Ambassador Alparslan Acarsoy of Türkiye, the chair of agriculture negotiations, facilitated the discussion on the trade aspects of cotton on 16 May while Deputy Director-General Jean-Marie Paugam, acting on behalf of Director-General Ngozi Okonjo-Iweala, chaired the meeting on the development dimension of cotton on 17 May.
Chair: Time to move forward with clear sense of direction
Ambassador Acarsoy reported on the “quad-plus” negotiation meeting in April. This negotiation forum dedicated to cotton involves the Cotton-4 countries and several major cotton players, such as the United States, the European Union, Australia, China, Brazil, India and Pakistan. He noted that members have still not been able to make progress on the core issue of trade-distorting domestic support provided to cotton producers.
Cotton remains high on the agenda of many members due to its critical importance for these countries, said Ambassador Acarsoy. “It is time to make all possible efforts to deliver on concrete steps forward with a clear sense of direction,” he added.
The chair suggested that members work on two parallel tracks: enhancing technical and evidence-based discussions; and working on generating texts that can contribute to bridging gaps. The chair also highlighted that several members had stressed the importance of working towards concrete results to enhance the sustainability, resilience and competitiveness of the cotton value chain of the C-4 and other African and least-developed countries as part of an outcome at MC13.
The C-4 reaffirmed the mandate of the Hong Kong Ministerial Decision, which urges members to address cotton issues “ambitiously, expeditiously, and specifically” within agriculture negotiations. They repeated their call for expediting cotton trade reform on various fronts, including enhancing transparency in trade-distorting domestic support, improving market access for cotton and eliminating any restrictive measures that impede cotton trade.
Market trends and transparency
The International Cotton Advisory Committee (ICAC) highlighted the challenging market conditions caused by the COVID-19 pandemic, the economic downturn and geopolitical conflicts. Its report indicated a decrease in cotton production and consumption for the 2022-23 season. ICAC also emphasized the decline in both imports and exports of cotton as well as the volatility of cotton prices.
The International Trade Centre (ITC) presented the Cotton Portal, a platform providing producers and traders with comprehensive market information related to cotton. Members confirmed the usefulness of the platform for cotton trade and development-related information produced by ITC and the WTO in cooperation with ICAC. They also discussed how to increase the use of the portal in African countries, including possibly by providing online courses.
The Standards and Trade Development Facility (STDF) introduced the ePhyto Solution, a digital system specifically designed to aid developing countries in issuing electronic certificates for agricultural products, streamlining customs clearance processes. Côte d’Ivoire shared its experience in successfully implementing the ePhyto system to facilitate its cotton trade.
The WTO Secretariat introduced its updated “background paper” (TN/AG/GEN/34/Rev.18 and two addenda) compiling the latest information on cotton policies in domestic support, market access and export competition.
Mali introduced its submission on COVID-19 related measures, the first written submission by a member under the “COVID-19 and Cotton” agenda item. The C-4 underscored that, despite the decrease in the intensity of the COVID-19 pandemic and the lifting of most of the restrictive measures by importing countries, its cotton producers continued to feel the effects of the pandemic. The impact of high fertilizer prices and the lack of availability of fertilizers were also stressed.
Pest management, cotton value chain
DDG Paugam drew attention to the significant threat posed by the jassid pest, a form of leafhopper, which has caused substantial losses in cotton production during the 2022-23 season. The C-4 made a presentation on the pest, outlining its impact on cotton production in West Africa.
The UN Food and Agriculture Organization provided further information on the jassid pest and invited African members to participate in a workshop aimed at providing assistance. The United States also extended an invitation to the C-4 to join its new Climate Hub, which gives access to additional support for the transition to a green, sustainable future.
ICAC presented its analysis on the cotton-to-textile value chain, revealing that when fabric is processed into finished products, its value can multiply by approximately 15 times. The analysis highlighted that a shift towards domestically transformed cotton in the sub-Saharan African region could result in the creation of over 6.4 million jobs. ICAC urged African cotton-producing countries to seize the economic potential provided by this shift and to develop their own textile policies to move up the value chain.
WTO-FIFA initiative, World Cotton Day 2023
The WTO Secretariat and FIFA provided an update on progress in implementing the Memorandum of Understanding (MoU) signed by both organizations in September 2022. The MoU refers specifically to facilitating the integration of the C-4 and Côte d’Ivoire into the football-related economy.
The establishment of a steering committee was announced, comprising representatives from the WTO, FIFA, ITC, the United Nations Industrial Development Organization (UNIDO) and the African Export and Import Bank (Afreximbank). This has been operational since January 2023. The committee’s tasks will involve assessing the supply and demand situation in each of the Cotton-4 countries and Côte d’Ivoire and finding resources for project implementation. The intention is to have preliminary results available at World Cotton Day 2023, which will be held on 4 October at UNIDO headquarters in Vienna.
The C-4, along with other members, welcomed the innovative concept of connecting cotton to football and the sports economy, recognizing the significant potential of enhancing the C-4’s participation in the cotton value chain and empowering women. They also highlighted the success of the “Making trade score for women” event, which took place on 1 May at the WTO, increasing awareness of the C-4 and the WTO-FIFA initiative.
Afreximbank reiterated its commitment to providing USD 300,000 in support of African cotton initiatives and the WTO-FIFA Memorandum of Understanding. They encouraged all members to take advantage of this funding opportunity and to utilize the funds for their respective cotton projects.
Other matters
The C-4 expressed concerns about the decreasing support for agriculture and infrastructure-related projects. They also reminded members about the pending funding for the cotton projects outlined in their “Route du Coton” documents (WT/CFMC/W/72 and WT/CFMC/W/73). Afreximbank said it is looking into project proposals to support beneficiary countries.
The WTO Secretariat presented the latest edition of the “Evolving Table on Cotton Development Assistance” (WT/CFMC/6/Rev.34), which provides updates on the implementation and disbursement of development assistance for cotton. Several new projects were reported by France, the Netherlands, Brazil and Japan.
The table shows an increase in the number of active projects in cotton-specific development assistance, with a total of 31 projects amounting to USD 277 million. However, there has been a decline in agriculture and infrastructure-related development assistance, which amounted to USD 2.04 billion, down from USD 2.07 billion.
Some members reported on their recent efforts to strengthen South-South cooperation in the cotton sector and said they would report new projects for inclusion in the evolving table.
The WTO Secretariat presented its new WTO e-learning course on cotton and invited members to enrol in this online training to enhance their understanding of cotton and its importance for millions of people around the world.
A video about how to use the Cotton Portal is available here.
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