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Africa: Cotton Producers Demand Results

AfricaFocus Bulletin
Oct 24, 2005 (051024)
(Reposted from sources cited below)

Editor's Note

Two years ago in Cancun, the issue of the damage done to African cotton producers by rich-country subsidies sparked the breakdown of world trade talks, highlighting the failure of rich countries to make this round of trade talks a "development round." In Geneva last week, African countries warned that their interests were still being ignored.

This AfricaFocus Bulletin contains a report from Third World Network on the statements by cotton-producing countries at talks in Geneva, a more general report from Focus on the Global South on developing country views of the stalled talks, and excerpts from another report from Third World Network on the latest negotiations. For previous AfricaFocus Bulletins on trade issues, and additional links, visit http://www.africafocus.org/tradexp.php

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

African Cotton Countries Demand Concrete Results at Hongkong

Third World Network
http://www.twnside.org.sg

By Tetteh Hormeku (TWN Africa) Geneva, 19 Oct 2005

Representatives of the West African cotton-producing countries have demanded a concrete resolution of the cotton problem at the Hong Kong Ministerial Conference, as well as a clear indication now that this will be the case, if they are to have any stake in outcomes of the Conference.

Speaking to the press at the WTO on Wednesday, the West African countries said that in the absence of such concrete results, the developed countries whose policies have led to the cotton crisis will be responsible if the cotton countries are unable to accept an overall deal in Hong Kong.

The message was delivered by the Ministers of Trade and Industry of Mali and Chad, the President of the Burkina Faso National Union of Cotton Producers, and the President of the Cotton Producers Association of Africa.

Introducing the issue at the press conference, the Malian Minister, Mr Choguel Kokalla Maiga, said that the African cotton producers have no choice but to demand a resolution of the cotton problem.

Resolution of their problem is their single interest in the on-going negotiations, compared to other countries which have multiple interests that can be traded off. He explained that their countries are dependent on the single commodity of cotton, whereas the EU and the US have other products available to them, and they also have the means to resolve the crisis arising from their policies.

Explaining the strategic role of cotton in their economies, Maiga stated that cotton constituted 40% of total exports of their countries, 60% of agricultural exports, and up to 10% of their GDP.

The minister recalled that when they brought up the cotton issue in Cancun, there had been no solution. Since Cancun, there had been a lot of discussion and workshops on the cotton issue, but again there was no progress up to now.

In July 2004, as part of the July framework, WTO members agreed to treat the case of cotton specifically, expeditiously and ambitiously. But up to now there is no understanding of what these terms mean, in terms of operationalising them.

Although there were only a few weeks before the Hong Kong Ministerial, there was still no solution.

The principal countries especially the US and EU have all submitted proposals on agriculture, and yet not one of these have even mentioned the case of cotton. "The cotton countries are thus faced with the risk that the Hong Kong Ministerial will offer us only empty words and we will leave empty handed from Hong Kong. This will be unacceptable," he stated.

The cotton countries, therefore, need a clear statement before members arrive at Hong Kong as to how the Hong Kong meeting will address the cotton issue, said the Minister, adding that a concrete and operational resolution to the cotton problem must be part of the decisions taken at Hong Kong, otherwise the countries cannot see how they can have an interest in those decisions.

"We don't want to be held responsible if there is a failure in Hong Kong," he said, adding that the US, EU and other countries had the means to prevent a failure.

Asked whether this meant that the countries are prepared to block a deal in Hong Kong, the Minister explained that it is not up to any particular country to take upon themselves the responsibility to block negotiations. However, a negotiation can be blocked as a result of the failure to find solutions to legitimate problems. "If there is no solution, we cannot see what our interests will be in the negotiations," he reiterated.

He stated further that their countries are being put in the unacceptable situation of having to chose between blocking a deal in Hong Kong or accepting a bad deal. He said that their demands were perfectly legitimate. They were not asking for any special treatment or favours, but simply asking that the rules of the WTO be applied.

Asked further to comment on the US argument that subsidies on cotton were not linked to the production and on the issue of box shifting, the Minister stated that debates about the colours of boxes was interesting as an intellectual exercise but is of little relevance to the cotton countries. "If other farmers (in rich countries) are getting large subsidies, then whatever colour the subsidies are said to be - whether blue or amber or green - makes no difference."

The relevant question, he said, is whether "we can or cannot produce for the international market, due to these subsidies."

Mr. Maiga said the countries' demands are that a clear date be fixed to completely eliminate the subsidies, and that in the meantime, their producers must be compensated for the huge losses they have suffered from the subsidies.

He criticised the big countries for being concerned in the current negotiations with solving their own problems, and then they ask the small countries to accept whatever they have decided. "We can't accept this," he stressed.

Mrs Ngarmbatina Soukate, Minister of Trade and Industry of Chad, stressed that what their countries were looking for in the WTO is the resolution of the cotton issue. "It is our life," she said.

She added that it was important for their countries to know before going to Hong Kong that they will come back with concrete results, otherwise their countries cannot even dare to go to Hong Kong. "We don't want declarations, we need something concrete to give to our farmers," she stressed.

There had been a lot of sympathy in words so far, she added, but no concrete measures to address the issue.

Quoting an African proverb that people who are hungry do not need philosophy but action, she stated that the cotton countries need to be able to explain to their farmers after Hong Kong what the OECD countries are willing to do to reduce their subsidies and what that will mean for the farmers.

"This is why we are here at the WTO, we plead to all concerned to stop beating around the bush and instead tell us what you are going to do."

Ibrahim Malloum, President of the Cotton Producers Association of Africa, drew attention to the fact that cotton produced in West Africa is of the highest quality and had very competitive costs. It was linked to the lives of over 15 million, but unfortunately, instead of leading to the development of the people, cotton has become part of their impoverishment due to the low prices which the producers receive as result of the subsidies paid to cotton producers in the OECD countries.

"In the OECD countries, production is not influenced by market forces, as the farmers get a good price whatever the prices in the market. We are facing unacceptable competition," he said.

He said that at the WTO Cancun meeting, everyone had accepted that their countries had made the moral and legal case for redressing the situation. He reiterated that the cotton countries are asking simply for the rules of the WTO to be applied.

He added that there are four issues to be addressed in Hong Kong: ( 1) urgent action on domestic and export subsidies; ( 2) a date to be fixed for an end to all subsidies; ( 3) a decision to compensate the cotton producers for the huge losses they have suffered as a result of the subsidies, which he estimated as $250 million in direct costs and $1 billion including indirect costs; and ( 4) cotton must be treated outside of agriculture as it is a strategic case.

In a similar vein, Mr Francois Traore, President of the Burkinabe National Association of Cotton Producers, stated that cotton was strategic for the development of their people.

He said the Western countries should be supporting the development of cotton in African countries so that the people can have a livelihood and stay in their own countries. Instead, the Western countries seem to prefer the present situation in which their subsidies destroy the prospects of the African cotton-producing countries, whose people are then forced by circumstances to migrate, and then they are forcibly repatriated.

He stated that it would be better to stay in Hong Kong after the Ministerial than return with an empty hand.


Ag Talks: African and Caribbean Delegates Angered by US Package Portrayed as "Progress"

Aileen Kwa

Focus on the Global South
20 October 2005

Focus on the Global South (FOCUS)
http://www.focusweb.org

"What the US has done is deceptive and misleading", delegate of a small country to the WTO, denouncing the public relations spin that the US and EU had made huge concessions.

In informal conversations with African and Caribbean delegates to the WTO, many countries have expressed anger at the public relations spin of the United States and EU, portraying their offers as huge concessions.

And they have reason to be. The current WTO defined "trade distorting subsidies" provided by the United States amount to about $21.5 billion. With the implementation of the US proposal, the US would still be able to provide up to about $23 billion in "trade- distorting" supports. (Note that these figures do not include the $51 billion US provides in the unlimited "Green Box", and the cotton panel has already established that certain payments in this box are trade-distorting.)

Two instruments that have allowed this "deception" to take place are:

The sacrosanct Green Box, where the bulk of subsidies will be housed, has been left untouched in these proposals. The US wants an expansion of the Blue Box which will allow them to announce cuts in the Amber Box, but shift a large portion of those reduced subsidies around 5 billion into the New Blue Box.

The result? Whilst export subsidies are said to be on the way out, hidden export subsidies have taken their place, and dumping in developing country markets continue. Small wonder that African and Caribbean delegates are incensed that these cosmetic "concessions" have been given so much fanfare at the WTO and in the press in the past week. Swirling all around them at the WTO is talk by the prominent players that "progress has been made".

These are some comments heard in the corridors made by the Africans and Caribbean delegates, gravely concerned by these developments:

"There seems to be this notion of progress. But I don't think in reality that progress is there. I don't think developing countries should be rushing into contributing to the process. The picture is being portrayed that we are moving. Everybody should come on board to move. We should say, "There is no movement". US seems content that the proposal has increased momentum, that if not for their proposal, nothing would have moved. They are expecting us to congratulate them. But there is nothing to congratulate about".

An African delegate, worried about the demands placed on them regarding market access cuts said,

"What is worrying is that the level of ambition (in market access / tariff cuts) is rising from the US and EU. I don't know if this is where some developing countries want to head. Those who feel it should go down should come in and say something. We are not seeing commensurate levels of ambition rising in export subsidies or domestic supports. We have no justification to raise levels in market access."

Many delegates have also expressed concern that whilst the market access talks have accelerated, discussion on the defensive instruments for developing countries (Special and Differential treatment S&D) have not:

"The prominent players are arguing that we need to knock together the main components, then deal with S&D (referring to the Special Products and Safeguard Mechanisms) because they don't know what the commitments by developing countries will be. But that is dangerous. Given the time factor, we will be rushed into S&D components, but not really get what we are looking for. We need to have these commitments addressed in parallel, otherwise, the results would be detrimental".

The African delegates have also underlined that they want cotton and commodities two key concerns of theirs - to be addressed, yet there has been no progress in these areas. One delegate also expressed great concern, indignation and anger that the Chair of Agriculture had suggested to those who had put forward a paper on commodities, that this issue could be deferred till after Hong Kong.

An African delegate characterized the events as a "backward movement, not a forward movement".

A Caribbean delegate underlined, "I'm disappointed in what is being sold as 'concessions'", and an LDC African country, referring to the date of 2010 given by the US regarding the elimination of export subsidies, wondered why we should be content with five more years of export subsidization. "We should ask for the immediate removal of export subsidies", he said with indignation, referring to the farmers at home that have lost their livelihoods as a result these supports.


"Blame game" follows failure of FIPs Ministers' meeting

21 October 2005

Third World Network
http://www.twnside.org.sg

By Martin Khor (TWN), Geneva, 20 October 2005

[Excerpts only. Full text available at
http://www.twnside.org.sg/title2/twninfo278.htm]

The WTO preparations for the Hong Kong Ministerial conference suffered a serious setback Wednesday night when a key meeting on agriculture involving Ministers of five major countries - the US, EU, Brazil, India and Australia - ended abruptly after failing to make any progress. The session scheduled for Thursday was cancelled.

On Thursday, a "blame game" took place, with some of the so-called "five interested parties" (FIPs) having press conferences and statements in which they disclaimed responsibility for the failure, and sought to place the blame elsewhere.

"It may not have been a collapse, but it was close to a collapse," said one developing country diplomat, describing what happened at the Wednesday talks.

The meeting had been attended by the US Trade Representative Robert Portman, EU Trade Commissioner Peter Mandelson, Brazilian Foreign Minister Celso Amorim, Indian Commerce and Industry Minister Kamal Nath and Australian Trade Minister Mark Valle.

A significant development Thursday was the decidedly downbeat assessment by both Portman and Mandelson on where the Doha talks now stand, following the failure of the FIPs meeting. ...

According to trade delegates, the Wednesday FIPs meeting floundered mainly because of the inability of the EU to make any new offers in the market access pillar of agriculture. The offer made by Mandelson the previous week on how far the EU could go to cut its tariffs had been rejected by the others as too weak. ...

Earlier, at a Wednesday afternoon press briefing, before the FIPs meeting, Amorim had been asked to respond to reports that Mandelson had said that the EU could not move in agriculture unless other countries make more concessions in other areas such as NAMA and services.

Amorim said he could understand that everything is conditional on what happens in other areas. "But we would be wary of any attempt to make a smokescreen to prevent an advance on agriculture."

He said Brazil would not refuse to discuss other issues, but the real negotiations in these other areas can take place "when we have a real shape in agriculture." He added: "It would not be possible to move in these other areas even to test flexibility in these areas, if we don't have clear signals in agriculture."

An Indian Commerce Ministry press release on 20 October described the world trade talks as being "deadlocked" over agriculture, after the key ministerial meeting. ...

Meanwhile, at another press briefing later Thursday, the Foreign Minister of Brazil, Celso Amorim, said in reference to the enlarged FIPs meeting taking place Thursday, that "we are at a crucial moment."

Speaking only on behalf of Brazil, Amorim said that while the round is a single-undertaking, its engine remains agriculture and the starter at this moment remains market access in agriculture.

He said that while the US proposal on domestic support is an important step, it was an insufficient one.

What is needed now in the round is an important move on market access that will help others to move, and also help the US to move on domestic support.

Other aspects also have to be discussed taking into account that this is a development round. The round is not a machinery to extract concessions from the developing countries, he said.

Referring to some remarks that had been made that there was now a deadlock, Amorim said that he preferred to speak of a 'padlock.' "And the key to the padlock is in the hands of the EU."

Note: This report received inputs from Kanaga Raja. It was published in SUNS Bulletin, 21 Oct 2005


AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

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