Sommaire: 6 February 2008, Brussels - Cotton: A Development Priority
The cotton sector in Benin, Chad, Burkina Faso and Mali employs around 2 million workers. This means that in these countries about 15 million people depend on cotton production and export for their living.
In the major cotton producing African states, cotton accounts for between 50 and 80 percent of exports. Any downward pressure on cotton prices puts these people at serious risk. The subsidisation of cotton exports by developed countries has a disastrous effect on prices for these countries, and that is why the EU has called for the elimination of all forms of exports refunds for cotton.
The EU has led the way in reforming its domestic policies on cotton. EU cotton subsidies have no distorting effect on the international market, and the EU pays no export subsidies for cotton. Under the Everything But Arms system all African cotton producers have tariff and quota free access to the EU market.
Cotton prices dropped to a historic low in the early years of the 21st century. In response, in July 2004 in Paris, the European Commission organised a Cotton Forum to bring together representatives from the EU and Africa. The result of this conference was a Cotton Action Plan. This Action Plan has guided the agenda for development cooperation over the last three years between the EU and our partners in Africa and will continue to do so.
In Mali in April 2005 EU Trade Commissioner Peter Mandelson set out a strong new EU commitment to concrete measures to assist cotton-producers in West Africa through the Doha Development Agenda. In November 2005 he called for the EU's commitments to cotton producers to be adopted by all developed countries at the Hong Kong WTO Ministerial.
As part of the DDA process the EU has proposed a clear line promoting fair competition which could assist African cotton producers to develop their full potential and explore their competitive advantages. The EU has urged exceptional treatment for cotton.
• The elimination of all forms of export subsidy for cotton in all developed countries; this achievement would be an outstanding step towards international fair competition
• The provision of duty-free market access for cotton imports originating in LDCs by all developed and advanced developing countries; this has been acknowledged on current draft DDA modalities: all developed countries, and developing countries in a position to do so, will provide Duty-Free access for imports of cotton from LDCs. The EU also believes all non-LDC developing countries should also open their markets to LDC cotton exports.
• A substantial reduction of trade-distorting domestic support for cotton producers in developed countries. Our cotton reform set the example of this strong commitment. Since 2006 65% of EU support for cotton farmers were decoupled from production. The remaining support was moved away from the most-trade distorting support "box" (Amber), to a more trade friendly (Blue) and has now a negligible effect on global trade.
For the implementation of the EU-Africa Partnership on Cotton, the EU has made available substantial financial assistance. More than € 260 million has been allocated to cotton programmes and projects since 2004. This has been a substantial and major source of support that can be used in mitigating negative effects of the fall in cotton prices on the macro-economies of the countries concerned. This total amount is by far the most important contribution to cotton by any development partner.
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