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Main / News / Business news
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Members mull new details in "cotton four" proposal |
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03/10/2006
A number of countries supported the direction of the proposal, which was in a document TN/AG/SCC/GEN/4, submitted the day before the meeting — meaning it was only available in French at the meeting. However, all speakers said they needed more time to look at it, several saying they needed to see the English version first.
The formula (spelt out below) is designed so that the cut in Amber Box (or AMS) subsidies for cotton are deeper than those for agriculture as a whole, an objective agreed at the Hong Kong Ministerial Conference in December 2005 (see background explanation).
The four proposing countries — Benin, Burkina Faso, Chad and Mali — have also designed the formula so that the additional cut for cotton would be greater if the general cut for agriculture is more modest; the additional cut would not need to be large if the general reduction for agriculture is already ambitious. These cuts would take place over a period that is one third of the general implementation period for AMS cuts.
The paper goes further, even on the Amber Box: it also calls on WTO members to agree by the end of April (when the modalities are due to be agreed) to eliminate all trade-distorting domestic supports by a date to be agreed on before the end of the Doha Round (so that the end date would be part of the “single undertaking”). That date would be after the end of the Doha Round.
It includes a proposed ceiling on Blue Box subsidies for cotton of one-third of the ceiling on the Blue Box for agriculture as a whole.
Benin, which has just taken over as coordinator of the African Group, said the group wholly endorses the proposal. Supporting the general approach, if not yet the specifics, were China, Brazil, Paraguay and some others, even though they still needed time to study the proposal.
Some countries, such as the EU, China and Australia, welcomed the new paper for clarifying an issue. The Cotton Four’s previous document (TN/AG/SCC/GEN/3) had called for Amber Box cuts on cotton that are three times the cuts for agriculture as a whole. This had suggested that if the general cuts were over 33%, the cuts for cotton would be over 100%, they said, whereas the new formula has clarified this.
New Zealand broadly supported the call for the total elimination of trade distorting supports. But the US said it cannot discuss this document substantively until it knows what is going to happen for agriculture as a whole and until it has seen the English version. A substantial result on domestic support for cotton requires a substantial result in all three pillars in agriculture, the US said.
Development issues
The Secretariat reported on consultations on the development aspects on 16 February, when several members reported new developments in the assistance they are providing and recipient countries strongly supported the reported implementation of these programmes. Some called for the assistance to the extended to other African countries in similar circumstances, the Secretariat reported.
The consultations on the development side are chaired by Stuart Harbinson, special advisor to the director-general.
The formula
If
Rg = the AMS cut for agriculture in general, and
Rc = the AMS cut for cotton
Then
Rc = Rg + [(100 – Rg) x 100] / 3 x Rg
(The cut for cotton equals the general cut plus an adjustment term that gets smaller if the general cut is bigger)
The Cotton Four’s paper gives some example calculations:
A 60% general cut would produce an 82.2% cut for cotton (a difference of 22.2 percentage points)
A 70% general cut would produce an 84.3% cut for cotton (a difference of 14.3 percentage points)
An 80% general cut would produce an 88.3% cut for cotton (a difference of 8.3 percentage points)
A 90% general cut would produce a 93.7% cut for cotton (a difference of 3.7 percentage points)
A 100% general cut would produce a 100% cut for cotton (a difference of 0 percentage points)
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