By  on November 22, 2004

GENEVA — The World Trade Organization agreed Friday to examine trade-distorting cotton policies and to consider how to help the world’s poorest nations improve their trade in the agricultural commodity.

Cotton has been a volatile issue in the 148-member WTO for the past year and a half, and a disagreement over subsidies paid by rich nations to their cotton farmers led a contingent of poor nations to walk out of a September 2003 WTO meeting in Cancún, Mexico, leading to the scuttling of that forum.

Samuel Amehou, the WTO ambassador of Benin, one of the poor West African cotton-producing nations that has been leading the fight, said all subsidies “should be removed” because they depress world cotton prices. The cotton issue is contentious because it is one of the few market sectors in which poor nations believe they have some natural competitive advantages.

The WTO’s special panel on cotton grew out of a deal reached in July between the U.S. and Benin, Burkina Faso, Chad and Mali.

The WTO this year found that subsidies paid by the U.S. to its cotton farmers violated global trade rules, a decision that the U.S. is appealing. Subsidies by wealthy countries are estimated to cost poorer nations hundreds of millions of dollars annually in lost exports.

The cotton committee will be open to all WTO member and observer nations, as well as international organizations. Its mission is to focus on trade-distorting policies affecting the sector, including market access, and to examine the effects of domestic and export subsidies.

The committee also will look at how the WTO and other multilateral agencies, such as the World Bank and the International Monetary Fund, may help poor cotton nations enhance trade and development of cotton.

— J.Z.

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