Before the meeting EU Trade Commissioner Peter Mandelson said: “In Mali, and the rest of West Africa roughly 15 million people depend on cotton for their living. In the major cotton producing African states, cotton accounts for between 50 and 80 percent of exports. Collapsing cotton prices on the world market, driven down by subsidies in the developed world, are putting people at serious risk. In the face of the hardship experienced by African cotton producers the EU is committing to exceptional treatment for cotton in the WTO negotiations. In my area of responsibility, we are calling for the WTO membership to fast-track cotton in agriculture negotiations and to ensure that wide-ranging agreements on cutting and eliminating cotton subsides are in place from the first day following a final Doha agreement. We think that the Hong Kong WTO Ministerial Conference is the moment to deliver on the promises made at the time of the July 2004 Framework agreement.”
The EU has led the way in reforming its domestic policies on cotton. EU cotton production has no distorting effect on the international market, and the EU now 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. As of 2006 65% of EU support for cotton farmers will be decoupled from production. The remaining support will have a negligible effect on global trade.
Using the DDA to help cotton producers in Mali
As part of the DDA the EU has proposed immediate benefits for West African cotton producers:
* The elimination of all forms of export subsidy for cotton;
* The provision of quota and duty-free market access for all cotton imports;
* A substantial reduction of trade-distorting domestic support for cotton producers;
The EU has argued that these commitments should come into effect from day one of the implementation period final Doha Agreement, reflecting the urgency of the situation faced by cotton producers in West Africa. The EU will in due course call on its partners to offer the same.
Investing in development in Mali
Through its funding instruments the EU and invests heavily in development in cotton-producing West African countries. In total, the cotton-related support to Africa committed by the EU and the Member States has a value of well over € 200 million. In Mali, the support amounts to 44.2 million euro since 2004/2005 that is committed either as budget support or through technical assistance which aims to improve the competitiveness of the cotton sector.