The Cotton Proposal .
This issue was original raised in the General Council and Agriculture Committee by Benin, Burkina Faso, Chad and Mali. It describes the damage that the four believe has been caused to them by cotton subsidies in richer countries, calls for the subsidies to be eliminated, and for compensation to be paid to the four while the subsidies are been paid out to cover economic losses caused by the subsidies. The proposal seeks a decision in this Cancun Ministerial Conference. They described how cotton is important to their economies, and how in some years total subsidies in rich countries amount to almost as much as the value of world trade in cotton. They are competitive, they argued, but find it difficult to compete with the subsidies. They described their proposal as a solution that would allow them to participate more in the international trading system and to use trade in order to lift themselves out of poverty. By making the proposal in this way, they are demonstrating their faith in the trading system and is equitable rules, they said. WTO Director General Supachai urged ministers to consider the proposal seriously. Remarking that he did not usually intervene in debates like this, Dr. Supachai said that the issue is important. He observed that the four are not asking for special treatment, but for a solution based on a fair multilateral trading system. He also said the proposal underscores the need of ambitious results in the agriculture negotiations as a whole, based on the Doha mandate. The proposal received support from Canada, Australia, Argentina, Cameroon, Guinea, South Africa, Bangladesh (for least developed countries), Senegal, and India- either for the whole proposal or key parts such as phasing out subsidies. Several of these countries said other products face similar problems. The US said that distortions in cotton are not only caused by subsidies in the sector, for example, Industrial policies that support production for synthetic fibers, high tariff on finished products and good harvest caused by favorable weather are also important reasons for falling cotton.
However, the Tokyo Round had mixed results because it failed to come to grips with problems affecting farm trade and developing countries (C. ... Nevertheless, a series of agreements and arrangements, referred to as codes, did emerge from the negotiations " in an effort to control the proliferation of non-tariff barriers, such as voluntary export restraints and orderly marketing agreement- (Paul R. ...