US offers to eliminate duties on Cotton, Africa says it's not enough

Friday, December 16, 2005

"The United States is willing, under the duty-free, quota-free commitments we will make, to provide duty free access cotton for these West African countries" the US trade representative announced at the WTO talks in Hong Kong Thursday. The US is under heavy pressure to drop Cotton tariffs and subsidies.

Mali, Burkino Faso, Benin, Chad, and Senegal complain that the tariff free offer does not address the subsidies United States provides to domestic cotton growers. Some countries claim the subsidies against the WTO's anti-dumping policy.

"The real problem for African cotton producers is dumping on the world market, resulting from domestic and export subsidies. That is why we need to agree this week on additional disciplines on domestic support" EU Trade Commissioner Peter Mandelson said.

"They don't take in any cotton. They export cotton. Their textile industries have all moved abroad. Why would they import any of our cotton? What they need to do is halt the subsidies. Without subsidies they can't produce" Francois Traore, president of the African Cotton Producers Association, said.

Portman argued cutting global tariffs are as least as important as cutting subsidies.

India has a 10% tariff on cotton imports, under current WTO rules it could raise the tariff to 100% at any time. China imposes a 1% tariff on the first 4 million bales, after which a tariff of 5% to 40% is applied. By comparison the US allows a small amount of cotton at low duties and then applies a 20% on the remainder.

A bill in the US Congress this week contains a cotton program known as Step 2, which pays exporters and millers to buy US cotton. The WTO has declared the program illegal.

"We know with certainty that it's the US subsidies that are causing problems for our farmers." Mamadou Salissou Habi Niger's minister of trade said.

African cotton producers have said that they will not endorse any deals that emerge from the Hong Kong talks if rich countries do not reduce cotton subsidies to their own farmers.

Sources

Doug Palmer. "US offers to eliminate duties on West African cotton" — Reuters, December 15, 2005
"WTO MEETING - African cotton producers say US offer 'will change nothing'" — Forbes, December 15, 2005

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