Deputy Director-General Jean-Marie Paugam, acting on behalf of Director-General Ngozi Okonjo-Iweala, chaired a meeting on development assistance for cotton. Ambassador Alparslan Acarsoy of Türkiye, the chair of agriculture negotiations, facilitated the discussion on the trade-related aspects of cotton.
Chair: Focus on narrowing gaps in negotiating positions, C-4’s proposal for MC13
Ambassador Acarsoy chaired the 20th dedicated discussion on trade-related developments for cotton. In his introductory remarks, he reflected on the recently concluded Senior Officials Meeting which he said was”an opportunity to take stock of the negotiations and for senior officials to listen to each other”.
On the way forward, he stressed that MC13 would not be the end of the road for the overall agriculture negotiations, and cotton more specifically, and noted that his objective was to “initiate a process that will be endorsed at MC13 to continue evidence-based negotiations across the board immediately after the Conference with clear guiding principles and renewed engagement based on the work undertaken so far”.
While noting that cotton should continue to be addressed in light of members’ commitments at the Hong Kong Ministerial Conference in 2005 to address cotton “ambitiously, expeditiously, and specifically within the agriculture negotiations”, Ambassador Acarsoy further encouraged members to engage with each other to find commonalities and progressively narrow the gaps in their negotiating positions.
Chad, the coordinator of the C-4, and Côte d’Ivoire noted the lack of progress made in reducing trade-distorting domestic support. The C-4 announced the group will be shortly submitting a proposed MC13 decision on cotton, with a view to achieving consensus before MC13.
World Cotton Day 2023, cotton value chain development in LDCs
In his opening remarks to the meeting on cotton development assistance, DDG Paugam reflected on World Cotton Day (WCD) 2023 held in Vienna, Austria, where the WTO Director-General highlighted the importance of the WTO’s work on cotton, and the limited time remaining for members to discuss priorities for the forthcoming ministerial.
Members expressed their appreciation for the success of WCD 2023 while recognizing the significance of cotton to their respective economies. International organizations such as the Food and Agriculture Organization (FAO) and the United Nations Industrial Development Organization (UNIDO) also shared remarks about World Cotton Day.
The International Cotton Advisory Committee (ICAC) announced its intention to host WCD 2024 and proposed to do so in the Global South. ICAC also made a presentation on the future of African textiles where it highlighted Africa’s potential in the cotton and textile value chain given its access to trade concessions, its large market and sustainable cotton. Also highlighted were various development programmes and diversification schemes which African countries can adopt to develop a robust textile value chain.
The C-4 emphasized the importance of shining the spotlight on cotton owing to its economic and social contribution to their economies and called for continuous support from technical and financial partners to develop the cotton sector.
Market outlook and transparency
ICAC also shared its outlook on the world cotton market and prospects for the 2023/2024 season. ICAC anticipates a slight rise in production worldwide, and a more significant one in West Africa. Consumption is expected to remain short of production in 2023/2024, with consumers of cotton products remaining the same, led by China, India, Pakistan, Türkiye, Bangladesh and Viet Nam.
In the 2023/2024 season, trade in cotton is expected to revive slightly to reach 9.2 million tonnes, up from the previous season exports of 8 million tonnes, with West Africa expected to increase its share in total exports from 11% to 16%.
ICAC anticipated that high price volatility would continue during the new season, due to uncertainty regarding the weather, the spread of pests and the global economic environment. ICAC also pointed out the close relationship between cotton prices and planted areas, and conversely the negative correlation between prices and government support. The level of support as measured by ICAC increased from USD 4.8 billion in 2021/2022 to USD 8 billion in 2022/2023.
The WTO Secretariat introduced its updated background paper on cotton, which compiles up-to-date information and data from members’ notifications and other submissions on export subsidies, domestic support and market access. The background paper also captures members’ latest responses to the questionnaire on cotton policy developments, as well as relevant information on cotton markets and policies included in WTO Trade Policy Review reports. In view of the low response rate to the questionnaire, Ambassador Acarsoy, along with a few members, called upon the membership, particularly key players in the cotton market, to be more transparent with their policy sharing.
Members also exchanged views on market access, domestic support and export competition. The C-4 called upon WTO members to show greater political will in working towards effectively implementing the Nairobi Ministerial Decision adopted in 2015. The lingering social and economic impact of the COVID-19 pandemic on African cotton-producing countries was also discussed at the meeting.
Webinar on Cotton Portal
On 7 November, the International Trade Centre (ITC), in partnership with the WTO, hosted a French-speaking webinar aimed at increasing members’ ability to utilize the Cotton Portal. The webinar was part of efforts to raise awareness on this tool and was well received, with members suggesting how to continue improving it. Launched in December 2017 at the 11th Ministerial Conference, the Cotton Portal provides cotton producers and traders with relevant trade information in order to enhance decision making for small businesses in developing countries, policymakers, associations and other beneficiaries.
Update on WTO-FIFA initiative
Members were updated on progress relating to the WTO Secretariat and FIFA Memorandum of Understanding (MoU), which seeks to examine how international trade and football can serve as catalysts for economic growth and social inclusion. Under the cotton programme, the WTO and FIFA are exploring opportunities to enhance the participation of the C-4, Côte d’Ivoire and other interested countries in global football apparel value chains.
Phase one of the project will involve conducting a baseline study led by the United Nations Industrial Development Organization and the International Trade Centre to understand supply and demand sides of the cotton-textile-clothing value chain in the C-4 and Côte d’Ivoire. An international consultant has already been selected, and plans are underway to choose the national consultants. An estimated timeline of eight months is allotted to the completion of studies on the current processing capacity, and perspective supply and demand analyses.
Members welcomed updates on the progress. Some members acknowledged the support that the WTO-FIFA MoU will provide to improving value chains in general. Others welcomed an expansion of the scope of the project and urged that a holistic approach be adopted which can alleviate underlying issues such as the energy problem encountered in processing and developing cotton.
Other matters
The WTO Secretariat updated members on the latest edition of the “Evolving Table on Cotton Development Assistance” (WT/CFMC/6/Rev.35). The Secretariat reported the inclusion of seven active cotton-specific projects, as notified by France, the European Union, the Netherlands and the UN Food and Agriculture Organization.
IDH Sustainable Trade delivered a presentation focused on creating a climate-resilient landscape in Chad’s cotton-growing region. The approach addresses sustainability challenges in cotton production using a holistic and integrated approach to soil management, involving multi-stakeholder collaboration and field-level projects. While the initiative is being supported by various donors, the group noted that there is a need to involve additional partners to support the successful implementation of this initiative and its possible expansion.
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