credits we have had some discussion,  on a couple of ideas that have come onto the 
table, by no means decisive, but it was an indicati on of delegates trying to resolve the issue and the 
need to make some degree of compromises there. 
 
 On Market Access, and more specifically on Sensitive Products, there was I think some effort 
on the part of delegations to at  least acknowledge that, regarding their respective well entrenched 
positions, that at the lower end of the spectrum as it were and on the higher end, people were prepared 
at least to start thinking about ways to adjust their preferred positions so that the outcome was 
manageable at one end in order to ensure there wa s something that was commercially interesting, at 
the other end to make sure it did not actually end up  being incompatible with the concept of sensitive 
products' degree of access that was created.  But of course we have that large area in the middle.  I think there is perhaps a sense among an increasi ng number of delegations that some sort of 
pragmatic adjustment might be needed. 
 
 We had on the Special Safeguard Mechanism for developing countries I think quite a gloves 
off discussion, which was helpful and was not exactly barnacled, but it was quite useful to have a very 
frank and open discussion, and the G-33s revised pape r facilitated that.  I think some pretty detailed 
interventions from delegations led off by Uruguay also  helped that process.  So I thought that was an 
engaged discussion.  I do not think it has by any mean s resolved things but I think it has cleared the 
air considerably about what expectations people have  and the sort of degree  of political understanding 
that is present as well, which is constructive.  Th e situation was very similar for Special Products, 
with less perhaps discussion on that than there w as in the informal consultations that I had. 
  On the Blue Box discussion, there was I think a pretty general feeling that nobody wants to see over-concentration or eccentric concentration on pr oducts in the blue box.  There is a recognition 
that that should not happen.  I think there is al so a fairly general appreciation that reducing the 
financial ceiling below five per cent is probably th e most effective way to apply disciplines, but 
nobody is ready to see that yet as being sufficient in itself and there is the need to find some kind of 
way of ensuring that there is not over-concentrati on in products even if they might be less money 
basically available to slosh around in the first place.  On product-specific AMS caps, I do not see  TN/AG/SCC/R/11 
 Page 7 
 
 
  anything new really there at all in the discussi on and we still have some fairly well entrenched 
positions on all of that.   So overall, I thought discussions were reasonably constructive but that we still are a very long 
way from doing what we need to do because we did not really seriously engage in any of the numbers 
in that process, because people do no t feel they are able to do so.  And that remains a problem.  If 
I was to try and characterize all these elements, I would say that on Domestic Support I kind of feel that what we have is a telecoms network situa tion where basically the b ackbone for the telecoms 
network is in place, the cables are in the street but the last nine yards are not into the houses yet and 
nothing works unless you actually cable into the houses in order to get the access to the network.  So 
even though that is all out there, it is those last nine yards that does still very much needs to be done. 
  On the Export Competition pillar, I still do believe that we can put that deal together.  I think 
it is implicitly there.  There is still quite a wa y to go on issues like STEs and Export Credits and 
Food Aid.  I think that you can see the outlines of 95 % or 85% of the Safe B ox on Food Aid.  I think 
it is probably a bit harder still outside the Safe Box but  it is just as important to do it but it is probably 
harder at the moment to see where that one is ultim ately resolved in.  On STEs I think there are three 
or four political decisions that have to be made.  I do not see that as an overly technical question, they 
are largely political questions one way or the other.  In Export Credits, I think there are some pretty 
core decisions that have to be made which are act ually more about numbers th an about legal text, but 
we still have to clarify that to some extent. 
 
 And on Market Access, I suppose this is kind of  like we are building the motorway down both 
sides of the river mouth but in actual fact, we do not  have the bridge across the river mouth yet, which 
kind of make the rest of the motorway a bit redu ndant and we are corralling about whether we want to 
have a suspension bridge or a pillar structure.  We do not have to figure whether it is a four lane or six 
lane or eight lane bridge.  But there is all that matte r that has to be resolved of getting from one side of 
the harbor to the other.   And that is pretty much where I think we are at  the moment and fortunate ly we have plenty of 
time to the end of April to resolve all of that and of course all of that is actually essential to resolving 
cotton among other things because where we end up on product-specific AMS, where we end up on 
overall cut, where we end up on the Blue Box, all of that is of course indicative and not exhaustive of 
what we can do on cotton, as far as Domestic Support in concerned.   So, so much for the Chairman's  summary.  That is pretty much where I think we are.  And I 
myself have said that I would try and do some refere nce papers to hopefully assist the process.  I did 
say that I think on Food Aid, that in many ways, I would find it very difficult to imagine that I can 
write a paper that was more constructive at this poi nt in the process than what the African and LDCs 
Groups have done on Food Aid at this point.  But I will try and do my best to see if I can provide some kind of supplementary comments to help refl ection around that document to move us forward. 
  And very much the same on the Green Box.  I think we have the G-20 proposal on how to 
deal with the Green Box.  That is clearly not going to  be on itself the basis for a deal but it is a form of 
textual approach which we need to resolve and I think we need to reflect on providing a degree of 
commentary that will able us to have a reference point to try and advance that particular issue. 
  Same approach for the SSM, de facto the G-33 proposal on SSM has been the focus of 
discussions.  It is not agreed by any means.  In fact  it was clear from last week that there are lots of 
areas where they are quite deep disagreements.  Bu t there is also a degree of political convergence on 
objectives, which nobody seems to have a problem with, and I will try and do my best to help 
elucidate that in some form.  TN/AG/SCC/R/11 
Page 8  
 
   Regarding STEs and Export Credits of less th an 180 days, I am not convinced that, as I said 
to you, that those are textually terribly complicated, perhaps more on the Export Credit case, but I will 
try and find some way of focusing the minds on the decisions that need to be made in both areas. 
  And on the Blue Box, I am still reflecting a bit on what if anything I could do that was useful 
as opposed to counter-productive.  But I felt that we have seen a degree a clarificatory progress in the 
course of the week, and that it will be useful to try and reflect in some way, and hopefully I will do 
that so that you have something to help you when we meet again in the week of the 18
th, as far as the 
Agriculture Week is generally concerned.  And I wa nt to think a little bit more myself about what if 
anything else I would want to add to that and I mi ght, in my report to the TNC tomorrow, think a little 
bit more about that. 
  So that is where I see things.  I do not thi nk that a number of Reference Papers from me on 
the kind of issues that I have foreshadowed is going to be sufficient to get us to where we need to be 
by the end of April, far from it.  I kind of f eel without being overly critical about it that, doing 
Reference Papers on these issues is a bit like prov iding a bit of coaching assistance to the reserve 
team, and it is not the main team ga me.  But we know that we have to  do that and we have to do that 
here in order to achieve resu lts, and keep the fans happy. 
 
 Just to say by way of final comment, it is obvious to me that in terms of where we are in the 
rest of the negotiation, we do have to do produc t-specific AMSs caps, at least in the general 
negotiation.  It is clear also from the framework te xt that it is envisaged that there will be some 
reductions in product-specific support in the context of  the overall reductions in AMS.  It does not say 
that it will be cotton but it is pretty hard to imagin e that if you are doing s ubstantial reductions overall 
and we have a priority to cotton, I think you can draw your own conclusions about the irony of 
whether there will be reductions on product-speci fic support in AMS for some products but not on 
cotton, but I leave that thought with you. 
  And the second thing is that, as far as the Blue  Box is concerned, you have in front of you a 
proposal from the cotton producers on the Blue Box.   You know there has been quite a lot of 
discussion about how far down for instance the new Bl ue Box or the old Blue Box or both should go 
in terms of an overall cut.  I mean there is a certain  irony if one takes the position that for cotton there 
should end up being a cut which is in effect much deeper in a proportional sense.  I am sure none of 
the negotiating partners are going to take that appro ach but I would hope that all of us would bear in 
mind on this one that what matters is actually what  the absolute level would be as it would affect 
cotton.  And I think it is worth underlining something that perhaps I did not underline as well as I should have in my opening remarks. 
 
 I do have the sense that although there are sh arp differences still on how you deal with the 
Blue Box, I did get the sense that there was no real disagreement in the more general process on 
agriculture, that there was no desire to find that if you did have a shrinking ceiling on Blue, then 
nobody wanted to have in principle undue concentrati on on anything.  I know that falls well short of 
what Benin, Chad and others are seeking there a nd I am not going to say that the process has moved 
to a more positive situation than it has,  but at least it seems to me that it is in itself a step in a direction 
in principle which is not totally discouraging at this point.  Obviously from the point of view of the cotton proponents, they would be looking for something much more significant than just a complete blank box.  I do not want to be over-stressing but I think both things are also positive and worth 
bearing in mind that we still have a long way to go but we are at least making an effort. 
 
  TN/AG/SCC/R/11 
 Page 9 
 
 
  Annex 2  
 
Statements at the Eleventh Meeting of the Sub-Committee on Cotton held on 27 March 2006 
  
Agenda Item 2(A):  Assessment of Progress in the Agriculture Special Session
 
 
 
Statement by Burkina Faso  
 
 
 I wish to make a point of thanking the Ambass ador of Chad for the statement he made on 
behalf of the four co-sponsors of the Sectoral In itiative in Favour of Cotton.  I should also like to 
thank the Ambassador of Benin for his support on be half of the African Group.  Our appreciation is 
likewise due to the delegations that expressed solidar ity with us when the formula was presented.  Our 
concern now is to make headway on this issue.  Some delegations have expressed regret that the 
formula was tabled before an overall solution h as been found for agriculture.  In answer, our 
spokesman, the Ambassador of Chad, has pointed out that according to the Hong Kong Declaration, 
to introduce a formula does not prejudge any outcome  that might be obtained in agriculture in that 
cotton subsidies have to be reduced more ambitiously  than in the context of any overall formula that 
might be agreed on.  The countries of the Initiative are open to dialogue and ready to hold discussions 
with all delegations in order to come up with a solution by 30 April 2006, since the lives of several 
millions of our farmers depend on this. TN/AG/SCC/R/11 
Page 10  
 
  Statement by Chad
 
on Behalf of the Co-Sponsors of the Sectoral Initiative in Favour of Cotton  
 
 
 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 given us of progress in 
the agricultural negotiations and particularly the work on cotton.   Allow me to recall that at the meeting of the Sub-Committee on Cotton held on 2 March 2006, in answer to questions that you ha d put, on behalf the co-sponsors of the Sectoral 
Initiative in Favour of Cotton I introduced proposals they had formulated to operationalize some of 
the decisions taken at the Hong Kong Ministerial m eeting, in particular regarding domestic support 
and the search for a "mechanism to deal with inco me declines in the cotton sector until the end of 
subsidies".  More specifically, they focused on:  
 - Implementation of Members' decisions to address cotton "ambitiously, expeditiously 
and specifically" (paragraph 4 of Annex A to the July 2004 Framework Agreement and paragraph 11 of the Hong Kong Decision); 
  - implementation of Members' decisions to search for a " … mechanism to deal with 
income declines in the cotton sector until th e end of subsidies … " (paragraph 12 of 
the Hong Kong Decision). 
  Under this agenda item I will again introduce the formula we developed in order to follow up 
on the decision that ministers adopted in Hong Kong, in paragraph 11 of the Ministerial Declaration. 
 
 The formula is set out in document TN/AG/SSC/GEN/4 of 1 March 2006. 
  Our proposals are based on the "acquis" as se t out in the July 2004 Framework Agreement 
and in the Ministerial Decision adopted at Hong Kong.     The purpose of this submission is to propose specific modalities for implementing Members' 
decisions on cotton, as we indicated at the Sp ecial Session of the Committee on Agriculture of 
17 February 2006 on presenting the first elements  (TN/AG/GEN/12) of a reduction formula for 
domestic support for cotton.   This submission follows the structure of the questions put by the Chairman of the Committee 
on Agriculture. 
 A. "
WHAT CONCRETELY WOULD BE A "MORE AMBITIOUS " REDUCTION IN TRADE -DISTORTING 
DOMESTIC SUBSIDIES FOR COTTON PRODUCTION BE IN ORDER TO SATISFY THE CRITERIA THAT THE REDUCTION BE MORE AMBITI OUS THAN THE GENERAL FORMULA
?"  
1. Operationalizing the term "more ambitious" 
1. More ambitious reduction must  be construed, as the co-sponsors of the Sectoral Initiative in 
Favour of Cotton already outlined in their cont ribution of 17 February 2006 (TN/AG/GEN/12 and 
TN/AG/SCC/GEN/3), in relation to the general re sult of the agriculture negotiations on domestic 
support.  
2. Correction coefficient (c):  the co-sponsors of the Sectoral Initiative in Favour of Cotton 
propose the following formula for determining the sp ecific rate of reduction of the AMS for cotton: 
 
Rg = General reduction as a percentage;  final result for reduction of the AMS  TN/AG/SCC/R/11 
 Page 11 
 
 
   
Rc = Reduction for cotton as a percentage;  final resu lt for cotton in order to meet the requirement 
for specificity and more ambition. 
     
 
 
3. 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. 
 
4. For the purpose of illustration, the followi ng table shows hypothetical Rg values and the 
corresponding Rc values, starting at 60 per cent,  which is deemed to be a modest result. 
 
Rg % >>>  Rc %  Difference % 
60 >>>  82.2 22.2 
70 >>>  84.3 14.3 
80 >>>  88.3 8.3 
90 >>>  93.7 3.7 
100 >>>  100 0 
 
2. Base period 
5. Operationalization of the term "more amb itious" according to the method described above 
will be based on the values of support for cotton reco rded throughout implementation of the results of 
the Uruguay Round, i.e. the six-year period from 1995 to  2000.  To calculate the base value of support 
(to which will be applied the proposed specific re duction formula), the arithmetic average of the 
amounts recorded for cotton in the DS:4 s upporting tables from 1995 to 2000 will be used. 
 
3. Elimination of all trade-distorting measures 
6. The Ministerial Decision of 18 December 2005 (WT/MIN(05)/DEC) advocates, in 
paragraph 12, a " … mechanism to deal with inco me declines in the cotton sector until the end of 
subsidies ". 
 7. This decision reflects the wish of all Member s to eliminate in full all cotton subsidies that 
cause distortion in the international market.  It also takes account of the Doha decision to give priority 
to international trade issues that affect the poorest countries more particularly.  8. The results of recent research by the World Bank show the importance of this issue for poor 
countries and, what is even more e ssential, the need for all cotton subs idies to be removed in order to 
attain the development effect.  A digest of th is research, prepared by the World Bank shows: 
  - That liberalizing the cotton market would have a significant impact on the global 
economy (+ $283 millions) and on internati onal market prices (+ 12.9 per cent); 
 (100 – Rg)*100 
3*Rg Rc = Rg + ---------------------- TN/AG/SCC/R/11 
Page 12  
 
   - that the distribution of these benefits will favour the African countries, which stand to 
gain more than 50 per cent of them; 
  - that these benefits will accrue only if all support programmes are eliminated
. 
 
9. According to the World Bank, a partial result w ould reduce the benefits to one quarter of what 
they would be in the event of total elimination of support.  10. For all these reasons, the co-sponsors of the S ectoral Initiative in Favour of Cotton propose: 
 
 - That the Members of the WTO should deci de in April 2006 to eliminate all market-
distorting support measures by  a date to be determined; 
  - that the Members of the WTO should undert ake to agree before the end of the Doha 
Round to an end-date for such elimination. 
 
B. "
HOW , AS A PRACTICAL MATTER , CAN WE MEET THE HONG K ONG DIRECTION TO GIVE 
PRIORITY TO REACHING THIS OUTCOME AND , AS REGARDS IMPLEMENTATION , ACHIEVE IT 
OVER A SHORTER PERIOD OF TIME ?"  
1. How to fulfil the mandate to give priority to an agreement on cotton 
11. In order to operationalize the Hong Kong decisi on to give priority to seeking a solution for 
cotton, the proposal is a follows: 
  - Giving priority to seekin g a solution for co tton means addressing it with a higher 
level of ambition and within a shorter pe riod of time, as required in the July 2004 
Framework Agreement and the Hong Kong Ministerial Declaration; 
 
 - the approach and the formulae propo sed in this paper take account of the 
interdependence of the two issues (cotton and agriculture); 
  - in accordance with the Hong Kong ma ndate, it is proposed that 31 March 2006 
should be set as the date for a decision on the above-mentioned formula. 
 2. How to fulfil the mandate to implement over a shorter period of time 
12. With regard to "implement[ation] over a s horter period of time", the co-sponsors of the 
Sectoral Initiative in Favour of Cotton reiterate a nd formalize their proposal of 14 February 2006 set 
out in document TN/AG/GEN/12 and TN/AG/SCC/GEN/3:  "III.  REDUCTION OF TIME FRAME:  
The time period for the reduction of domestic suppor t for cotton shall be one third of the period 
agreed upon for the reduction of domestic support in agriculture in general". 
 C. 
THE PRECISE RELATIONSHIP BETWEEN COTT ON AND THE GENERAL APPROACHES UNDER 
CONSIDERATION TO AMS , DE MINIMIS  AND BLUE BOX ?  
13. The proposals above establish the relationship as regards the specific a pproach to cotton and 
the general approach in respect of AMS. 
 14. The Hong Kong decision says " We recall the mandate given by the Members in the Decision 
adopted by the General Council on 1 August 2004 to address cotton ambitiously, expeditiously and  
specifically, within the agriculture ne gotiations in relation to all trade -distorting policies affecting the 
sector ….  ".  All Members thus stated their agreement to the inclusion of Blue Box and de minimis  in  TN/AG/SCC/R/11 
 Page 13 
 
 
  trade-distorting policies.  It is precisely for this  reason that the negotiators added to the Doha 
Development Agenda the "overall cut", covering AMS, de minimis  and Blue Box. 
 15. "Ambitious, expeditious and specific"  treatment accordingly applies to de minimis  and above 
all to Blue Box in the same way as it applies to the AMS. 
 
16. With regard to Blue Box , the following criteria will be applied in order to reach an ambitious, 
specific and expeditious outcome for cotton:   - The final results of the agriculture nego tiations as regards Blue Box disciplines will 
be applied specifically to the cotton areas and yields eligible for Blue Box measures; 
  - without prejudging the outcome of the ne gotiations in terms of a lower ceiling and/or 
additional criteria, the ceiling to be applied specifically to cotton will be calculated as 
follows: 
 
  The "blue" ceiling for cotton will be one third of the general "blue" ceiling 
 
 - This submission will be supplemented by a separate one on additional criteria to be 
applied specifically to cotton. 
 
 The four co-sponsors of the Sectoral Initiative in Favour of Cotton strongly recommend 
working speedily in order to fulfil the mandate the ministers set us for cotton in Hong Kong and to 
succeed by the end of April in formulating full modalities, as everyone expects of us.  TN/AG/SCC/R/11 
Page 14  
 
  Statement by China
 
   China welcomes the new proposal from the Co -Sponsors of the Sectoral Initiative in Favour 
of Cotton.  Basically, we support the proposal.  At th e same time, we share th e view of Columbia and 
fell it is a pity for the proposal not to give sp ecial consideration for the developing Members, 
especially the developing Members without AMS entitlement.   We fully understand the situations facing th e C-4 because we have the same situation and 
support that all trade-distorting domestic support for cotton should be reduced more ambitiously, 
expeditiously and specifically than the general form ula in developed Members.   However, we also 
would like to stress that the productions of cotton in developing Members is vitally important for 
addressing the problems of livelihood security, povert y alleviation and employ ment of farmers, and 
even the social stability.  Therefore, I strongly urge our colleagues here that the special and 
differential treatment for developing Members used in the Cotton Sector should be an integral part of 
the modality.  It is not only in line with the ma ndate in the DDA, the July Framework and the Hong 
Kong declaration, but also because of the level of domestic support is extremely low and targeted at 
subsistence, low-income and resource-poor farmer s only and barely constitutes any distortion to 
international trade on cotton.   When I studied the proposal I had a question on the paragraph 3 of Elimination of all trade-
distorting measures.  What do all trade-distorting measures include?  What is the relationship between 
paragraph 3 and paragraph 1?  I would like to seek clarifications through you Mr. Chairman from the 
Co-Sponsors.    TN/AG/SCC/R/11 
 Page 15 
 
 
  Statement by Colombia  
(circulated ad TN/AG/SCC/GEN/5)  
  
On behalf of my country, allow me to make some very general observations on the cotton 
situation in Colombia, as well as some comment s on the document, "Proposed Modalities for Cotton 
under the Mandate of the Hong Kong Ministerial Decision", TN/AG/SCC/GEN/4 of 1 March 2006, 
presented by the co-sponsors of the Sectoral Initiative in Favour of Cotton. 
As has been noted in various studies, the suppor t developed countries grant to their producers 
is one of the main causes of trade distortions, w ith repercussions for international prices, most 
particularly in the case of cotton. 
In Colombia's case, this resulte d in a fall in production that took the country from being a net 
exporter of cotton until 1993 to being an importer, d espite the fact that Colombia's productivity is on a 
par with world averages and even  those recorded by some of the world's largest producers. 
Between 1991 and 2004, producer prices for Colombian cotton fell by US$281 per tonne of 
seed cotton, i.e. a drop of 41 per cent.  However,  the period 1995-2004 registered the steepest fall in 
international prices, and hence in Colombian pr oducer prices, which fell from US$842 per tonne in 
1995 to US$411 in 2004, in other words a drop of US$431 per tonne and 51 per cent in this period. 
Owing to the high price-elasticity of cotton pr oduction in Colombia, the drop in prices was 
followed by a disproportionate fall in production.  Between 1991 and 2004, 195,902 hectares stopped being harvested, a reduction of 75 per cent in the area cultivated.  Similarly, between 1991 and 2004 
production fell by 277,000 tonnes for seed cotton and by 101,991 tonnes for cotton fibre, i.e. a 
reduction of 65 per cent.  During that last year, 154,763 tonnes of seed cotton were produced, yielding 
55,534 tonnes of fibre. 
Foregone net income from activities directly related to the cotton sector amounted to 
US$889 million in the period 1991-2004 and to b udgetary outlays of US$33.4 million between 1997 
and 2004.  The first figure represents 9.9 per cent of the Colombian agricultural GDP for one year. 
Approximately 195,000 jobs were lost directly  or indirectly – 1.4 per cent of the national 
workforce in 2004.  Wage earners and day labourer s made up the social sectors hit hardest by the 
cotton crisis affecting the country from the beginning of the nineties, because of the large share of the 
expenditure on these sectors in the cost structure of cotton. 
For the above reasons Mr Chairman, Colo mbia considers the proposals in document 
TN/AG/SCC/GEN/4 to be relevant, since they allow appropriate treatment for the cotton issue that is 
"ambitious, expeditious and specific"  with regard to the domestic support granted by the developed 
countries. 
In view of this, Colombia supports th e rapid phasing out of trade-distorting domestic support 
by developed countries . 
Colombia would also like to draw attention to the fact that there are still no proposals on 
special and differential treatment concerning the do mestic support for cotton that we developing 
countries give.  In the case of Colombia, this support is  intended to partially offset the fall in prices for 
domestic producers caused by distorting policies at  international level, in order to guarantee a 
minimum basic income that enabl es them to compete and survive pe nding the results we hope to see 
from external reforms. TN/AG/SCC/R/11 
Page 16  
 
  As for the development-related programmes in the document in question it is proposed that 
"support to producers must not become price support, so  its amount must be determined in relation to 
the effects of subsidies on international market prices and take into account the phasing out of the 
support."  Colombia understands th at this premise applies only to those programmes financed by 
donors. 
Similarly, developing countries like Colombia that have price support programmes and 
domestic support in general, need plenty of leeway  so that their particular circumstances can be 
accommodated and their own support phased out gr adually pending the end of subsidies. 
 
  TN/AG/SCC/R/11 
 Page 17 
 
 
  Statement by Cuba  
  
 Like colleagues who have already taken the floor, we welcome the paper TN/AG/SCC/GEN/4 
submitted on 1 March by the Co-Sponsors of the Sectoral Initiative in Favour of Cotton. 
 
 In our view, from all standpoints the paper is a valuable effort to find a solution to the 
pressing problems that still affect the cotton sect or, especially those arising from the distorting 
policies that some developed countries continue to apply and that entail serious economic and social 
difficulties for many developing countries.  These problems affect not only the African continent but 
also countries such as Colombia and Paraguay, which are also in favour of initiatives like the ones put 
forward by the proponents of the Cotton Initiative that  will help them to overcome the difficulties they 
have in maintaining this sector.   Being of the view that a solution for the cotton sector must cover all developing countries, we 
find the statements made by China and Colombia re levant because they seek the inclusion of S&DT 
provisions as a source for remedies whereby farmer s' incomes can be maintained in the difficult 
situation created by the proliferation and developm ent of distorting policies applied by the developed 
countries.   We also note and express appreciation for the statement made by the delegate of the 
European Communities, who spoke in favour of compre hensive solutions that cover all three pillars of 
the agricultural negotiations.    In response to statements by a number of delegatio ns to the effect that a solution to the cotton 
issue is contingent on an overall agreement in agri culture, we recall that in the July Package and the 
Hong Kong Ministerial Declaration, Minister s mandated expeditious, specific and ambitious 
treatment of cotton, so that in agreeing on a so lution that answers the call of the Cotton Initiative 
countries, our approach must be marked by specificity and urgency. TN/AG/SCC/R/11 
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  Statement by the Nigeria
 
   Although this is an initiative of the four West  African Countries, other African Countries, like 
Nigeria stand to gain from the Cotton initiative a nd ultimately from the proposal, in view of our 
potential to supply cotton given the right environmen t.  Hence, our support for the proposal and 
thanked the proponents for the valuable contribution. 
  TN/AG/SCC/R/11 
 Page 19 
 
 
  Statement by the United States  
   The United States hereby submits its responses to  several of the questions relative to cotton 
submitted by the Chairman of the Special Session on Agriculture. 
 
(i)  What concretely would a "more ambitious" reduction in trade-distorting domestic subsidies 
for cotton production be in order to satisfy th e criteria that the reduction be more ambitious 
than the general formula?  
(ii)  How, as a practical matter, can we meet  the Hong Kong direction to give priority to 
reaching this outcome and, as regards implementa tion, achieve it over a shorter period of time? 
 (iii)  How will this relate precisely to the gen eral approaches under consideration in relation to 
AMS, de minimis  and Blue Box. 
 
USG Statement
 
 
The July 2004 Framework provides, and the H ong Kong Declaration affirms, that cotton will 
be addressed "ambitiously, expe ditiously and specifically within the agriculture negotiations ."  It is 
important to remind ourselves that before any resu lt can be reached on cotton, we must first reach 
agreement on the core modalities of the agricultura l negotiations, where much work remains to be 
done.  While substantial, albeit conditional, progress has been achieved in the export competition and 
domestic support pillars, the same cannot be said for market access.   Once agreement on the core modalities has been reached and we are in  a position to begin a 
sector-specific discussion on cotton, the first step will be to identify the appropr iate type of domestic 
support to which "more ambitious" criteria are to be  applied.  Since we are attempting to achieve a 
"more ambitious" outcome for a single commodity, th e focus must be on the type of domestic support 
that is applied on a commodity-specific basi s.  Product-specific support in the Aggregate 
Measurement of Support is the only commodity-s pecific support in the domestic support pillar. 
 
One cannot address the issue of how much  "more ambitious" the reductions in trade-distorting 
domestic support for cotton should be until the overall base formula and implementation period are 
agreed.  Settling on a formula for cotton reductions before the base formula and implementation 
period are agreed would prejudge the outcome of – and divert attention from – the negotiations on 
modalities in the core areas. 
 
The recent C-4 proposal is structured so that  the lower the level of liberalization for the 
package as a whole, the greater the differentiation fo r cotton.  This is not the path to success.  
Ambitious results on cotton can only be achieved as part of ambitious results for the agriculture 
negotiations as a whole.  
Moreover, negotiating numerical modalities for cotton outside of the context of the 
agricultural negotiations – either proportional (as sugg ested by the C-4 regarding cuts) or specific (as 
suggested by the C-4 regarding base period) – not on ly undercuts the flexibility of negotiators with 
respect to general modalities, but is inconsistent  with the approach agreed to in the 2004 July 
Framework and affirmed in the Hong Kong Declarati on in which cotton was recognized as an integral 
part of the agriculture negotiations. 
 
The United States recognizes that developing c ountries account for a growing percentage of 
cotton imports, and therefore barriers to trade in  cotton in developing countries are increasingly 
relevant.  For this reason, we are open to e xpanding Chairman Falconer's list of non-exhaustive TN/AG/SCC/R/11 
Page 20  
 
  questions to include the following:  which devel oping countries (1) are in a position to implement 
duty-free, quota-free access for cotton? and (2) plan to do so?    TN/AG/SCC/R/11 
 Page 21 
 
 
  Annex 3  
 
Statements at the Eleventh Meeting of the Sub-Committee on Cotton held on 27 March 2006 
 
 
Agenda Item 2(B):  Coherence Between Trade and Development Aspects:  
Update on the Development Aspects of Cotton   
 
 
Statement by the Secretariat  
 
 
Beyond the last report to the Sub Committee on Cotton (SCC), on 2 March 20062, there are 
three specific developments of interest to Members. 
• First, at the request of the delegation of Burkina Faso, the Secretariat circulated to 
Members, information on the extensive co tton sector domestic reforms underway in 
Burkina Faso.  This communication to Members was circulated in document WT/L/645, 
on 16 March 2006. 
• Second, at the request of the delegation of Cô te d'Ivoire, the Secretariat circulated to 
development assistance providers four cotton- specific projects for which Côte d'Ivoire 
would require assistance. 
• Finally, as reported to Members at the 10th Meeting of the SCC, the Secretariat has 
initiated a series of technical focused sessions  with development assistance providers for 
the purpose of receiving the most up-to-date feedback on the operational state of 
implementation of the specific programmes, projects and related activities as reflected in 
the Revised Working Table on Cotton Develo pment Assistance annexed to the Periodic 
Report of the Director-General. 
 
                                                      
2 TN/AG/SCC/W/5 (dated 15 March 2006).   TN/AG/SCC/R/11 
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  Statement by Burkina Faso
 
   I should like to thank the WTO Secretariat fo r circulating the document on the reform of the 
cotton sector in Burkina Faso with an account of the privatization progress that ensued.  As you will 
have noted, we can assert that privatization has ha d positive effects in our country, which, is now in 
the process of taking the lead in Africa with a r ecord output of an estimated 700,000 tonnes for the 
2006-2007 crop year.  We hope that the current negotia tions will indeed lead to total elimination of 
the subsidies that are creating distortions in cotton markets, so that our cotton farmers can reap the 
benefits of their work and our countries can comb at poverty, which has taken on alarming proportions 
in recent decades. 
  I cannot conclude without thanking all the develo pment partners for everything that they have 
already done and that they are continuing to do in order to support us in development, and I should 
like to take this opportunity to encourage others to do likewise. 
  TN/AG/SCC/R/11 
 Page 23 
 
 
  Statement by Chad  
 
  In addressing this agenda item, I would like to  thank the WTO Secretariat, and the bilateral 
and multilateral partners for the initiatives taken an d the actions announced to strengthen the cotton 
sector in the African countries that produce and export cotton. 
  We call upon the partners to pursue these efforts.   At the Sixth WTO Ministerial Conference in Hong Kong, in seeking coherence between trade 
and development aspects of the cotton issue, Members "urge[d] the Director-General to further 
intensify his consultative efforts with bila teral donors and with mu ltilateral and regional 
institutions (…), and to explore the possibilit y of establishing through such institutions a 
mechanism to deal with income declines in the cotton sector until the end of subsidies."  
 1. This submission aims to give effect to that mandate, to define modalities and to set dates to 
ensure that the results of the work done under th e mandate can be made available for the single 
undertaking at the end of the Doha Round. 
2. The proposal takes account of: 
 - The fact that in the poorest countries the cotton sector needs to be reformed and 
requires the necessary investment to ensure  that African cotton is competitive on the 
world market, thereby ensuring that poor c ountries are able to take full advantage of 
the opportunities afforded by a co tton market free of disruptions; 
  - the need to set up a safety net for cott on producers in the LDCs enabling them to 
survive until such time as internal and external reforms bear fruit. 
 
3. Any support mechanism for producers must take account of the following elements: 
 - Support to producers must not become price support, so its amount must be 
determined in relation to the effects of s ubsidies on international market prices and 
take into account the phasing out of the support; 
 
 - the support must be distributed directly to producers under the supervision of a 
neutral and independent body; 
  - the support must be clearly limited in time;  
 - the support must be linked to a prog ramme to strengthen the productivity and 
efficiency of the cotton sector in Africa. 
 4. For the foregoing reasons, the co-sponsors of the Sectoral Initiative in Favour of Cotton 
propose the following modalities: 
 - The Member countries of the WTO agree to the principle of creating a safety net for 
poor cotton-producing countries in Africa in April 2006; 
  - the Member countries decide in April 2006 to establish a task force to include 
multilateral financial institutions, donor countries and a representative of the WTO 
Director-General to prepare a proposal to this effect by July 2006; 
 TN/AG/SCC/R/11 
Page 24  
 
   - the Member countries of the WTO undertak e, in July 2006, to instruct their 
representatives at the World Bank to ask the Ba nk to agree to a donors meeting in the 
Autumn of 2006 and to adopt a programme and financing therefore in time for inclusion in the single undertaking at the end of the Doha Round negotiations. 
 
 We call on WTO Members to act with the urgenc y that work on cotton and the need to save 
this sector from the difficulties in which it finds itself, both require.  
 
__________