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Burkina Faso Steadfast On Cotton Subsidy Issue

As efforts to wrap up a new world trade agreement by the end of 2008 remain uncertain, the largest sub-Saharan cotton-producing nation is standing firm on...

OUAGADOUGOU, Burkina Faso — As efforts to wrap up a new world trade agreement by the end of 2008 remain uncertain, the largest sub-Saharan cotton-producing nation is standing firm on its objection to U.S. cotton subsidies.

This story first appeared in the March 25, 2008 issue of WWD.  Subscribe Today.

“We are opposing them with all our efforts,” said Wilfried Yameogo, the permanent secretary in charge of follow-up on the privatized cotton sector in Burkina Faso. “They are deadly for Burkina Faso.”

Cotton production in the West African country, which is about the size of Colorado, has grown 19 percent annually during the past 10 years, but it’s hurting because of lower world cotton prices, the appreciation of the euro and U.S. government subsidies to the cotton industry, according to a February International Monetary Fund report.

Cotton represents 5 to 8 percent of gross domestic product in Burkina Faso, formerly Upper Volta, accounts for 50 to 60 percent of export earnings and is the main source of foreign exchange for the country, one of the poorest in the world.

In a recent interview here, Yameogo said that neither Burkina Faso nor the other major West African cotton producing countries of Benin, Chad and Mali would compromise on their demand for reductions in U.S. subsidies of as much as 82 percent, or more than $1.5 billion.

“I don’t understand how it’s possible that in the world of global commerce that is governed by clear rules, that a country like the United States with enormous resources can oppose the rules, while at the same time say they’re promoting open markets,” Yameogo said.

The World Trade Organization has found that multibillion dollar U.S. cotton subsidies violate global trade rules. The U.S. is the world’s biggest subsidizer of cotton and the WTO ruling has put it on the defensive in the Doha talks aimed at lowering tariff barriers.

In Burkina Faso, 25 percent of the 14 million citizens are dependent on cotton production and earn less than $1 a day per person, Yameogo said.

“It would completely change the economic structure of these lives if the U.S. would change its subsidies,” he said. “It would change their economic and social reality.”

The Cotton Four countries consult daily on the Doha Round talks, Yameogo said. He said Burkina Faso has asked for compensation measures and assistance in improving production and quality, but has so far been denied.

“Now, it’s clear…there will be no solution for Doha if cotton is not treated first and separately,” Yameogo said. “That is the stand of Burkina Faso and our president.”