At WTO “Cotton Day” on 19 June, the Cotton 4 producers —Benin, Burkina Faso, Chad and Mali — and other WTO members discussed with donors the lessons learned from recent cotton assistance projects. The need for both private and public funding and risk-mitigating guarantees for these projects emerged as some of the ways to make development assistance more effective. WTO members also discussed the latest state of play in cotton negotiations since the 11th Ministerial Conference at the end of last year.
Deputy Director-General Alan Wolff chaired the discussions on cotton assistance under the Director-General’s Consultative Framework Mechanism on Cotton, with the aim of stimulating dialogue between cotton assistance beneficiaries and current or potential donors. The blending of private and public funds for cotton projects and the inclusion of risk-mitigating guarantees in partnership agreements emerged as priorities from the discussions. The European Union offered to organize a technical session to discuss some of these issues in detail.
The discussions were followed by a meeting chaired by Ambassador Deep Ford to review WTO members' trade-related cotton policies. In this meeting, the Cotton 4 stressed the need for all members to engage actively in cotton negotiations to achieve a measurable outcome on cotton by the 12th Ministerial Conference (MC12).
New functions of the Cotton Portal, launched at the end of last year, were also showcased during the meeting.The next cotton day is tentatively scheduled for the last week of November 2018.

Cotton development assistance projects
Cotton-producing countries welcomed the WTO Secretariat's update on the Director-General's Evolving Table on Cotton Development Assistance, which reflects trends in cotton assistance projects in the past few years.
In a cover note accompanying the table, Director-General Roberto Azevêdo highlighted the consistent level of cotton-specific development assistance provided by donors, both in total number of projects (currently 26 active projects) and the value of the projects (commitments of USD 204.2 million) as of June 2018. Disbursements decreased slightly compared with the previous reporting period, to USD 96.7 million, due to the recent completion of three projects. The “evolving table” is updated twice a year by the Agriculture and Commodities Division of the WTO.

The Cotton 4's "Cotton Roadmap Project" and the "Pan African Cotton Investment Programme" of the African, Caribbean and Pacific countries (ACP) Group were discussed. The “Cotton Roadmap Project” seeks to develop the cotton sector by improving local processing capacity and expanding cotton-to-textile value chains at the regional level. The ACP's "Pan-African" project aims at using private sector funding to boost the cotton sector and reduce poverty in the region. Donor agencies acknowledged the value of the two proposals and vowed to enhance cooperation in providing project implementation support.
Participants noted that cooperation between developing countries has yielded some very positive outcomes. Pakistan outlined its new partnership with the C4 while other members shared their own experiences and committed to provide more financial and technical support for the Cotton 4.
Donor agencies shared their experiences from cotton assistance projects as well as information on new funding mechanisms and future priorities. Deutsche Gesellschaft fürInternationaleZusammenarbeit (GIZ- Germany) announced that a new global project totaling EUR 18 million was being developed. The Directorate-General for International Cooperation and Development (DG-DEVCO) of the European Commission shared lessons learned from past projects and highlighted the new elements of its development strategy for cotton. The Cotton 4 and other members sought further information and called for a presentation to be scheduled regarding DEVCO's new programme. The Chair also suggested that DEVCO reach out to international finance institutions to take part in future WTO cotton days.
The African Export-Import Bank (Afreximbank) introduced the "African Commodities Initiative" (Africoin), a roadmap for adding value in Africa's cotton market, and highlighted some key interventions of the Bank in the cotton sector. It outlined significant business opportunities for cotton farmers and emphasized that low risk and commercial profitability are key criteria in selecting projects.

WTO members' cotton policies and negotiations
In his briefing on the state of play in cotton negotiations since MC11, Ambassador Deep Ford highlighted the Cotton 4's call "to resume work in Geneva and redouble efforts, with a view to reaching concrete and measurable outcomes as soon as possible on trade distorting cotton support".
WTO members welcomed the Secretariat's background paper TN/AG/GEN/34/Rev.8, an update on all cotton-related trade policies drawn from members' notifications and other submissions to the WTO, including replies to the Secretariat questionnaire circulated on 24 January and relevant information from members' trade policy reviews.
The Cotton 4 reiterated the importance of cotton to economic growth and development in least developed countries (LDCs) and urged all members to engage actively in negotiations in order to achieve a substantive outcome on cotton subsidies by MC12. The Cotton 4 highlighted the need for updated information and in-depth analysis of the impact of domestic support to cotton. They also suggested considering a possible expansion of the list of cotton-derived products for which LDC exports are subject to duty-free quota-free access. Several members reaffirmed their readiness to engage in the negotiations on cotton, possibly through incremental steps. One member said it could possibly be a stand-alone issue.
“Cotton is a topic of key importance in the WTO," said Ambassador Deep Ford, which "has often been referred to as a litmus test for the WTO". He urged members to demonstrate "flexibility and creativity in the search for new paths" and to "engage differently and use time differently to achieve outcomes sooner rather than later". He concluded that this meeting had been a good preparation for the next meeting of the Committee on Agriculture in special session on 16 July.

Trends in cotton trade
Kai Hughes, the Executive Director of the International Cotton Advisory Committee (ICAC), analyzed the major trends in cotton trade, focusing in particular on the situation of African cotton in world trade.
African cotton yields have continued to remain flat since the 1990s whilst world average yields have risen by 40 per cent, he said.  African average yields are now 64 per cent lower than world average yields.  He pointed out that in Tanzania, Zimbabwe and Uganda women play a major role in cotton farming.
The costs associated with producing cotton in Africa are extremely competitive with the rest of the world except in a few countries where the high costs of transportation and inputs have helped raise costs, Mr Hughes highlighted. He underlined the importance of the ginning process in raising quality levels, which could play a crucial role in improving cotton producers’ competitiveness. He also highlighted the development by the ICAC of a ‘Soil Health App’, which will help farmers improve their productivity. It is hoped that the technology can be extended to monitor pests and disease.
Mr Hughes noted the world's cotton consumption is expected to continue growing in 2018-19 while cotton production is expected to fall. Cotton prices have remained relatively high. The level of subsidies to the cotton sector as measured by ICAC increased in 2017-18. Another issue he highlighted is how the cotton sector can co-exist with man-made fibres in the long term and the need to explore new markets to secure a strong future for the cotton sector.

New features of the cotton portal
A new video on the launch of the Cotton Portal launch was presented to participants. The Cotton Portal, developed jointly by the WTO and the International Trade Centre (ITC), was launched in Buenos Aires on 11 December 2017. New features of the Portal will allow users to find even more practical information for better trade. These new features include an "export potential" map and the contact details for buyers in export markets. Historical data on cotton supply, use by country and key statistics provided by ICAC, including harvested areas, production, consumption, trade and stocks, have also been added to the portal.

Source: World Trade Organization