WASHINGTON — The U.S. is offering new trade benefits and financial assistance to aid cotton production in least-developed countries, particularly West African nations, which have been a stumbling block in reaching a global trade accord to reduce tariffs among World Trade Organization members because of their opposition to cotton subsidies in industrialized countries.
“For decades, the United States has been a strong partner to least-developed countries,” U.S. Trade Representative Ron Kirk said in advance of the 8th Ministerial of the WTO, considered a critical meeting for trade ministers trying to revive the long-stalled Doha global trade negotiations. “We want to see these partners have a greater stake in global trade and overcome constraints inhibiting faster progress. This is why, even before the announcement of these new initiatives, the United States has been one of the largest single-country providers of trade-related technical assistance and why President Obama has made partnerships with developing countries, including LDCs, a key component of his trade agenda.”
Among the new initiatives to help boost trade and investment for LDCs is a commitment to renew an expiring technical assistance program for West African cotton producing countries, which include Benin, Chad, Burkina Faso and Mali; expansion of duty and quota free benefits for Upland cotton grown in LDCs, and more support for countries seeking to use U.S. trade preference programs.
A USTR fact sheet said the U.S. plans to introduce a new cotton-related trade capacity program once the current program expires in April. The U.S. plans to provide up to $16 million over four years (subject to congressional approval in the budget process) for the program to drive private debt to investment funds and organizations that will make debt and equity investments in small and medium-size companies operating in West Africa’s agriculture industry. The main focus will be to improve the efficiency of the cotton sector in the four West African countries, known as the C4.
The U.S. also pledged to take steps to provide duty free, quota free treatment to imports of Upland cotton fiber from LDCs for the first time. The government must go through a review process to add the fiber to the Generalized System of Preferences and Congress must approve the addition to GSP.
U.S. trade officials also pledged to work with Congress next year to renew the third country fabric provision for 23 LDC sub-Saharan African countries in the African Growth & Opportunity Act through 2015.
“Cotton producers in West Africa face significant challenges even in these times of strong prices, so we support the continuation of an outreach program like [the West African Cotton Improvement Program], which can provide West African farmers an opportunity to increase their income to benefit their families and communities,” said Charles Parker, chairman of the National Cotton Council.
In Geneva on Wednesday, China also announced a three-year cooperation agreement valued at $20 million with the four West African nations. Chen Deming, China’s minister of commerce, said his country would support cotton production efforts in these countries, including the introduction of new varieties of cotton, along with agricultural machinery and pesticides. Chen said he also envisaged the relocation of some Chinese textiles and apparel production going to African countries, some of which has already occurred in the form of joint ventures in industrial zones with African companies.
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