Cotton-4 Reports on by-products Initiative, Cotton
Trade and Development Issues Discussed
The “Cotton-4” (Benin, Burkina Faso, Chad, Mali) and other participants
discussed updates to development assistance programmes
for the cotton sector at a meeting of the Director-General’s Consultative Framework
Mechanism on Cotton on 12 November, chaired by Deputy Director-General Alan Wm.
Wolff. The results of the first phase of the WTO-UNCTAD-ITC initiative on cotton
by-products were discussed. At the dedicated session on trade-related developments
in cotton on 13 November, members were updated on the evolution of cotton markets,
including the impact of COVID-19 on cotton trade and recent improvements to monitoring
tools.
The WTO
Secretariat reported on the activities organized on 7 October in celebration of
the first anniversary of
the World Cotton Day launch. This included the virtual activities published
on the WTO website and via social media platforms and the cotton booths and exhibitions
set up at the WTO premises. Several international organizations and delegations
reported on their respective events on 7 October. The Cotton-4 commended the WTO
for the successful activities despite the restrictions linked to the COVID-19 pandemic.
It asked the Secretariat to celebrate and mark the day again in 2021.
Looking
forward, the Cotton-4 asked WTO members to continue supporting its efforts to request
the United Nations General Assembly (UNGA) to adopt its proposed resolution for
7 October to be recognized as World Cotton Day. The Cotton-4's previous request
was not discussed at the UNGA this year due to COVID-19 crisis management at the
UN and the consequent cancellation of discussion of all new resolution proposals.
The WTO
Secretariat organized the launch event for
World Cotton Day at the WTO on 7 October 2019 at the request of the Cotton-4, with
cotton communities throughout the world participating in various online and offline
events.
Wrapping
up the first phase of the WTO-UNCTAD-ITC joint
initiative on cotton by-products, the Cotton-4 countries and Mozambique
shared the results of individual feasibility assessment studies. These followed
the multi-stakeholder validation
workshops organized by the WTO Secretariat at the end of September
and early October in each of these countries, thanks to the support of the Enhanced
Integrated Framework (EIF).
Based
on the data and survey results included in the studies, each partner country identified
two to four specific cotton by-products with a strong potential to attract investments
for enhanced local processing and trade, taking into consideration overall national
economic development strategies.
The United
Nations Conference on Trade and Development (UNCTAD) provided information on its
cotton by-products projects in Tanzania, Uganda and Zambia, which started before
the joint initiative was launched in November 2018. The Cotton-4 commended UNCTAD
for sharing valuable lessons in developing cotton by-products projects, in particular
by tackling prominent transport and logistic challenges, which are amongst the weakest
links of cotton value chains in Africa.
The C-4,
Brazil, China, the European Union, the EIF and several other partner countries and
agencies praised the quality of the output and the progress made during the first
phase of the initiative and reaffirmed their commitment to supporting phase two.
DDG Wolff encouraged members to continue making progress in consolidating political
will and improving the economic environment for the development of cotton by-products.
He asked the participating countries to provide detailed action plans for partners
to consider. The WTO will contribute to the process based on its mandate and the
evolving situation, he said.
UNCTAD
and the International Trade Centre (ITC) shared their plans for the second phase,
i.e. the implementation stage of the joint initiative. The EIF confirmed funding
for two more feasibility assessments requested by Malawi and Togo, which will bring
to ten the total number of least-developed countries (LDCs) partnering in the joint
initiative. The EIF said it aims to integrate the work of the joint initiative into
its national structures in African countries and its overall strategy of increasing
income and promoting sustainable development along the value chain. It urged participating
countries to highlight their priorities and not to hesitate in asking for support.
DDG Wolff
noted that the discussions pointed to the fact that "the joint initiative on
cotton by-products is well integrated with poverty-reduction strategies and other
development-oriented projects at the level of individual countries, so the focus
should remain on interventions targeted at the specific needs of individual countries,
while also taking into account the sub-regional integrative potential of this line
of work".
Finally,
a draft General Council Declaration was proposed by the Cotton-4 countries and other
cotton-producing LDCs. The declaration aims to garner enhanced support from WTO
members and encourage public and private partnership in pursuing concrete results
in the development of cotton by-product industries in LDCs. Members agreed that
the Cotton-4 should submit the Declaration to the General Council for consideration
at its December meeting.
The Cotton-4
reported on the state of play of the “Cotton Roadmap Project”, which seeks to promote
the cotton sector by improving local processing capacity and developing cotton-to-textile
value chains at the regional level.
The International
Cotton Advisory Committee (ICAC) examined the relationship between cotton and climate
change. Highlighting cotton's role in absorbing carbon emissions, ICAC explained
how cotton could make positive contributions to Africa's efforts in combating climate
change and could play its part in achieving the UN Sustainable Development Goals.
The Cotton-4
reiterated the deep impact of the COVID-19 pandemic on cotton production, processing
and trade, especially the disruption in logistics chains. It asked the WTO Secretariat
to help assess the full impact of the pandemic on the agriculture sector in Cotton-4
countries and called on all technical partners to provide much-needed assistance
to help build resilience in cotton production, processing and marketing. It said
it plans to have roundtable meetings with all partners on the margins of the WTO's
12th Ministerial Conference to further discuss targeted cotton development assistance.
Several developing members expressed continued support for the Cotton-4's efforts
and their commitment to South-South cooperation on cotton projects.
The latest
revision of the Evolving Table (WT/CFMC/6/Rev.29,
2 November), the WTO's core document on cotton development assistance,
includes two new cotton-specific projects submitted by the US and France, reflecting
a 6% increase in commitments in comparison to the previous Evolving Table and bringing
the number of active projects to 26. Meanwhile, a 3% increase in disbursements (approximately
USD 2.764 million) was reported from the US and Brazil.
Members
discussed the Cotton-4's proposal to add an annex to the Evolving Table to reflect
all requests for cotton development assistance projects. The Secretariat took note
of members' comments and will circulate a revised conceptual note and update the
Evolving Table accordingly.
Ambassador
Gloria Abraham Peralta of Costa Rica, Chair of the Dedicated Discussion on Cotton
on 13 November, encouraged members to continue engaging in the new facilitator-led
process of the agriculture negotiations. She thanked the two facilitators for cotton
(Burkina Faso and Brazil) for their diligent work and their report to the Committee
on Agriculture in Special Session on 10 November.
ICAC
highlighted the contraction of cotton production in most countries during the season
2020/21 in a context of growing stocks. ICAC also described the impact of the COVID-19
pandemic on the textile and apparel sector and its impact on cotton demand. Finally,
ICAC provided some preliminary data on the evolution of assistance to cotton production.
This confirmed a strong negative correlation between subsidies and cotton prices,
with an expected level of subsidies as calculated by ICAC at around US$ 7.7 billion
in 2019/20.
The Chair
recalled that the report on the information session on COVID-19 and cotton, "From
facts to solutions", organized by the WTO on 30 July 2020 had been circulated
on 19 October 2020 (TN/AG/SCC/34).
The Cotton-4
and Chad stressed the urgent need to rebuild and relaunch the cotton sector as the
COVID-19 pandemic has caused severe economic and social consequences. They urged
members to improve transparency in their trade policies and work towards an outcome
on trade-distorting support for cotton. They also called on members to lift all
trade-restrictive measures to facilitate the supply and exports of essential medical
goods and agricultural commodities, in particular cotton.
The Cotton-4
welcomed the monitoring of the implementation of the Cotton Nairobi Ministerial
Decision, and invited WTO members to expand duty-free, quota-free access
for exports of cotton and cotton by-products from least-developed countries.
The WTO
Secretariat presented a revised “background paper” (TN/AG/GEN/34/Rev.13
and two addenda) compiling up-to-date information on cotton policies
in the areas of domestic support, market access and export competition.
The WTO
Secretariat introduced its updated Integrated Data Base
(IDB), which contains tariffs applied by WTO members and acceding
economies to imports from other WTO members, as well as import statistics. The Secretariat
encouraged members to make timely and complete notifications as these constitute
the foundation of the database.
The ITC
presented the Cotton
portal (launched in 2017) and introduced the new market price information
platform, which provides free access to real-time data on prices for more than 300
agriculture products, including cotton products.
Cotton has been a key
issue in WTO agriculture negotiations and an important development-related
issue since it was raised in 2003 by four African least-developed countries — Benin,
Burkina Faso, Chad and Mali — known as the Cotton-4.
The decisions
on cotton adopted at the 2013 Bali Ministerial
Conference and at the 2015 Nairobi Ministerial
Conference have underscored
the importance that WTO members attach to cotton.
The WTO
organizes twice a year, since the Bali Ministerial Conference held in December 2013,
dedicated discussions of trade-related developments for cotton as part of the "cotton
days", which also cover the development assistance aspects of cotton.