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Members discuss progress on WTO-FIFA cotton initiative, trade trends, World Cotton Day

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Ambassador Alparslan Acarsoy of Türkiye, the Chair of the WTO agriculture negotiations, facilitated the discussion on the trade aspects of cotton, while Deputy Director-General Jean-Marie Paugam, acting on behalf of Director-General Ngozi Okonjo-Iweala, chaired the meeting on the development dimension of cotton.

Chair: “Solid basis” for cotton negotiations to build upon

WTO members regret the absence of a negotiating outcome at MC13 on agriculture, including cotton, Ambassador Acarsoy said, especially as the text on cotton was considered largely stabilized.

He noted that Brazil has introduced a draft decision on agriculture which will be discussed at the next meeting of the General Council on 21-22 May.

The Chair also said he believed that members have a solid basis on which to restart the negotiations on cotton. “Our goal should be to engage as soon as possible in results-oriented, intensive discussions based on the work done thus far, with a view to achieving a substantive outcome at MC14, taking into account the singularity of cotton,” he told the meeting.

Some members exchanged views on how to resume the negotiations on agriculture and cotton. Many said that existing texts could form a basis for the continuation of discussions, including proposals made before MC13 and the text that was under negotiation at the ministerial conference, as well as the recent Brazilian proposal. Some WTO members also underscored the importance of reducing trade-distorting domestic support and enhancing market access for cotton.

The C-4+ recalled the mandate of the Hong Kong Ministerial Declaration, and urged members to address cotton “ambitiously, expeditiously, and specifically” within the agriculture negotiations. They said they were encouraged to see the evolution of WTO members’ positions, and expressed optimism about making progress on agricultural issues, especially cotton, by the next Ministerial Conference (MC14), which is due to be held in Cameroon.

Market trends and transparency

The International Cotton Advisory Committee (ICAC) highlighted that global cotton production increased slightly, by 1%, while cotton prices dropped by 7% in the 2023/24 season. ICAC noted that the downward trend in commodity prices, including for cotton, makes it challenging for farmers to decide which crops to plant, impacting future global agricultural production and market dynamics. ICAC also presented details of ongoing projects in Africa that aim to help farmers respond better to market challenges.

The International Trade Centre (ITC) introduced the updated Cotton Portal, in partnership with the WTO, highlighting new features and enhanced functions for market research and learning.

The WTO Secretariat introduced its updated “background paper” (TN/AG/GEN/34/Rev.20 and two addenda) compiling the latest information on cotton policies in domestic support, market access and export competition.

“Partenariat pour le Coton”, World Cotton Day 2024

Summarizing the results of the WTO-FIFA high-level event in Abu Dhabi, DDG Paugam stated that the “Partenariat pour le Coton” marks a new stage of WTO-FIFA cooperation and gives a clear visual identity to future activities and products that will emerge from this platform.

The FIFA representative briefed participants on the extensive media coverage of the Abu Dhabi event and reiterated the organization’s commitment to delivering concrete action with partners for the C-4 and African countries at large.

Reviewing advances linked to the WTO-FIFA cotton project, DDG Paugam said: “Following the launch of the “Partenariat pour le Coton” brand, five studies are being prepared on investment conditions in cotton-to-textile manufacturing in the C-4+ countries (C-4 and Côte d’Ivoire), focusing on products such as t-shirts and hoodies. The results will be released in June at the Global Review of Aid for Trade.”

Regarding the next steps of the project, the United Nations Industrial Development Organization (UNIDO) and ITC — two partners of the “Partenariat pour le Coton” — presented the preliminary results of the five baseline analyses on the current situation of the entire cotton-to-textile/apparel value chain in C-4+ countries mentioned by DDG Paugam. These analyses highlight challenges and opportunities for these countries to move up the value chain.  

The C-4+ countries welcomed the solid progress made on the WTO-FIFA initiative and stressed the importance of enhancing investment in infrastructure in the long run. Some participants suggested the need to build synergies among different projects.

Benin announced that it will host the 2024 World Cotton Day event on 7 October in collaboration with ICAC, marking the first celebration of this day on African soil. Several organizations expressed their full support for Benin and emphasized the importance of bringing to the centre of the stage African plans to develop the cotton sector. DDG Paugam confirmed that Director-General Ngozi Okonjo-Iweala will participate in the event in person.

Other ongoing projects on cotton development

The WTO Secretariat presented the latest edition of the “Evolving Table on Cotton Development Assistance” (WT/CFMC/6/Rev.36), which provides updates on the implementation and disbursement of development assistance for cotton.

The table shows an increase in the number of active projects in cotton-specific development assistance, totalling 42 projects amounting to USD 362 million in commitments. The table also indicates a constant decline in agriculture and infrastructure-related development assistance over the last five reviews.

The C-4 again expressed their concerns about the decreasing level of support for agriculture and infrastructure-related projects. They reiterated the importance of funding the regional cotton projects outlined in their “Route du Coton” documents (WT/CFMC/W/72 and WT/CFMC/W/73). They thanked African Export-Import Bank (Afreximbank) for its contribution and said that a total of USD 25 million is needed to invest in these projects so that C-4+ countries can improve the entire cotton value chain.

Participants also welcomed the other concrete technical work conducted by the WTO Secretariat, including the 26 March webinar on the severe impact of the cotton leafhopper pest in Western and Central Africa (WT/CFMC/W/98), organized in partnership with the UN Food and Agriculture Organization (FAO). The webinar explored innovative ways to combat pests without depleting soils and examined how to improve cotton production and quality.

Climate change, COVID-19

Higher temperatures will lower cotton yields and quality, ICAC warned, in a presentation highlighting the challenges that the sector faces due to climate change. ICAC also noted that the African cotton sector could positively contribute to storing carbon in the soil – potentially surpassing “net zero” targets for greenhouse gas emissions.

Participants commended ICAC for taking the initiative on this important topic, while some also shared details of ongoing national programmes aimed at helping the agriculture sector adapt to the changing climate.

Following a proposal put forward by the C-4+ , WTO members agreed to change the agenda item on “COVID and Cotton” to “Crises Affecting the Cotton Industry”, so as to include all events that affect the sector, including geopolitical tensions, price volatility and climate change.

Side events

Two side events took place on the margins of the Cotton Day event. First, on 6 May, ICAC and the Organisation of African, Caribbean and Pacific States (OACPS) organized a seminar focused on empowering sustainable cotton development across ACP countries.

Secondly, on 8 May, the WTO Secretariat, ITC and ICAC organized a seminar to promote the updated WTO Cotton Portal — a platform which provides producers and traders with comprehensive market information related to cotton.