CANCUN, Mexico — Trade envoys from four African countries seeking immediate relief for their cotton farmers from the developed world’s subsidies asked for $300 million in immediate compensation and threatened to derail the global trade...
CANCUN, Mexico — Trade envoys from four African countries seeking immediate relief for their cotton farmers from the developed world’s subsidies asked for $300 million in immediate compensation and threatened to derail the global trade talks if a resolution is not reached here.
“We believe the credibility of the world trade system depends on the ability to resolve this question,” said Choguel Kokalla Maiga, minister of industry and commerce for Mali. “We’ve made our case in a convincing and pertinent way, but if there is still no solution here, how can we expect anything concrete from international institutions beyond just discourse?
“We will definitely question the meaning of our presence in this institution and the meaning of the consensus now looked for,” he said.
The African countries — Mali, Benin, Burkina Faso and Chad —have called on the World Trade Organization to approve an immediate reduction of cotton subsidies, which they claim drastically reduces global cotton prices, with “the view of eliminating them.”
In the interim, the countries want a system of compensation payments of about $300 million for losses caused by what they charge is the sale of subsidized cotton on world markets, he said.
Peter Allgeier, deputy U.S. trade representative, said Thursday afternoon that the U.S. was still in negotiations with the African countries and would not comment on their request.
He noted Supachai Panitchpakdi, director general of the WTO, would work with the developed nations and the four African countries.
The cotton issue and other agricultural divides, particularly among 21 countries led by Brazil, India and China, who have banned together against the U.S. and European proposal on agriculture, have dwarfed all other negotiating initiatives.
WTO delegates were slated to meet Thursday afternoon for the first informal meeting on industrial market access, where countries will hash out differences on how to slash tariffs on all products.
Developed countries have vowed to give poor countries “special and differential” treatment, which means longer tariff phaseouts and less-than-full reciprocity. The talks on tariffs for industrial goods are at an impasse and sharp differences remain.
But the cotton-subsidies issue was clouding the future of the talks on Thursday.“It is not possible for us to pursue a development strategy [in the WTO round] without a resolution of the cotton issue,” said Fatiou Akplogan, minister of industry and commerce for Benin at a briefing for reporters Thursday.
He said cotton production in Benin represents about 10 percent of gross domestic product, 40 percent of all exports and 70 percent of all agricultural exports. But cotton farmers in Benin are facing depressed cotton prices due to huge subsidies paid by richer countries to their cotton farmers, he said.
The African trade and commerce officials claimed they are not targeting a specific country, but the U.S. is the largest cotton subsidizer in the world.
“This initiative is not meant to go against any one country,” said Akplogan. “It is just saying ‘no’ to unfair competition.”
Maiga said the countries are currently reviewing the proposal made by the U.S. on Monday to include the cotton subsidy issue in one sectoral negotiating group with man-made fiber, apparel and textiles.
Benoit Ouatarra, minister of commerce for Burkina Faso, said, “This proposal by the U.S. is important, but the U.S. is making the proposal larger than our simple problem here. Our proposal is specific: To eliminate subsidies that cause unfair competition for impoverished countries.”
Importer and retail trade and lobby groups attending the talks expressed frustration Thursday about the proposal to link cotton subsidies with negotiations on textile and apparel tariffs, and called for a meeting with trade officials on the matter.
“We are skeptical about their plan because we think it is less likely they will get an agreement on tariffs,” said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles and Apparel.
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