WTO, Cotton & South Africa

On 16 December the WTO released its 6th Progress Report to the Sub-Committee on Cotton dealing with the development assistance aspects of cotton under the Doha mandate. Recall that the WTO Cotton Initiative has 2 legs: first is the negotiation mandate requiring a cotton trade solution which is ambitious, expeditious and specific; and secondly a development aspect to repair the harm suffered by African cotton growers due to the suppressed international cotton market. This mandate is drawn from paragraph 12 of the Hong Kong Ministerial Declaration, drafted three years back in December 2005.

The chairman of the agriculture negotiations, Crawford Falconer, also chairs the cotton sub-committee. He observed that in the ‘real world’ the international market outlook was bleak as cotton markets appeared to be more prone than ever before to depressed prices through subsidized products. He held the view that it had been wrongly assumed that commodity prices were going up and that consequently there would be no need to worry about subsidy policies anymore. Prices had now in fact now come down, and it was clear that commodity price behaviour would be exacerbated by subsidy policies.

South Africa made an intervention at the session, noting that South African cotton farmers were also feeling the effects of the subdued cotton market. South Africa reaffirmed its support for the position of fellow African cotton producing and trading countries. The South African statement notes that as a cotton-producing country, cotton production had declined substantially over time in South Africa and the sector faced a bleak future if the issue of domestic support for cotton was not addressed comprehensively in the negotiations. South Africa continues to support the cotton stance taken by Brazil on behalf of the G20 and by Burkina Faso on behalf of the C4 (Burkina Faso, Benin, Chad and Mali).

These latest comments serve to highlight the need to address the cotton mandate primarily through the negotiating process; and although it is easier to address, the development mandate clearly has only a secondary impact in distilling an overall solution.