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Cancun WTO conference kicks off with cotton debate

Summary of 10 September 2003

Conference kicks off with ‘facilitators’ named and cotton debated

Mexican President Vicente Fox opened the Fifth WTO Ministerial Conference on 10 September 2003, and ministers started work in consultations on key issues with “facilitators”. The day ended with a debate on a proposal on cotton from four African countries.

The opening session featured statements from the conference chairperson, Mexican Foreign Minister Luis Ernesto Derbez, WTO Director-General Supachai Panitchpakdi, General Council chairperson and Uruguay’s ambassador to the WTO Carlos Pérez del Castillo, UNCTAD Secretary-General Rubens Ricupero (on behalf of UN Secretary-General Kofi Annan) and President Fox.

Ministers then proceeded to the business of the conference. Chairperson Derbez announced that he had invited five ministers to act as “facilitators” to help him with negotiations on various subjects:

- Agriculture — George Yeo Yong-Bon, Singapore’s Trade and Industry Minister
- Non-agricultural market access (NAMA) — Henry Tang Ying-yen, Hong Kong China’s Financial Secretary
- Development issues — Mukhisa Kituyi, Kenya’s Trade and Industry Minister
- “Singapore” issues — Pierre Pettigrew, Canada’s, International Trade Minister
- Other issues — Clement Rohee, Guyana’s Foreign Trade and International Cooperation Minister (this includes the TRIPS registry for geographical indications for wines and spirits, and other topics)

At a press conference later, Director-General Supachai and Chairperson Derbez said the facilitators have started consultations with individual groups and delegations. The facilitators will report to Mr Derbez and work-proper will be launched with an informal meeting of all ministers (“heads of delegations”) during the morning of the second day, Thursday 11 September. Meetings open to all delegations on some or all of the five subjects will start in the afternoon. Chairperson Derbez said that the topics to be discussed under “other issues” would depend on suggestions from delegations.

As in previous Minsiterial Conferences, these informal meetings will take place while the formal plenary continues with general statements from ministers.

The cotton proposal

This issue was originally raised in the General Council and Agriculture Committee by Benin, Burkina Faso, Chad and Mali. The proposal is now a Ministerial Conference document, WT/MIN(03)/W/2 and WT/MIN(03)/W/2/Add.1. It describes the damage that the four believe has been caused to them by cotton subsidies in richer countries, calls for the subsidies to be eliminated, and for compensation to be paid to the four while the subsidies are being paid out to cover economic losses caused by the subsidies. The proposal seeks a decision in this Cancún Ministerial Conference.

In the evening plenary session, the four presented their case. They described how cotton is important to their economies, and how in some years total subsidies in rich countries amount to almost as much as the value of world trade in cotton. They are competitive, they argued, but find it difficult to compete with the subsidies. They described their proposal as a solution that would allow them to participate more in the international trading system and to use trade in order to lift themselves out of poverty. By making the proposal in this way, they are demonstrating their faith in the trading system and its equitable rules, they said.

WTO Director-General Supachai urged ministers to consider the proposal seriously. Remarking that he did not usually intervene in debates like this, Dr Supachai said that the issue is important. He observed that the four are not asking for special treatment, but for a solution based on a fair multilateral trading system. He also said the proposal underscores the need for ambitious results in the agriculture negotiations as a whole, based on the Doha mandate.

The proposal received support from Canada, Australia, Argentina, Cameroon, Guinea, South Africa, Bangladesh (for least-developed countries), Senegal and India — either for the whole proposal or key parts such as phasing out subsidies. Several of these countries said other products face similar problems.

The US said that distortions in cotton are not only caused by subsidies in the sector, for example industrial policies that support production for synthetic fibres, high tariffs on finished products and good harvests caused by favourable weather are also important reasons for falling cotton. The US proposed discussing how to deal with distortions throughout the production chain, including subsidies, tariff barriers and non-tariff barriers on cotton, synthetic fibres and products made from these.
The EU said that its production and exports are too small to have an impact on world cotton prices, and that it is changing its programme for cotton producers. The EU said it supports commercial elements of the proposal and pledged to contribute to reaching agreement on a solution.

Chairperson Derbez concluded that the issue would be discussed in the informal meetings of ministers over the coming days.


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