 
  WORLD TRADE  
ORGANIZATION  WT/GC/83/Add.1 
3 December 2004 
 (04-5305) 
  
  
IMPLEMENTATION OF THE DEVELOPMENT ASSISTANCE ASPECTS OF THE 
COTTON-RELATED DECISIONS IN THE JULY PACKAGE 
 
Contributions by Proponents, Bilateral Donor Members, and
 
Multilateral/Regional Agencies  
 
Addendum  
    
 
    
TABLE OF CONTENTS
 
 
Page  
 
I. INTRODUCTION ................................................................................................................... .2 
II. PROPONENT COUNTRIES...................................................................................................2  
A. BENIN ............................................................................................................................... ...........2  
III. BILATERAL DONORS...........................................................................................................3  
A. EUROPEAN COMMISSION .............................................................................................................3  
B. FRANCE ............................................................................................................................... ......10  
C. JAPAN ............................................................................................................................... .........13  
D. UNITED STATES OF AMERICA ...................................................................................................14  
IV. MULTILATERAL AGENCIES............................................................................................18  
A. AFRICAN DEVELOPMENT BANK................................................................................................18  
B. DAC/OECD ....................................................................................................................... .......22  
C. FAO ............................................................................................................................ ..............26  
D. IMF ............................................................................................................................ ...............31  
E. ITC  AND JITAP.........................................................................................................................3 3 
F. UNIDO.......................................................................................................................... ............39  
G. WORLD BANK ...........................................................................................................................42  
V. LIST OF PARTICIPANTS IN THE CONSULTATIVE PROCESS.................................49  This document has been prepa red under the Secretariat's own 
responsibility and without prejudice to the positions of Members and to their rights and obligations under the WTO WT/GC/83/Add.1 
Page 2  
 
  
I. INTRODUCTION 
1. This document contains the verbatim contribut ions by cotton proponent countries, bilateral 
donor Members and multilateral/regional agencies and institutions.  These written contributions were 
made in the course of the first two rounds of c onsultations managed by the WTO Secretariat in the 
implementation of the July Framework Decision on the Development Assistance Aspects of Cotton.  
The summary of the contributions in this comp ilation has been included in the report by the 
Director-General contained in document WT/GC/83. 
II. PROPONENT COUNTRIES 
A. B
ENIN  
2. These consultations were long awaited and a rrive right on time, taking place after the 
Framework Decision adopted by the WTO General C ouncil at the end of July and just after the 
discussions we had this morning with the Chairman  of the World Bank and the Director-General of 
the International Monetary Fund (IMF) on the subj ect of "reinforcement of the cooperation between 
the IMF and the World Bank, in particular with regard to technical and financial assistance". 
3. Last July, the WTO Members decided to deal w ith the cotton problem in an ambitious, rapid 
and specific manner according to paragraph 1b on Agriculture, and paragraphs 4, 5 and 46 of 
Annex A. 
4. The Framework Decision which we reached in  July also underlines the need to deal 
simultaneously with both the development and tr ade aspects of cotton, taking into account the 
necessary coherence and complementarity that  exists between these two dimensions. 
5. Therefore, the conclusions and recomme ndations made at the Cotonou Workshop put 
particular emphasis on the need to ensure effec tive follow-up to this Workshop and a harmonious and 
effective coordination of the technical assistance which will be provided by the development partners 
(bilateral and multilateral). 
6. Paragraph 13 of the Cotonou Workshop conclusions  is very precise in this respect and should 
be used as the basis for our consultati ons on the follow-up actions to be done. 
7. In reply to your questions about the actions ma de by my country in the framework of the 
follow-up to the Cotonou Workshop, as well as on the as sistance that has since been received from the 
development partners, likewise on the inclusion of cotton in the "Poverty-Reduction Strategy Paper 
(PRSP)" and the "Programme Paper on the Account of the Millenium Challenge  of Benin", I can 
provide the following information: 
8. In its policy for agricultural promotion, the G overnment of Benin gives an important place to 
the production and exportation of cotton. 
9. This activity makes an important contributi on to Benin's total exportation revenue and 
agricultural revenue. 
10. The "Poverty-Reduction Strategy Paper (PRSP) in Benin 2003-2005" puts a particular 
emphasis on the production and exportation of ag ricultural products, including cotton production 
which represents the "backbone" of Benin economy.  WT/GC/83/Add.1 
 Page 3 
 
 
 11. In other respects, my country has very actively elaborated its "Programme Paper on the 
Account of the Millenium Challenge " and has associated the different socio-economic players to this 
task, to reflect the needs and specific situations  of the different components of Benin society. 
12. According to the information we received fro m our capital just before we came to these 
consultations, advanced discussions  on the Programme Paper on the Account of the Millenium 
Challenge  were held between the American side and th e Benin side during the prospection mission to 
Benin by the American person responsible for the Programme on the Account of the Millenium 
Challenge  and also during the mission to Washington by Benin officials at the beginning of October. 
13. The Paper on Benin's Programme takes the cotton sector into account. 
14. With regard to the partnership with the Europ ean Union, for the follow-up of the results from 
the Cotonou Workshop and the Euro-African Union Forum held in Paris on 5-6 July 2004, a first 
version of the Strategic Framework document had been drafted for the Forum.  As per the editing 
instructions given by the European Commission, th is document should be finalised and transmitted to 
them. 
15. This matter is being closely followed by the Be nin Embassy in Brussels and we will be able 
to obtain confirmation of the situation. 
16. In other respects, last summer the Japanese G overnment announced to the Benin Government 
its intention to grant technical and financial assistan ce to Benin within the fra mework of the follow-up 
to the Cotonou Workshop. 
17. This assistance relates to the improvement of the irrigation services and the development of 
human resources. 
18. The Benin Government would like to thank its bilateral and multilatera l partners who have 
already initiated technical and financial assistan ce programmes to support the cotton industry, 
according to the recommendations made at the Cotonou Workshop. 
19. The Benin Government would like to invite the othe r partners to do the same in order to attain 
the objectives that we have set for the cotton sector. 
20. We will very shortly be submitti ng to them requests for technical and financial assistance to 
reinforce the cotton industry.  These requests will relate at the same time to aspects linked to 
improvement of production and competitiveness as well as to transformation, development of exportation capacity and financ ing of the negative impacts. 
21. With regard to the commercial aspect of th e Sectoral Initiative on Cotton, my delegation 
would like that the Cotton Sub-Committee, as provided for in paragraph 4 of the July Framework 
Decision, be rapidly put into place so that the ne gotiations on cotton can be started according to an 
agenda to be determined. 
22. To finish, I would like to thank you all fo r being present at these initial consultations 
organised in the framework of the follow-up on cotton. 
III. BILATERAL DONORS 
A. 
EUROPEAN COMMISSION  
23. EU attaches a high priority to the cotton initiative, to both its trade and development 
components.  Important that progress is made in parallel on both sides of the issue.  Welcome WT/GC/83/Add.1 
Page 4  
 
 therefore the anticipated establishment tomorrow by the Agriculture Special Session of the Sub-
Committee on Cotton envisaged in the July Framework.   Today, of course, in this room, we are 
looking only at the development assistance aspects and I will be pleased to give you an overview of 
recent relevant activities in the EU. 
24. The context of work is sharpened following the recent steep drop in cotton prices on the 
world market.  Average prices are at only USD 48 cen ts per pound, 20 cents, or 30% lower than last 
season.  This is the sharpest drop in cotton pri ces since 1985/86.  The local currency equivalent of 
these prices is even more dramatic for francophone W est and Central Africa with the local currency, 
CFA being linked to the (currently strong against the dollar) Euro. 
25. Let me try to respond to your three questions. 
EU actions (taken + planned) to reflect cotton sect or-specific priorities in bilateral donor programmes:
 
 
(a) The EU Council endorsed in April 2004 the proposal for an EU-Africa partnership on 
cotton as an important specific application of the EU Action Plan on agricultural commodities, which aims at finding responses to the challenges facing commodity-
dependent developing countries.  The C ouncil urged the European Commission and 
Member States to address the issues raised, including the question of financial resources, and to undertake all necessary acti ons to implement it, while basing their 
activities on the principle of local ownership and effective coordination.  (See Annex 2 for the Council conclusions.) 
(b) In June, the EU requested 15 major cotto n producing countries in Africa to what 
extent they are committed to formulate and implement a national cotton strategy, 
which we see as an important tool prior to  extending support.  Ten countries reacted 
favourably (Benin, Burkina Faso, Chad, Madagascar, Mali, Mozambique, Senegal, 
Tanzania, Togo and Zambia). 
(c) The European Commission had prioritised ‘s upport to cotton’ as one of the areas that 
would be difficult for us to reject if the partner countries were to propose this as part 
of the 2004 Mid Term Review of the national indicative programs.  (In the context of nationally-owned development strategies, th e initiative of course has to come from 
the beneficiary countries.)  Consequently , the four proponents of the Cotton Initiative 
had proposed additional support to cotton. 
(d) On 5-6 July, the EU and Africa organised a Cotton Forum in Paris.  The EU and 
African countries endorsed the EU-Africa Co tton Partnership and agreed on a joint 
Cotton Action Plan.  The Forum contributed  to raising the trade and development 
priority to cotton at both the international and national levels.  The action plan agreed 
at the forum identifies seven areas for action:  (i) International trade;  (ii) National and 
regional cotton strategies;  (iii) Polici es and institutions;  (iv) Technological 
innovation;  (v) Risk management and fina nce;  (vi) Chain integration;  and 
(vii) Coordination.  (See annex fo r more details on each of these.) 
(e) The EC has relaxed the access criteria to the FLEX-instrument (part of the Cotonou 
agreement).  ACP countries can apply for s upport under FLEX in case of a shortfall in 
total export earnings. 
(f) Through the International Task Force on Commodity Risk Management, the EU 
advocated with success to broaden the pilots  on market-based risks instruments to the 
cotton sector in West Africa.  This has been  confirmed in the Cotton Action Plan.  As  WT/GC/83/Add.1 
 Page 5 
 
 
 a result a joint World Bank/EU team will tr avel to West Africa in December to 
identify interest and potential for pilots. 
EU actions (taken+planned) to provide financial and technical assistance on cotton-specific projects:  
 
(a) Individual EU Member States have supported the negotiating capacity of the cotton 
proponents and included new cotton-related projects in their bilateral development 
assistance programmes.  Heard some examples today, although this is not the full picture. 
(b) As part of the Mid Term Review of EC programmes, a total of €40 million is 
proposed to be allocated to cotton in the national indicative programmes of the four 
proponents.  These mid-term reviews shoul d be finalised soon.  The support would 
contribute to the preparation and implem entation of national cotton strategies. 
(c) The EU has tabled a proposal to the AC P for an international capacity building 
programme with international organisati ons on agricultural commodities, including 
€15m for cotton.  The programme comes as a complement to national support and 
covers various activities of the Cotton Ac tion Plan.  The targeted international 
organisations are World Bank, FAO, UNCTAD and the Common Fund for Commodities.  The programs allows for multi-donor cooperation. 
(d) We expect that some highly cotton depe ndent African countries could benefit from 
FLEX in 2005.  These countries include Benin,  Burkina Faso and Mali.  The EC is 
considering to mobilise additional sh ort term support from non-EC sources to 
mitigate the adverse effects of short falls in export earnings. 
EU actions to coordinate across bilateral programm es to enhance financial and technical assistance for 
cotton-sector specific projects:  
 
(a) Two different types of coordination are support within African countries: 
(i) Public-private:   to encourage the strengthening and/or establishment of 
public-private cooperation between the cotton stakeholders and the 
government in the cotton producing countries.  This was done for the preparation of the Paris Forum and is of crucial importance for refinement or preparation of national cotton strategies and policies. 
(ii) Donor coordination:  The EC stimulated donor coordination in several 
African countries.  Donors have identi fied the EU cotton contacts, which 
could be an officer from the Commission or one of the Member States.  EU donor coordination with other institutions , in particular the World Bank, is 
strengthened. 
(b) Five different types of interna tional coordination is supported: 
(i) An EU-Africa Cotton Steering Committee  has been set up to stimulate 
implementation of the Action Plan.  SC is composed of public and private representatives. 
(ii) Informal EU ‘cotton donor club’  consisting of the EC and some member 
States. WT/GC/83/Add.1 
Page 6  
 
 (iii) ‘Interagency coordination of International Organisations’  is foreseen that are 
going to implement the capacity building programme on commodities and cotton. 
(iv) ICAC .  The Commission explores ways for the European Community to 
become a member of the International Cotton Advisory Committee. 
(v) Cotton website and interactive platform.  Special efforts are made to share 
information and expertise between the ACP, EU and other organisations and 
countries by means of strengthening the website already in place since last July ( www.cotton-forum.org
).  This website has been updated to include 
documentation on the implementation of the action plan.  New interactive 
functions should be added in January 2005. 
26. Finally, we shall provide the Secretariat with a written response to these questions in terms of 
EU level initiatives as soon as we can.  To the exte nt possible, we shall include information on 
relevant EU Member States activities as well, but  it may not be possible to provide a fully 
comprehensive report within the short timetable of the current exercise. 
Annex 1:  Overview of main areas of the EU-Africa joint cotton Action Plan 
 
27. International trade.  Continuation of negotiations in DDA w ith the objective that an effective 
solution for cotton is found that is satisfactory to  all parties.  Access to existing trade related 
assistance programs.  Strengthen capacity building to defend and negotiate the cotton trade position in 
the WTO. 
28. National and regional strategies.  It is necessary that the cotto n stakeholders in African 
countries adopt a more strategic perspective to th e cotton sector in their country.  This strategic 
perspective should be build on existing initiatives, be in line with international realities and be 
embedded in the national development plans.  Knowledge, skills and resources of different 
stakeholders should be combined to achieve a common goal.  
29. Policies and institutions .  A clear division of responsibilities between business associations 
and government is essential.  It was agreed that  the government should create an environment that 
favours investments, strengthens producer associations  and encourages farmers’ participation in the 
processing industry.  
30. Technological innovations .  There is need to invest in improving the productive capacity of 
soil in combination with effective input management.  There is a need to substantially reduce the use 
of pesticides in cotton cultivation, in order to avoi d negative impact on the environment and the health 
of the rural population.  It was also agreed to stri ve for informed decision making with regard to the 
expansion of genetically engineered varie ties in the African smallholder economies.  
31. Risk management and finance.  Vulnerable cotton ginning an d traders can reduce their 
exposure to external price shocks by using modern risk management instruments in combination with 
realistic price formation policies that are based on the realities of the international cotton market.  The 
international financial sector is prepared to improve access to these instruments for the African 
countries.  Cotton-producing countries could gain from the capacity building on the issue by the World Bank.  Furthermore, the efficiency and transp arency of self-insurance systems at corporate and 
sector level will be enhanced. 
32. Chain integration.  Prospecting opportunities for chain integration.  Cotton instrument 
classing will be enhanced in Africa with a view  to better service the demand and increase the 
negotiating capacity.  The realistic opportunities in tex tiles and clothing need also to be explored, in  WT/GC/83/Add.1 
 Page 7 
 
 
 particular from a regional perspective.  More con certed work on organic/fair cotton production chains 
at international and in-country  levels is also highlighted. 
33. Coordination .  Coordination is identified at th ree levels:  in-country, regional and 
international levels.  At the in-country level it is important to strengthen business associations, public-
private consultations and local donor coordination.  Regional level cooperation is foreseen on certain 
issues, such as EPA regional integration, technological innovation, processing and producer 
coordination.  International coordi nation is necessary at the level of the African countries (Geneva, 
Brussels), cotton donors, international organisa tions and at the global level with ICAC. 
Annex 2:  EU Council conclusions on agricultural commodities, including cotton 
 34. At its meeting on 27 April 2004, the Genera l Affairs and External Relations Council 
(GAERC) of the EU, in its formation of Development Ministers, adopted COUNCIL CONCLUSIONS on Agricultural Commodity Chains , Dependence and Poverty and an EU-Africa 
Partnership in Support of Cotton Sector Development 
(a) The Council recognises  the crucial importance of agricultural commodities for 
poverty reduction in developing countries.  It  stresses the need for urgent measures to 
address the situation of commodity producer s who currently face major challenges, in 
particular in the most commodity dependent developing countries (CDDCs)  where 
implications extend to the macro level; 
(b) The Council recognises that addressing the issues of international agricultural 
commodity chains, dependence and poverty is complex and  requires a package of 
measures and a multidisciplinary approach , as well as collaborative and coordinated 
efforts by all stakeholders - including governments, producers, the private sector, non-governmental organisations, interna tional organisations, and bilateral and 
multilateral donors; 
(c) In this context it recalls Council conclusi ons of 17 November on the cotton crises in 
Africa and of 8 December 2003 on reviving th e Doha Development Agenda (DDA).  
It welcomes the proposal for an EU Acti on Plan on agricultural commodity chains, 
dependence and poverty, and the specific proposal for an EU-Africa Partnership in support of cotton sector development set out in the Commission Communications; 
(d) The Council endorses the objectives, orienta tions, policy priorities and measures of 
the proposed EU Action Plan;  and agrees th at the EU and its Member States should 
pursue these, including the issue of resources, in their bilateral and multilateral 
cooperation as well as in relevant internati onal fora, and where appropriate, in their 
respective bilateral dialogue with CDDCs.  In  this context, it is important to have a 
gender sensitive approach  and to take measures to ensure environmental 
sustainability.  It further invites the EC and Member States at the level of their 
relevant services to develop measures, ac tions and means to operationalise the EU 
Action Plan and invites the Commission to report on progress in the context of the 
Annual Report. 
(e) The Council considers that the first steps of implementing the EU Action Plan should 
include: 
(i) supporting commodity dependent developing countries in the design and 
implementation of commodity chain strategies, building on existing 
initiatives and in the context of nati onal development strategies and in 
particular Poverty Reduction Strategies (PRS);  WT/GC/83/Add.1 
Page 8  
 
 (ii) advancing efforts to develop regional markets, policies and services in 
support of commodity sectors, in the framework of support to regional integration through both development cooperation and trade negotiations.  
Advantage should in particular be take n of the opportunity presented by the 
negotiations on EU-ACP Economic Pa rtnership Agreements (EPAs);  
(iii) supporting the CDDCs in their effort toward s diversification, in particular by 
encouraging livelihood diversification for commodity producers, through increasing assistance to productive sectors  in rural areas;  such support, 
where appropriate, should be provided in the context of the PRS of the particular country in accordance with the principle of ownership, bearing in 
mind the important role that regional in tegration can play to facilitate the 
process of transformation; 
(iv) extending access to market-based commodity  risk instruments at the micro 
level, and piloting these tools for the macro level; 
(v) developing multi-donor cooperation on agricultural commodities with 
international organisations (WB, FAO, UNCTAD, CFC), with a view to 
enhance expertise and development of innovative tools to support national 
commodity strategies; 
(vi) in the framework of the DDA, ensuring th at due attention is paid to products 
of specific interest to CDDCs, including traditional commodity products and products of importance for diversificati on and taking into account the issues 
of major interest for CDDCs in all relevant aspects of the negotiations, as 
outlined in particular in the Council conclusions on Trade and Development 
adopted in November 2002
1;  the Council encourages all WTO Members to 
make special efforts in this regard; 
(vii) encouraging all developed countries to give duty and quota free access to all 
products from LDCs, as the EU has done under the Everything But Arms 
(EBA) initiative.  Major developing count ries should also be encouraged to 
open their markets for commodities; 
(viii) ensuring that the forthcoming reform of  the GSP system continues to provide 
generous and predictable access for C DDCs to the EU market, including 
through revision of the rules of origin requirements; 
(ix) ensuring that in the short term, resour ces such as Flex and budget support are 
provided to CDDCs to mitigate the adve rse impact on poverty of shortfalls in 
exports earnings; 
(x) developing coordinated efforts to encourage sustainable corporate practices 
and investments, in particular in CDDCs;  including the development of 
public private partnerships, and valorising instruments for private sector 
developments in non-traditional sectors, bearing in mind the important role that the fair trade movement and th e international discussions on codes of 
conduct can play with regard to sustainable development. 
                                                     
 
1http://ue.eu.int/newsroom/NewMain.asp?LAN G=1;  doc. 14184/02 (presse 351).  WT/GC/83/Add.1 
 Page 9 
 
 
 (f) The Council recognises the important role of  International Commodity Bodies as fora 
for co-operation between producer and cons umer countries, both at government and 
private sector level ;  in particular, the participation of private sector should be 
encouraged.  It invites the EC and Memb er States to undertake assessments, deepen 
the reflections and where appropriate make  proposals with a view to ensuring the 
efficiency of these bodies and of their contribution to market functioning, sustainable 
development and other common interests of  the sectors, and to commodity chain 
strategies in CDDCs. 
(g) The Council endorses the proposal for an EU-Africa partnership on cotton as an 
important application of the proposed EU Action Plan.  The Council urges the EC and 
Member States to address the issues raised, including the question of financial 
resources, and to undertake all necessary ac tions to implement it, while basing their 
activities on the principle of local ownership and effective coordination.  This implies: 
(i) obtaining fairer international trade conditions by: 
- supporting an effective and specific solution on cotton within the WTO 
agricultural negotiations.; 
- encouraging all developed and major de veloping countries to follow the EU 
in providing complete market acce ss to cotton and cotton based products 
from LDCs; 
- aiming within WTO at the elimination of all forms of export subsidies for 
cotton; 
- striving to secure a commitment from major cotton producing countries to 
undertake reforms with respect to trade distorting domestic support.  In this 
context, the Council welcomes the fact th at the EC has concluded the reform 
of its own cotton regime , which, while taking account of the interests of its 
own producers, will  also reduce its trade-distorting impacts and improve 
coherence with the EC's development policy.  The Council notes the intention 
of the Commission to establish a mechanism that will allow it  to monitor the 
impact of its subsidy schemes and refo rm measures on cotton production and 
trade; 
- supporting African countries through trad e related technical assistance and 
capacity building to defend and negotiate their case in the multilateral trade 
context. 
(ii) supporting cotton producing countries in Africa, and in complement to the 
measures recommended above for the EU Action Plan to: 
- intensify cooperation efforts to cons olidate competitiveness of the African 
cotton sector and rural growth of cotton producing areas; 
- strengthen policies and institutions, enc ourage private investments for value 
addition, favour technological innov ations and support international 
recognition of the African cotton qua lity, in line with national poverty 
reduction and development strategies; WT/GC/83/Add.1 
Page 10  
 
 - ensure that the potential of EPAs is fully exploited to support the 
development of the cotton economies, in particular through efforts in the area 
of trade facilitation and investment clauses; 
- support African countries’ access to ma rket-based mechanisms that mitigate 
commodity risks for cotton farmers. 
(h) The Council invites the Commission to consider  EC membership of the International 
Cotton Advisory Committee (ICAC), as one of the main fora for the sector. 
B. F
RANCE  
French Aid to the Cotton Sector in Africa  
 
35. France has long been a traditional and major partner of the cotton sector in Africa.  Over the 
past 25 years it has guaranteed financial aid amounting to €757 million for 17 African countries. 
36. Today, France intends to pursue its efforts in support of cotton production by fully 
contributing to the action plan of the "European – African cotton partnership", an idea launched by the 
President of the Republic during his trip to Ni ger and Mali in October 2003.  In April 2004, the 
EU Council adopted the action plan for primar y products and the European – African cotton 
partnership.  And in July 2004, France hosted the European – African Forum on Cotton to discuss this 
partnership. 
At the bilateral level, the support strategy adopted by French cooperation with respect to the "cotton" 
sector in Africa has aimed, and still aims, to help the recipient countries to meet the challenges facing 
their cotton production and exports.  
37. Indeed, in a global context in which cotton prices seem to be on a downward trend, the 
African cotton sector must improve its competitiveness. 
38. The objectives of French aid, particularly in Benin, Burkina Faso, Mali and Chad, have been 
and remain: 
• to assist the countries in restructuring their cotton sector; 
 
• to improve competitiveness at the production level. 
 39. This cooperation also forms part of a broader framework of actions aiming at sustainable 
development of cotton belts, fostering access by populations to basic services and addressing the 
problems posed by the management of rural space and natural resources. 
40. This cooperation effort is led by the French Development Agency (AFD), and by the French 
Agricultural Research Centre for Internationa l Development (CIRAD) in the scientific area. 
41. The French contribution to the consolidation of the cotton sector amounts to some €48 million 
for ongoing operations or those under preparation.  This aid represents a significant portion of French 
financial assistance to agriculture  in Africa, which today totals €128 million for programmes currently 
under way or under preparation.  WT/GC/83/Add.1 
 Page 11 
 
 
 The First Objective of French Support is to Cont ribute to the Efficient Structuring of the Sector  
 42. The structural reforms that France has en couraged and supporte d have involved the 
privatization of cotton companies in order to make  them accountable, to protect them from political 
interference, to attract private investment, and to create an integrated sector. 
43. The aims of these structural reform  programmes assisted by France were: 
(a) To develop a balanced partnership between the different actors in the sector 
(producers, cotton companies) by creating an inter-profession and a forum grouping together all of the actors.  French cooperation helps the producers in coming together to form regional and national organizations.  They are also given assistance in 
building up their capacity to analyse, negotiate, and submit proposals; 
(b) To improve and strengthen all of the factor s in the industry that contribute to its 
competitiveness, i.e.:  development research , advice to producers, provision of seed 
and inputs, credit, maintenance of tracks, etc. 
The second objective of this aid is to improve competitiveness at the production level
 
 
44. French aid has also sought to promote sustaina ble, efficient, and integrated agricultural 
practices based on efficiently managed family farms. 
45. These efforts have stressed: 
• Research to improve soil fertility, to intr oduce more productive cotton varieties, to 
combat insects, and to improve fibre quality.   This research effort is supported by the 
AFD and CIRAD; 
 
• agricultural advisory services and management advice for producers; 
 
• establishment of partnerships between produ cer organizations and the agro-industries; 
 
• introduction of technical improvements. 
 These cooperation activities have been implemen ted differently according to the degree of 
organization of the sector, particularly in Mali, Burkina Faso, Benin and Chad.  
 In Mali
: 
 46. French co-operation supports the decision to privatize the Compagnie Malienne de 
développement des Textiles :  the AFD is supporting the process of structuring the sector and has 
adopted a programme to help producers to take full advantage of this priva tization, and to improve 
farm competitiveness and soil fertility management.  Th is vast project will probably form part of an 
even broader programme co-financed by the World Bank. WT/GC/83/Add.1 
Page 12  
 
 In Burkina Faso
: 
 47. French co-operation has been  proceeding along two lines: 
• Progressive privatization of the traditional operator, SOFITEX:  creation of 
7,000 producers' organizations forming regiona l and national unions;  conclusion of inter-
professional agreements;  participation of the national producers' association in the capital 
of SOFITEX; 
 
• AFD support, starting more than six years ago, for the integration of producers and the 
development of a new assistance project ai med, as of 2005, at consolidating and 
spreading the management consultancy an d training facilities of the producers' 
organizations and strengthening research and development in the area of soil fertility. 
 
In Benin
: 
 48. French cooperation has focused on aid to farm ers in improving and diversifying their farms 
(family farm management advice, combating diseases,  diversification of pr oduction).  Starting in 
2002, the AFD introduced an action programme to foster reform of the cotton sector conducting 
studies to improve factors involved, providing inform ation and training for producers, building up the 
capacity of agricultural organizations, providing aid for cotton research). 
In Chad
: 
 49. A six-million Euro programme was launched in 1997  for a period of sixty months with a view 
to supporting rural structures in the Soudanian zone. 
At a European Level, France Currently Intends to Pursue its Aid Effort by Contributing Actively to 
the "European – African Partnership on Cotton" Action Plan  
50. The French contribution to this partnership  will consist chiefly of the projects that the AFD is 
currently preparing (three projects in Benin, Mali and Burkina Faso amounting to 15 to 
20 million Euros) and of the CIRAD cotton research teams (one million Euros per year). 
51. An added contribution of three million Euros for three years is currently being considered to 
help the African cotton producing countries to build up their negotiating capacity, improve fibre 
quality, and develop new areas of research. 
52. France supports the three main components of the European action programme: 
• Correction of the external market dest abilization factors by ensuring strong 
EU commitment in the negotiations under the Doha Agenda, to addressing the trade 
aspects of the cotton issue; 
 
• consolidating of the African production sector; 
 
• development of a framework to deal with the effects of the volatility of cotton prices on 
the international market. 
  WT/GC/83/Add.1 
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 C. JAPAN  
Statement made on 22 October 2004  
 53. We welcome the common understanding among the Member States that was reached in the 
decision of the General Council in July, in which we  set ourselves to deal w ith the cotton initiatives 
from two perspectives, namely, trade and development aspects. 
54. As was agreed in the July p ackage, the member states should work on the issue related to 
development through all available means, i.e ., not only multilaterally but also bilaterally. 
55. In June this year, shortly after the Cot onou Workshop held in Benin in March, Japan 
formulated and presented a package of assistance to Benin, which consists of grant-aid assistance for 
irrigation facilities and human capacity development.  This initiative was a concrete translation of 
Japanese Government's willingness to be closer to this issue and to participate in a collective 
reflection. 
56. In addition to the above-mentioned initiative, we  have continuously been making efforts to 
implement development assistance relate d to the cotton initiative as follows. 
57. Firstly, we have signed a grant-aid contract rega rding the construction of roads for arable land 
in the surrounding area of Guankuan Village, 130km north of Cotonou city, Benin.  In the rainy 
season, unpaved roads in this village are one of the obstacles for the delivery of seeds and fertilizer to 
the farmland.  This grant-aid assistance is a project  which can provide a concrete support to the cotton 
farms near Cotonou and we believe that this is one of the concrete  models for supporting one of the 
cotton-producing countries. 
58. Secondly, as a follow-up of communications between Mr. Nakagawa, Minister for Economy 
Trade and Industry of Japan and high level repre sentatives from the proponent countries of the cotton 
initiatives in Geneva, during the week of the General Council in July this year, Japan intensified the 
dialogues with those countries through diplomatic channels, with a view to identifying further needs of assistance to the four proponent countries. 
59. Last but not least, we are planning to host the Asia-Africa Trade and Investment Conference 
in November 1-2 this year in Tokyo.  The most  important event of this year under Japanese TICAD 
initiative. 
Statement made on 18 November 2004
 
60. As far as the concrete bilateral outcome is c oncerned, we have introduced our new project for 
Benin regarding the grant-aid assistance contract on the construction of roads for arable land at the 
last meeting. 
61. Although we do not have any new issues to add at this stage, Japan is intensifying the 
dialogues with proponent countries through diplomatic ch annels after the July decision with a view to 
articulating our will to provide assistance and to sh ape our bilateral cooperation closer to the cotton 
sector.  Japan is ready to move quickly, as explaine d in October once the concrete requests are made 
by the proponents. 
62. We are pleased to share all the information as soon as any new developments are made in 
terms of bilateral assistance.  WT/GC/83/Add.1 
Page 14  
 
 63. Taking this opportunity I would like to report briefly on the outcome of the TICAD Asia-
Africa Trade and Investment Conference held in T okyo, November 1-2, which I introduced at the last 
meeting. 
64. The conference was a first big meeting after the TICAD Ⅲ summit meeting held last year.  
Unlike last year’s meeting, there was a focused obj ective for the conference, namely promoting trade 
and investment through Asia-Africa cooperation. 
65. When we prepared the conference, we have an ticipated to hold a medium-size meeting with 
the participation of high level government offici als.  However, since the expectation for the 
conference was so high, there were after all more than 700 participants, including those of more than 
10 ministerial level.  It is also worthwhile to  mention that President Obasanjo from Nigeria and 
President Kibaki from Kenya attended the first session and made key note speeches. 
66. These facts illustrate how the Africans as well as Asians are interested in this meeting giving 
way to closer cooperation between the two regi ons and how they highly appreciate the TICAD 
process. 
67. Through inviting private sectors both from Asian and African region, we have succeeded in 
organizing interactive dialogue not only at the go vernment level but also between government and 
private sector.  At the meeting a comprehensive ne twork for facilitating trade and investment between 
Asia and Africa was also launched. 
68. Although the theme of this conference was not limited to the cotton sector, I believe this is 
one of the good examples of efforts which Japan is continuously making with regard to African 
development through promoting trade and investment. 
69. We are convinced that investment should be an important answer to the problem we are 
facing. 
D. U
NITED STATES OF AMERICA  
Statement made on 22 October 2004  
70. Mr. Deputy Director General, as we focused  on the concerns about cotton, both pre-and 
post-Cancun, we began at the WTO to develop tw o tracks for our work:  trade related issues and 
development issues.  While the trade issues continued to be pursued in Geneva, we participated in the 
WTO conference in Cotonou last March, the fi rst opportunity both to describe developmental 
programs already underway as well as to hear what additional elements were needed.  We have 
continued to follow-up with colleagues from other Members and other development partners and we 
have also pushed ahead with our own efforts, first in July via a Ministerial travel program in the 
States, an assessment team visit to Africa in September/October, and our  own Millennium Challenge 
efforts.  Let me offer additional details on these three efforts. 
Ministerial Visit to U.S.  
 
71. In July this year the Ministers from the four African countries who have been a part of the 
cotton initiative came to the U.S. to view all aspects of U.S. industry, from seed to planting to grading to apparel and the Ministers also met with Amba ssador Zoellick to discuss their concerns.  This 
enabled a good exchange on all aspects of cotton prior to our July framework work in Geneva.  WT/GC/83/Add.1 
 Page 15 
 
 
 USAID/USDA Initiatives  
 72. An assessment team lead by USAID and incl uding USDA, Tuskegee University, the National 
Cotton Council and Abt Associates, visited three of the cotton producing countries in West Africa, 
Benin, Mali and Chad, in response to concerns about competitiveness and productivity in the sector.  
In addition, Senegal was included in the visit becau se of its strong economic and political role in the 
region.  The assessment trip began on 25 Septem ber and ended on 15 Oc tober and included some 
11 members.  Burkina Faso was not visited during this trip because of logistical constraints. 
73. This was a further step in assessing the qualiti es and constraints of cotton production, 
transformation, utilization and commercialization in  these countries.  The assessment trip was very 
successful and the team was able to gather enough quantity and quality of information to develop a 
concise and accurate picture of cotton in West A frica to date.  A workshop is now scheduled for 
29 October in Washington, DC where the members of this team will gather to analyze this 
information and begin the process of generating re sults.  A report outlining the cotton industry in 
these countries, as well as possible points to visit duri ng the reciprocal trip in December and possible 
technical assistance interventions will be generated at the end of this process. 
74. A next step will be the high-leve l U.S. and private cotton sector tour of West Africa cotton in 
December 2004, which will also generate follow-up information on the cotton situation in this region 
to be integrated into the report genera ted by the recently completed assessment. 
75. In early 2005, USAID will begin the process of designing a technical assistance package 
based on recommendations of the team. 
76. It is premature at this point to make any comments as to the state of cotton production and 
consumption in West Africa or about possible technica l interventions in the future.  Suffice to say that 
greater detail and clarity will be available once the as sessment data is analyzed and a complete report 
is finalized. 
Millennium Challenge Account (MCA)
 
 
77. Benin, Mali and Senegal were selected by the Board to negotiate compacts for FY04 funds.  
Benin, Burkina Faso, Chad, Mali and Senegal are potential candidates for FY05 funding (selections to 
be made in early November). 
78. Representatives from Benin and Senegal attended the MCA briefing in Geneva last week, 
which introduced them to the MCA process and enc ouraged them to plug into the domestic efforts 
underway to develop a proposal for funding.  Mali ’s Ambassador was not at this briefing. 
79. Benin, Mali and Senegal have all shared so me concepts with the Millennium Challenge 
Corporation (MCC), but they have not yet provided  any formal proposals.  In its concept paper, 
Senegal focused on the creation of an industrial, commercial and tourism zone and the construction 
and maintenance of urban and inter-urban roads.  It  is too early to categorize the ideas from Benin and 
Mali, since they are still refining them.  All concepts  are still subject to change before they become 
formal proposals. 
80. The MCA is based on country ownership.  MCA programs will, therefore, reflect the 
priorities of MCA countries.  The MCC is open to an y proposal that would lead to growth and poverty 
reduction and has broad support within the country.  Thus, if a country decides that improving agricultural productivity is its priority and MCC ag rees that the plan looks like it would work, then 
MCC could support it.  MCC will not advocate any area, however, including cotton.  The decision on 
what is in an MCA proposal is up to the country. WT/GC/83/Add.1 
Page 16  
 
 Statement made on 18 November 2004
 
Development Aspects of Cotton  
 81. We had the opportunity to comment in some detail at the last consultation and, since our last 
meeting, we have continued the full mobiliza tion of our development agencies to address the 
obstacles faced by countries in this sector.  The Millennium Challenge Corporation, USAID, USDA, 
and the United States Trade and Development Agency are all working together to create a coherent 
long-term development program based on the needs expressed. 
82. As we develop this long-term program, we al so recognize the importance of more immediate 
activities.  The interagency group is carefully c onsidering things like the communiqué of the cotton 
proponent countries during the US visit in July to see how it may be supportive in the short term. 
83. We view our activities as part of a multilateral effort to address the development aspects of 
cotton.  We look forward to coordinating with the World Bank, the African Development Bank, and 
others. 
84. I would like to update you on the USG's most recent activities. 
85. First, the Millennium Challenge Corporation efforts: 
• Burkina Faso was selected about 10 days ago as a FY05 Threshold Country by 
Ambassador Zoellick and his fellow Board memb ers.  Benin, Mali and Senegal were re-
selected by the Board and are now eligible to negotiate compacts for FY04 and FY05 funds. 
 
• Burkina Faso will be invited to submit a proposal to improve performance on the 
following indicators so that it might become eligible for the full program in the near 
future:  Days to Start a Business, Trade Policy, Fiscal Policy, and Girls' Primary 
Education Completion.  Improvement in the first three areas should help on the development aspects of cotton. 
 
• As with the core MCA program, being selected  for the smaller Threshold Program does 
not guarantee a country will in fact receive assistance.  Countries will develop proposals 
and the best proposals will then be funded. 
 
• MCC CEO Paul Applegarth just left Benin ear lier this week.  His visit followed one by a 
technical team from 2-11 November.  The mission was very productive and helped the Beninese team further focus their concept.  The MCC team had good meetings with the 
President, with Minister Akplogan, and M CC National Coordinator, Simone Adovelande. 
 
• Again, country ownership remains key fo r MCC and the concept paper the Benin 
government has put forward reflects views with  a board consultative process.  The major 
components all revolve around increasing market  access for Benin's agricultural products 
and include the following:  agricultural exte nsion activities (including research, technical 
assistance/training to farmers, microcredit), a focus on norms and standards to access 
international markets, land titling, and a por t reform program to increase its efficiency. 
 
• Mr. Applegarth is in Mali today through Satu rday and he is hoping to get some ideas and 
guidance from the Malian government.  I understand that there does not seem to be anything new with regard to Mali's concept paper. 
  WT/GC/83/Add.1 
 Page 17 
 
 
 • The MCC is open to any proposal that would lead to growth and reduce poverty and 
which has broad support within the country.  Thus, if a country decides that improving agricultural productivity is its priority and MCC agrees that the plan looks like it would 
work, then MCC could support it.  MCC w ill not advocate any area, however, including 
cotton.  The decision on what is in an MCA proposal is up to the country. 
 
86. Next, the USAID/USDA efforts: 
• From 25 September to 15 October, an asse ssment team lead by USAID and including 
USDA, Tuskegee University, the National Co tton Council, and Abt Associates visited 
Benin, Chad, Mali and Senegal in respon se to concerns about competitiveness and 
productivity in the cotton sector.  The team vis ited approximately 10 cotton gins in Benin, 
Chad, Mali, including storage facilities and cotton classing units. 
 
• The assessment team examined all aspects of the cotton supply and demand chain, 
including production, agricultural technolog y and best practices, biotechnology or the 
feasibility of its use in countries where it is not yet available, transport and marketing infrastructure, processing and transformation, value-added activities, ginning, cooperatives and farmer associations, spi nning, weaving and garment manufacturing, 
policy and regulatory climates, and ong oing research and sector development. 
• USAID is now working on finishing the assessment report, which has developed 
approximately a few core areas of possible inte rventions that will help inform USAID's 
activities over the next three years.  These in clude elements associated with the supply-
demand chain such as upgrading infrastructure, improving technology generation and transfer, improving inputs, grading, classing, ginning, etc. 
 
- Some of the finding of the assessment include: 
- Farmers are in need of better extension services, "best practices" in production of 
cotton and better access to information on markets. 
- Infrastructure presents a major constraint to production, including roads and bridges 
as well as transport, handling and port facilities. 
- Ginning and other transformational operati ons are in need of reformation. 
- Cotton classing is a major constraint to international marketing of cotton from the 
region.  Estimates are that improved classi ng of cotton could potentially add as much 
as US$ 0.07 to US$ 0.10 per pound to the sale of cotton in world markets. 
- The design of USAID's potential technical assistance, based on country input, will 
start in the next few weeks. 
- We are working out the exact dates on a hi gh-level USG and private sector cotton tour 
of West Africa, which will also generate follow-up information to be integrated into 
the report.  We will be in touch regarding the exact dates. 
 WT/GC/83/Add.1 
Page 18  
 
 IV. MULTILATERAL AGENCIES 
A. A
FRICAN DEVELOPMENT BANK 
Multinational Competitiveness of the African Cotton Sub-Sector  
 
Project Background  
 
87. Cotton plays an important role in the economy and development of rural areas in West and 
Central Africa.  In the last thirty years, re gional production has multiplied by five, up from about 
445,000 tonnes in the early 1970s to 2,373,000 tonnes in 2002, improving thus the incomes of nearly 2 million farmers.  However, it must be pointed ou t the deficit of Governments subsidizing public 
enterprises engaged in cotton ginning and marketing h as increased, in the wake of the drop in world 
prices.  In 2002, West and Central Africa produ ced 991,000 tonnes of cotton lint, representing about 
5% of the world production.  The combined expor ts of countries in the region represented 15% of 
world cotton trade in 2002, making the region the worl d’s third cotton exporter after the United States 
and Uzbekistan.  West and Central Africa export 95%  of their lint production whereas exports of the 
large producers average only 30%. 
88. Since 1994, the African cotton sub-sectors have been boosted by the lucrative international 
prices and the devaluation of the CFA Franc.  Since 1999, the sharp drop in world prices has meant declining returns.  Nonetheless, the African produci ng countries have made considerable effort in 
recent years to improve the competitiveness of the sub-sector.  In particular they:  (i) provided inputs on credit at satisfactory repayment rates;  (ii) maintained the agricultural yield despite weather 
hazards;  (iii) supported the emergence and took more into account the agricultural professional 
organisations;  (iv) built the capacity of and in some countries privatised the ginning services;  and (v) improved the quality of the lint.  Through these actions the African cotton sub-sector became one 
of the most competitive in the international market with production costs at around 50 cents (US$) per 
pound of lint. 
89. In Europe, the mechanisms of the Common Agricultural Policy (CAP) guarantee producers 
(Greeks and Spanish in particular) a stabilised price at € 1.6 per kilogram of seed cotton regardless of 
the world market prices, whereas prices to pr oducers in Benin, Burkina and Mali cannot exceed 
€ 0.30 per kilogram or the sub-sector’s deficit woul d worsen.  In the United States, the world’s lead 
cotton producer, the new Farm Bill, approved on 2 May 2002, provides for an increase of almost 
60% in the aid to American farmers, that it to say 173 billion dollars over 10 years.  In 2002, the 
American mechanism thus assured the farmer, a purchase price of 72 cents per pound of cotton 
whereas the price of the product on the New York Stock Exchange was 35 cents. 
90. In the current unfavourable context, without a ppropriate and immediate actions in favour of 
the African cotton sub-sector, producers of West a nd Central Africa may find themselves crowded out 
of the world market leaving the room to those w ho are less competitive but are highly subsidised.  
Concurrently, the incomes generated by cotton of nearly two million producers will drop and affect 
the poverty reduction efforts in the rural areas of West  and Central Africa.  In light of the foregoing, 
the Ministers of Agriculture of West and Central Africa held a meeting on 25 and 26 June 2002, to 
plan measures for enhancing the competitiveness of th eir cotton sub-sector.  One of the measures is to 
formulate and implement programmes concerning co tton that are of common interest, within the 
framework of NEPAD.  The programme is consiste nt with the economic deve lopment strategy of the 
governments of cotton producing countries of West  and Central Africa and their poverty reduction 
strategy papers (PRSP).  It is also consistent w ith the vision, strategic plan, agricultural and rural 
development policy as well as the Bank’s 2002-2004 CSPs for these countries.  This programme has 
  WT/GC/83/Add.1 
 Page 19 
 
 
 been conceived against the background of the World Trade Organisation (WTO) African Regional 
Workshop on Cotton for African countries, held in  Cotonou, Benin Republic in March 2004 and in 
which, the Bank participated.  The project implem entation will also take account of the development 
aspects of the cotton related decisions by WT O members in the July Framework Decision. 
Project Rationale  
 
91. Unskilled labour is one major constraint to the competitiveness of African products and the 
promotion of private investment in Sub-Saharan Africa.  Despite the numerous initiatives at economic 
and social development in Sub-Saharan Africa, about three quarters of the active population are 
engaged in subsistence agriculture with incomes decr easing from year to year.  More than 60% of the 
active population are under-occupied or unemployed.  The economic growth rate is still lower than 
that of Asia and Latin America.  Sub-Saharan Africa’s share of the market is shrinking yearly, down from 4% to 1.5% in 2000.  In the last two decades  the volume of world level trade has tripled while 
that of Africa has been less than 10%.  In the cl othing industry the volume of trade was estimated at 
199 billion dollars in 2000.  Africa’s share in this lu crative business was less than 10%.  How to profit 
from this important clothing business on the one hand , and how to attract more private investments on 
the other are major development challenges that African leaders must now take up. 
92. Against that backdrop, AGOA (The African Grow th and Opportunity Act) came into being.  
AGOA is the most important trade legislation in  the history of United States-Africa economic 
relations.  To attain AGOA’s objectives of poverty reduction, job creation and better incomes, Sub-
Saharan Africa needs skilled labour, capital, and sy stems for promoting industrial production.  Few 
African countries today benefit from AGOA desp ite the significant potential for producing raw 
materials especially for the clothing industry.  Th e European Union through the Lome Convention as 
well as the United States have lifted all restricti ons on the imports of articles of clothing from Sub-
Saharan African.  American industrialists and consum ers of the clothing sector are in search of new 
duty free sources of supply.  However, these investors demand skilled labour, a significant production 
capacity and strict quality control. 
Project Objective  
 
93. The programme’s sector goal is to contribute to poverty reduction in the Bank’s regional 
cotton producing member countries.  The specific objective of the programme is to secure and 
improve sustainably the incomes of the cotton sub-sect or players (producers, millers, traders, etc.) in 
the Bank’s regional cotton producing member countries. 
Project Description  
 
94. The following three main results  are expected of the Programme’s implementation:  (i) better 
cotton production and productivity in the countries of West and Central Africa;  (ii) the capacity for 
weaving, manufacturing, controlling quality, logist ics management, marketing and entrepreneurship 
in the clothing industry built at local level in count ries of West and Central Africa;  and (iii) more 
private investments into countries of West and Central Africa.  The programme comprises the following three components:  (i) capacity building in the sub-sector;  (ii) improvement of production and productivity;  and (iii) industr ial and commercial development. 
(a) Capacity-Building 
95. Through the component to build the capacity of the cotton sub-sector, a model regional 
clothes making and training centre that will attrac t foreign investors and circulate good clothes 
making and management principles and practices thr oughout the region will be established.  The local 
capacity for processing, weaving, clothes-making, control quality, logistics management, marketing 
and entrepreneurship in the clothing industry w ill be built through training, guidance, technical WT/GC/83/Add.1 
Page 20  
 
 assistance for the production of quality clothes desi gned for the world market.  Consequently, the 
programme will earmark a support fund for rural ar ea promotion which will be used to finance 
sensitisation, mobilisation, organisation and training of  all sub-sector players with a view to preparing 
them for technical, financial, industrial and commerc ial services.  This fund will also finance local 
investments and initiatives that contribute to improving the production, productivity and 
competitiveness of the cotton sub-sector.  Access to th e fund will be tied to:  (i) a justified request;  
and (ii) beneficiary participation of not less than 15% including at least 5% cash in the financing of 
the proposed investment. 
(b) Improvement of Production 
96. The two main activities of the component "Imp rovement of production and productivity" are 
systems research, outreach, and supply of selected  cotton seeds.  The programme will finance the 
training, equipment and running of the research te ams working on cotton-based systems in countries 
of West and Central Africa.  The management of natural resources, especially the protection, 
restoration and improvement of soil fertility, mixe d farming, agro-forestry, reforestation, land 
management, crop diversification and improvement of the sub-sector’s competitiveness (lint quality, 
yields, etc.), selection of the varieties that improve field yields and technical characteristics especially 
gin outturn, etc. will be the priority research topics for operating systems approach.  With the 
programme’s support, a programme for self-sufficien cy in selected cotton seeds will be formulated 
and implemented.  As a basic principle, it will c onsist in producing sufficient quantities of pre-basic 
and basic seeds through a mechanism of research  and seed selection through a network of seed 
farmers.  Processing, conditioning and marketing of selected seeds will be entrusted to private 
operators (traders, NGOs, farmer or ganisations, etc.).  Other activities under this component are:  
(i) efficient control by the Government services of the quality of agricultural inputs and possible risks 
on the collective natural capital (soil, water, forests,  etc.);  (ii) efforts to reduce production costs, 
especially of inputs.  Cost reduction implies a bett er utilisation rate of the ginning and modernisation 
capacity of the industrial units, which would mean  a drop in committed cost s on the cost price and 
return for lint yields;  (iii) reduction in the bank interest rate and transport costs;  and 
(iv) modernisation of the agricultural farms th rough increased mechanisation and motorisation. 
(c) Industrial and Commercial Development 
97. Through the provisions of AGOA and the Lome  Conventions, the programme will facilitate 
access to the world market of clothes and various pr oducts manufactured in West and Central Africa.  
At the same time, the programme will facilitate priv ate investment in West and Central Africa, and 
trade between the region and the rest of the world.  The results expected of the implementation of the 
programme’s first six-year phase are:  (i) 100 priv ate companies with an average of 1,000 qualified 
employees per company established in the textiles sector;  (ii) 100,000 new direct jobs and 500,000 new indirect jobs created in the textiles sect or of West and Central Africa;  (iii) a total 
income of about two billion dollars  generated by the sector;  and (iv) a larger share of countries in 
West and Central Africa in world trade .  Indus trial and commercial deve lopment will concern the 
processing of seed cotton into lint, weaving, manufac ture, quality control, l ogistics management and 
marketing of clothes. 
(d) Programme Implementation 
98. The programme’s executing agency will be the C ouncil of Agriculture Ministers of West and 
Central Africa (CMA/AOC), UEMOA or any other competent regional development institution.  An 
independent programme manageme nt unit to be created with in the CMA/AOC and national 
coordination units in the beneficiary countries will coordinate all the program me’s activities under the  
  WT/GC/83/Add.1 
 Page 21 
 
 
 aegis of the supervisory ministries, CMA/AOC and the regional economic communities (WAEMU 
and CEMAC).  The main partners identified at th is stage for the programme’s implementation are 
UATALCO (The US-Africa Trade and Aid Link Corporation), N.C. State (North Carolina State University), USA and MFI (Manitoba Fash ion Institute Training Centre), Canada. 
99. In five years of activity, UATALCO has devel oped unique skills in technology transfer and 
trade between the United States and Africa with focu s on light and industrial products.  N.C. State has 
a department specialised in textile, fibre and clothing.   It is currently taking part in capacity building 
in the field of clothing in Hong Kong and Mexico.  MFI is specialised in capacity building in manufacture, quality control, logistics management, marketing and entrepreneurship in the clothing 
industry. 
100. The agricultural research institu tes, the directorates of agri culture, the cotton boards and 
companies of West and Central African States w ill implement activities for capacity building and 
improving cotton sub-sector produc tion and productivity in colla boration with NGOs.  Private 
operators will implement the indus trial and commercial development component.  For an efficient 
management of the operation, the programme will build the capacity of the executing agencies by 
providing them with technical assistants. 
(e) Cost Estimate 
101. The total cost of the programme’s first phase is estimated at UA 500 million.  The public 
investment requirements are estim ated at UA 60 million and private investments at UA 440 million.  
The cost estimate by component is:  (i) capacity building:  UA 40 million;  (ii) improvement of 
production and productivity:  UA 20 million;  and (iii) industrial and commercial development 
UA 440 million. 
Project Benefits  
 
102. A complete development of cotton through pro cessing at local level thanks to the programme 
identified, would have the twofold advantage of maximising the local value added, with a positive 
impact on the industrial growth of countries of West  and Central Africa, fiscal revenue, trade balance 
and the incomes of the sub-sector players.  The programme will make it possible to better protect 
cotton from West and Central Africa from the fluctuations  of the price of lint.  In addition, it will help 
advance economic integration at regi onal or even global level.  Integr ation in West and Central Africa 
could involve areas such as research and training,  energy, seed production, fertilisers and pesticides, 
spinning and product processing, information systems,  development research and concerted action on 
the world market. 
Technical Assistance Requirements  
 
103. To be determined. 
Issues and Proposed Actions  
 
104. The programme’s total cost is estimated at UA 500 million.  The ADF resources being 
limited, a co-financing of the programme is to be e nvisaged.  To that end, a donor meeting (sort of 
consultative group), will be necessary to mobilise more  resources.  Moreover, within the framework 
of the programme’s preparation it will be necessary to conduct the following studies:  (i) trend of the 
sub-sector’s value added, in order to better determin e its macroeconomic contribution;  (ii) industrial 
development in particular, an analysis of the ma in activities as well as the prospects for partnership  
 WT/GC/83/Add.1 
Page 22  
 
 with private investors and promoters;  (iii) an in-d epth review of the market with a view to assessing 
indicators for the current trade situation between  West and Central Africa and the main export 
markets targeted, that is to say, North America an d Europe;  and (iv) privatisation of agricultural 
services (inputs, seeds, transport of inputs and products, etc.). 
Sector Assumptions/Risks  
 
105. The programme’s success is conditioned by the implementation of all its components.  The 
following assumptions can be mentioned:  (i) co ntinued peace, justice and political stability in the 
beneficiary states;  (ii) further economic reforms by the beneficiary States;  (iii) better basic services 
(education, health and communications in terms of transport and information) in the rural areas;  
(iv) decentralisation with delegation of developmen t project ownership at local level;  (v) sufficient 
and evenly distributed rainfall;  and (vi) timely av ailability of the programme ’s financial resources. 
B. DAC/OECD 
Background  
 
Introduction  
106. This Briefing, to be held on 28 January 2005, is organized in response to the WTO 
Secretariat’s request for the OECD/DAC’s suppor t in the follow-up process to the WTO African 
Regional Workshop on Cotton held in  Cotonou on 23-24 March 2004. 
107. DAC members agreed that there were two av enues through which they could support the 
broader international effort to treat the development dimensions of African cotton: 
108. First, by expanding and deepening the inform ation on cotton-related assistance in the joint 
WTO/OECD Trade Capacity Building Database (T CBDB).  This would require close cooperation 
with the bilateral and multilateral donors involved with following through and tracking progress on 
the Cotonou Workshop outcomes.2 
109. Second, by holding a more comprehensive brie fing for DAC Members with the participation 
of the relevant development agencies and key Afri can actors on international efforts to address the 
development dimensions of the African cotton issue.3 
110. The DAC Briefing is also in lin e with article 1b of the Decision adopted by the General 
Council on 1 August 2004 on the Doha Work Progra mme (WT/L/579, referred to below as the July 
Framework Decision), which stipulates that "Member s should work on related issues of development 
multilaterally with the international financial institu tions, continue their bilateral programmes, and all 
developed countries are urged to participate.  In th is regard, the General Council instructs the Director 
General to consult with the relevant interna tional organizations, including the Bretton Woods 
Institutions, the Food and Agriculture Organization and the International Trade Centre to direct 
effectively existing programmes and any additional resources towards development of the economies 
where cotton has vital importance." 
                                                      
2The DAC Secretariat suggests that this proposal shou ld be evaluated in the light of information needs 
revealed at this meeting. It would then need to be discussed with the TCBDB Working Group. 
3DAC Chair’s letter to WTO Deputy Director-Gener al, Dr. Rana, WTO, dated 7/07/04 (RM(04)064).  WT/GC/83/Add.1 
 Page 23 
 
 
 Purpose  
111. Against this backdrop, the DAC Briefing aims to bring together key stakeholders from 
headquarters and field offices of donor and multilatera l agencies, international financial institutions 
(IFIs), regional organizations, as well as the WTO representative of African countries involved in 
cotton production and trade.  The main objectives are: 
• In light of the importance of cotton production and trade for the development of some 
African countries, to examine  whether the cotton sub-sector is appropriately reflected 
in developing countries’ development po licies and poverty reduction strategies; 
 
• In the light of the July Framework Decision, to share  information  on emerging 
approaches to development assistance progra mmes and examine the extent to which 
the latter are incorporated in agen cy Country Assistance Programmes; 
 
• In order to increase aid effectiveness, to discuss  how to apply lessons of alignment 
and harmonization to the design and delivery of assistance programmes for the cotton and other related sectors. 
The briefing will be structured as follows:
 
• Session I  will set the scene by providing (1) an update on the status of the WTO 
agricultural negotiations;  (2) an overview of  global market trends in cotton production 
and trade;  and (3) a reflection of the possibl e impact of changes in the external trade 
environment on African cotton producers and exporters. 
 
• Session II  will then examine (1) the economic and social importance of cotton production 
and trade for key African countries and their strategies and reform approaches in the cotton and related sectors;  and (2) assess how these are reflected in country-owned 
development policies and poverty reduction strategies. 
 
• Session III  will focus on recent evolutions in the design of assistance programmes for 
promoting the sustainable development of the cotton sector in Africa and assess how to apply lessons of alignment a nd harmonization to that area of development assistance.  
 
Participants to be invited
 
• DAC Members; 
• Representatives from the Sahel and West Africa Club (SWAC) Secretariat , the Trade and 
Agriculture Directorates and the Development Centre of the OECD; 
• World Bank, IMF, African Development Bank (AfDB);  FAO and ITC staff (including those 
that are involved in the Integrated Framework and JITAP); 
• Representatives of regional organisations, e.g. ECOWAS;  WAEMU;  UNECA;  African 
Union, NEPAD Secretariat; 
• Representatives of the four West Africa n cotton producing countries and Senegal; 
• Representatives of African producer asso ciations and the private sector; 
• WTO Secretariat;  
• Chairman of the WTO Agricultural Negotiations Group (Tim Groser). WT/GC/83/Add.1 
Page 24  
 
 DRAFT ANNOTATED AGENDA 
 
Presentations by speakers will be limited to max. 15 minutes, in order to leave time for discussion 
 
WELCOME SESSION – 28 January 2005 
9.15 – 9.30  
Welcome by WTO Deputy DG Dr. Rana 
SESSION I  – CHALLENGES AND OPPORTUNITIES FOR AFRICAN COTTON PRODUCERS AND TRADERS 
IN LIGHT OF THE WTO NEGOTIATIONS  
9.30 – 10.30  
This session will set the scene by providing (1) an update on the status of the WTO agricultural negotiations;  (2) an overview of global market trends in cotton production and 
trade;  and (3) a reflection of the possible impact of changes in the external trade 
environment on African cotton producers and exporters. 
 Chair:  Jean-Marie Metzger, Trade Directorate, OECD - TBC 
 Lead speaker: Tim Groser, Chairman of the WTO Agriculture Committee 
Meeting in Special Session (WTO Agriculture Negotiating Group) on (1) 
W o r l dB a n ko n( 2a n d3 ) -TBC
10.30 – 11.00  Discussion  
SESSION II  – COTTON :  HOW IMPORTANT IS IT AND HOW IS IT REFLECTED IN NATIONAL 
DEVELOPMENT / POVERTY REDUCTION STRATEGIES ?  
 
11.00 - 11.45  
This session will aim to (1) build a bette r understanding of the economic and social 
importance of cotton production and trade for key African countries, regional development 
and intra-regional trade;  (2) examine nati onal and regional cotton sector development and 
policy reform programmes;  and (3) assess how these are reflected in country-owned 
development policies and poverty reduction strategies. 
 Chair:  Stefan Tangermann, Agriculture Directorate, OECD - TBC  
 Lead speakers: Cotton producer associatio n and Karim Hussein, SWAC, OECD 
on (1) 
  African Development Bank on (2)  - TBC   
  Leendert Solleveld, World Bank on (3) - TBC 
11.45 - 12.30 Discussion  
12.30 – 14.00 Lunch Break  
 
  WT/GC/83/Add.1 
 Page 25 
 
 
  
SESSION III  – DEVELOPMENT ASSISTANCE FOR THE AFRICAN COTTON SUB -SECTOR :  MAXIMIZING 
AID EFFECTIVENESS  
14.00 – 15.00  
This session will provide the opportunity to (1) share information on recent evolutions in the design of assistance programmes for prom oting the sustainable development of the 
cotton sector in Africa and examine in what  measure such programmes are included in 
agencies’ Country Assistance Programmes;  a nd (2) consider how to apply lessons of 
alignment and harmonization. 
 Chair:  Richard Manning, DAC Chair, OECD   
 Lead speakers: Chiedu Osakwe, WTO Secretariat- status update on (1) 
  USAID and EC on (1)- progress since the Cotonou Workshop   Richard Carey, OECD on (2) 
15.00-15.45 Discussion 
15.45 -16.15 Coffee Break 
16.15 – 17.30 Discussion on ways forward 
17.30 – 18.00 Conclusions  
 WT/GC/83/Add.1 
Page 26  
 
 C. FAO 
Statement made on 22 October 2004
 
112. The FAO would like to report on two issues: 
• first, on the results of an FAO consultation on the likely impacts of subsidies in OECD 
countries on WCA countries, and 
 
• second on some project ideas on what FAO could do to address specific developmental 
issues of cotton dependent WCA countries. 
 
(a) Impact of Cotton Subsidies 
113. You will recall that when the cotton initiative w as launched last year, there was considerable 
controversy on the size of the impact of OECD cotton subsidies.  The range of likely impacts was 
very wide and FAO considered appropriate to review  the results of different studies, to examine the 
assumptions behind the numbers and, specifically, what  factors were responsible for the substantial 
differences between the different estimates. 
114. This activity culminated in an informal cons ultation of experts on 31 May - 1 June 2004 in 
Rome.  FAO brought together analysts that had done substantive work on the subject.  The 
consultation discussed the modelling approaches, the parameters assumed and the base data used in 
the different exercises.  The idea was to understa nd better the shortcomings  of different modelling 
exercises and the nature of the differences between them. 
115. The general conclusions that emerged from th e FAO informal consultation are as follows: 
What are the estimated impacts?  
 
116. First, all the studies reviewed in the FAO c onsultation unambiguously demonstrate that the 
removal of subsidies in OECD countries woul d reduce cotton production and exports from these 
countries. 
117. Second, the removal of subsidies would have, as expected, a positive effect on world prices.  
However, there is significant divergence in the ma gnitude of this increase, with studies estimating 
increases between 2% and 35%.  Will revert to some explanations of differences shortly. 
118. Third, who gains and by how much from this world price increase would depend on the 
supply response in different countries.  However, ir respective of the differences in the magnitude of 
the gains of WCA countries, all models estimate positive effects on their export earnings, totalling 
between US$ 26 million to US$ 504 million.  
119. Fourth, some of the analysis also attempted to assess the impact of cotton subsidies on 
poverty.  For example, one study estimated a 22% increase in cotton-producing households in Benin falling below the poverty line.  In Zimbabwe, real incomes of cotton producers were estimated to fall 
by between 13 and 31%, depending on the household characteristics.  WT/GC/83/Add.1 
 Page 27 
 
 
 What are the reasons for the di fferences in estimated impacts?  
 120. First, the fundamental parameter in any mode lling exercise is the choice made on the supply 
and demand elasticities.  In other words, how res ponsive to price increases is cotton production in 
different countries and, also, how does demand in importing countries respond to such price 
increases? 
121. On the demand side, most models assumed rath er inelastic demand, which would result in 
higher world market increases than otherwise.  Whether demand is elastic or inelastic would also depend on competition from synthetics, and the extent to which cotton price increases would be moderated by relative price effects of competing products such as polyester and other synthetic 
fabrics. 
122. Most models also assumed low supply elasticiti es.  However, as regards supply response in 
developing countries, it should be noted that these countries have been increasing their production and 
their share of world exports in spite of suppressed world prices.  This suggests that there is the 
potential for a significant supply response in devel oping countries, should prices rise.  Thus these 
countries would benefit from both a higher price as well as a higher volume exported. 
123. A second important factor which explains some  of the differences be tween models is how 
decoupled payments are assumed to  effect production.  Most studies assume that a subsidy reduction 
would translate directly into a reduction in the pri ce that the producer receives, irrespective of other 
existing support mechanisms.  To the extent  that producers receive support through other 
mechanisms, such as the reallocation of support th rough various forms of decoupled measures, then 
the increase in world cotton price is overestimated. 
124. A third important factor is whether reduction in  cotton subsidies would be in isolation from 
reform in other agricultural commodities or as part  of a wider reform.  Most studies assumed that 
support to alternative crops would remain unchanged.  To the extent that the reduction in cotton 
subsidies would be associated with reductions in subsidies in other crops, then the impact on the 
cotton sector would be lower than otherwise. 
125. A fourth factor is whether China is include d or excluded from the analysis.  China accounts 
for one third of world output and consumption and th e effects of China in or out could be significant. 
126. Finally, different models have not used the sa me data sources in their analysis, nor the same 
base period,
 and this also contributes to the differe nces in the results derived from them. 
127. Overall however, despite the substantial diffe rences between different models, the FAO 
consultation came to the conclusion that cotton su bsidies have an important impact on the global 
pattern of cotton production, world market prices an d cotton trade.  All of the studies reviewed point 
to a positive outcome for cotton producing WCA count ries as a result of the removal of subsidies in 
OECD countries. 
(b) Some FAO Project Ideas for a Co mpetitive Cotton Industry in WCA 
128. Following the launching of the cotton initiative last year and the possible role of organizations 
like FAO in the developmental aspects of the cott on sector in the WCA countries, FAO formulated a 
set of Project Ideas  reflecting what FAO could do, based on its technical expertise and comparative 
advantage within the specia lised agencies of the UN. WT/GC/83/Add.1 
Page 28  
 
 129. The main thrust of these Project Ideas  is to increase the prof itability, competitiveness and 
sustainability – economic and enviro nmental – of the cotton industry in WCA countries.  For that it is 
essential to develop appropriate sectoral policies and st rategies to cope with the international market 
dynamics and requirements, while also helping the region develop more cost-effective and sustainable 
production systems and improve efficiency in product processing, handling and marketing. 
130. I will mention briefly three of the project ideas elaborated by FAO. 
131. The first is on sectoral and trade policies. 
132. This aims at reinforcing the capacity for de veloping and implementing policies and strategies 
to ensure prosperity of the cotton industry in the cotton producing countries.  It could comprise, inter alia, the following elements: 
• Regional and country-based policy and stra tegy studies on critical factors affecting 
viability of the cotton industry. 
 
• Technical support and training in order to st rengthen institutional and human capacity for 
putting into action the identified policies and strategies. 
 
• Training workshops to focus on concrete measu res - such as sectoral and infrastructural 
investments and policy reforms - for increasi ng the competitiveness of African cotton and 
textile exports in world markets. 
 133. The second project idea relates to supply chain performance. 
134. It aims at addressing major performance issues in the cotton supply chain, including, inter 
alia, the following: 
• Ways of increasing the profita bility of cotton production by  identifying and promoting 
options for increasing productivity and reduc ing production costs, as well as flexible 
management strategies for farmers to re spond to changes in world markets. 
 
• Ways of improving the performance of the cotton marketing system, focusing on 
marketing costs and efficiency, risk management, access to inputs, etc. 
 
• Ways of increasing the competitiveness of tex tiles and clothing industries, because it is 
essential for the cotton industry to move into  value-added textiles production and exports 
to counter price declines in raw materials. 
 135. The third project idea relates to sustainable integrated production practices. 
136. This aims at improving the production effici ency of smallholder cotton/cereal producers 
through Integrated Production and Pest Management  (IPPM) and includes elements such as:  crop 
rotations and crop residue management, plant nutrie nt use in synchrony with crop rotations, etc. 
137. A major input here could be the introduction and application of a Good Agricultural Practices 
approach that addresses the economic, social and envi ronmental dimensions of sustainability within a 
multi-stakeholder framework.  Integrated Productio n and Pest Management (IPPM) Farmers’ Field 
Schools (FFS) could be central for building farm er capacities to use good agricultural practices.  WT/GC/83/Add.1 
 Page 29 
 
 
 138. These are some project ideas that reflect FAO’s technical expertise and comparative 
advantage.  However, the implementation of th ese project ideas would require a multi-disciplinary 
approach and cooperation between technical expert s from FAO and other international organizations, 
research institutes, local governments and institu tions, and the cotton industry.  For example, 
appropriate technical support for the cotton-related industries could be ensured through collaboration 
with the agro-industries branch of UNIDO, wh ich is already active in these countries. 
139. More broadly, these project ideas could be seen w ithin the context of a wider partnership for 
development assistance to support the Cotton Initiative, such as the EU-Africa Cotton Forum 
convened in July this year, which formulated an Action Plan with specific activities, timetables and 
the involvement of different deve lopment agencies and institutions. 
Statement made on 18 November 2004  
FAO Development Assistance Activities on Cotto n in African Cotton Producing Countries  
 140. Given the significant importance of cotton in rural employment, poverty reduction, food 
security and national economic growth in African cotton producing countries, FAO, under its 
mandate, has played an active role in assisting th e development of the cotton sector in the major 
cotton producing countries in Africa such as Benin,  Burkina Faso, Chad and Mali over the past few 
years.  FAO activities related to cotton developm ent in African countries have had two important 
features:  (1) they have covered both market de velopment and technological development, and (2) 
while not focussed strictly on cotton they have been  of significance to cotton producers because either 
the cotton sector was included in the overall agricu ltural development project or the cotton sector 
benefited indirectly from the general rural development aspects of the project. 
141. With regard to market development assistan ce, FAO has organized various workshops and 
seminars in Africa to assist African countries to implement the Agreement of Agriculture (AOA) and 
play an active role in the WTO negotiations.  FAO has undertaken a series of studies which were 
among the first to advocate the significant contributions of cotton production to rural employment and 
food security in African countries, examined issues related to improving cotton market efficiency and 
analysed how African cotton producing countries would benefit from the reduction in domestic supports to the cotton sector in developed countri es.  Recently, FAO has organized an expert 
consultation on the effects of domestic farm subsidie s to the cotton sector on the world market and the 
African cotton producing countries.  These activitie s along with FAO regular market analysis and 
information dissemination have assisted governme nts’ cotton policy formulation and industry’s 
development decisions. 
142. FAO has implemented numerous agricultural and rural development projects in African 
countries, which should benefit cotton farmers dir ectly and indirectly.  Concerning technological 
assistance specifically to cotton, FAO has been implementing an Integrated Production and Pest 
Management (IPPM) project in two of the four major West Africa cotton producing countries 
(Burkina Faso and Mali) as well as  Senegal.  This project is bein g funded by the Dutch Government 
and the first phase, which started in 2001, will c onclude in December 2004.  A second phase has been 
accepted, in principle, by the government and do nor, and is currently under design.  This second 
phase will expand to include Benin and Cape Verde.  The Phase I project budget is about 
US$ 2.9 million.  Phase II will be around US$ 4 million. 
143. FAO is also executing a project "Reducing Re liance on Agricultural Pesticide Use in the 
Senegal and Niger River Basins through Integr ated Production and Pest Management, and a 
Community-based Pollution Prevention System".  The project is co-financed by the Global 
Environment Facility (GEF-UNEP) and will be impl emented in, Guinea, Senegal, Mauritania Mali, 
Niger and Benin.  The overall objective of this project is to initiate high-quality monitoring of 
pesticide residue levels in the Senegal and Nige r River Basins, and through a Farmer Field School WT/GC/83/Add.1 
Page 30  
 
 approach, to drastically reduce the use of chemic al inputs in crop production (including cotton), while 
positively impacting production, profit and human health.  The pilot phase was conducted in 2003 in 
Senegal with a budget of US$ 531,850.  The full phase si x-country program is expected to start in late 
2005 and will be around US$ 8 million. 
144. In south-western Burkina Faso, FAO and partne rs such as IITA and CIRAD are working with 
diverse local institutions on opportunities to im prove incomes through improved production systems 
with emphasis on crop/pasture/livestock integration.  Reduced tillage to improve soil organic matter is 
central to the theme of the project and sma ll-holder no-till equipment from Brazil is being 
demonstrated and promoted in this regard.  Farmer  enthusiasm is high for a range of ideas they are 
testing.  This initiative dovetails into the IPPM work, especially the part  that focuses on cotton 
management.  Training of traine rs is planned for the next sea son to permit scaling up improved 
management practices based on farm er participatory approaches.  In addition, small holder fruit 
producers in this region are beginning to organize for export of banana and mango to Europe, and in 
response FAO is beginning to explore opportunities to  assist the farmers associations to meet good 
agricultural practice (GAP) requirements for the market. 
145. Cotton is one of the anchor crops being de veloped under the FAO PRODS PAIA (Production 
Priority Area for Interdisciplinary Action) in its be nchmark sites in Burkina Faso and other countries 
of West Africa.  The main activities that FAO is involved in relating to the cotton zones of West 
Africa, include: 
(a) support for promotion of Good Agricultural Practices in Burkina Faso, which is a 
pilot activity for promoting GAPs through out the cotton-cereal-livestock zone of 
West Africa 
(b) support to the pilot project for the Oncho cerciasis-freed zones in  Burkina Faso and 
Ghana which includes cotton growing areas 
(c) support to the Nigeria SPFS (FAO’s Speci al Program for Food Security) which 
covers the cotton zone in northern Nigeria 
146. Moreover, a few new technological projects have  been under preparations.  Preliminary 
discussions between FAO [through the AGST Servic e] and the German Michael Otto Foundation 
have been initiated regarding a project to promot e small holder cotton growing in Africa.  The main 
issues being discussed include how to introduce an environmentally sustainable way of growing 
cotton which is, at the same time, economically prof itable.  It is proposed that the cotton from this 
initiative will be marketed under a newly created labe l "cotton made in Africa".  The Otto foundation 
will link the commercial side of the marketing to the Otto group and to other textile enterprises 
signing into the initiative.  The role of FAO is expect ed to be mainly to assist in the development and 
implementation of a sustainable, environmentally and economically sound way to grow cotton, based 
on conservation agriculture and integrated pest management as well as the establishment of socio 
economically sustainable input supply and marketi ng arrangements for small farmers.  At this 
moment the initiative is at a very early brainstormi ng phase and FAO is just entering into contact with 
the stakeholders.  The initiative has created inter est of the World Bank as well as some German 
Ministries and will start with pilot field sites in several African countries, such as Uganda, Tanzania, 
Mali, Burkina Faso and Benin. 
147. After moving steadily higher since the record low in late 2001, the world cotton price has 
sharply declined since March 2004.  As the world cott on output this year is expected to reach another 
record level at 24 million tonnes, the current world cotton price is dropping below US$ 0.5 per pound again.  If the exchange rate factor is taken into account, the current cotton price would be lower than 
the 2001 price level.  The world cotton market is c onsiderably volatile in recent years.  After surging 
by nearly 50% during March - October 2003, the curre nt cotton prices are more than 30% lower than  WT/GC/83/Add.1 
 Page 31 
 
 
 six month ago.  Given such an extremely challe nging market environment, African cotton producing 
countries urgently need an implementable strategy to  ensure the long-term prosperity of the cotton 
sector by increasing both market efficiency and technological efficiency.  Given FAO expertise in both areas, FAO will actively pursue further projects to assist African cotton producing countries to improve the efficiency and sustainability of the cotton sector, and to design appropriate market and 
development strategies.  Since a stable world cotton market is of great importance for all African 
cotton producing countries, FAO will work with the world major cotton producing and consuming 
countries, as well as other international institutions , to promote actions and measures to reduce the 
unpredictability of the world cotton market for African producers, and manage efficiently the 
attendant market risks.  
D. IMF 
Background 
 
 148. The IMF is providing assistance to its members, including cotton-producing countries in 
Africa,  through three key channels: surveillance, financial support, and technical assistance. Given 
the systemic importance of the cotton sector in the countries concerned and hence its impact on 
overall macroeconomic performance, the IMF has been, and will remain, closely involved in 
encouraging, monitoring and advising cotton-pr oducing countries to push ahead with reforms to 
improve the efficiency of their cotton sectors, diversify production, and introduce market-based mechanisms to stabilize farmers’ in comes. While the World Bank would continue to take a lead role 
in supporting structural reforms to the cott on sector, the IMF can support countries in managing 
balance of payments imbalances and adjustment needs—including those that may stem from the 
volatility in cotton prices. Looking beyond the struct ural measures directed at the cotton sector, the 
long-term decline in cotton prices highlights the ne ed for cotton-producing countries to pursue broad-
based reforms to improve the environment for strong,  sustainable growth led by the private sector. 
The IMF will continue to provide advice and assi stance in support of such reforms—guided, for an 
increasing number of countries, by the framework for broader economic development set out in the 
Poverty Reduction Strategy Papers (PRSPs). 
149. In general, the IMF’s main instrument for supporting low-income countries is its Poverty 
Reduction and Growth Facility (PRGF). Arra ngements under the PRGF support governments’ 
macroeconomic programs directed at achieving sust ainable adjustment in response to balance of 
payments difficulties of a structural character. In this regard, PRGF-supported programs seeks to 
provide a consistent framework integrating macroec onomic and structural policies that will contribute 
to enhancing prospects for sustainable growth a nd reductions in poverty. More broadly, programs 
supported by the IMF reflect economic policies set ou t in countries’ PRSPs, prepared by each country 
through a broad-based participatory process. 
150. While the IMF is prevented under its Articl es of Agreement from providing assistance to 
specific sectors, it can support countries facing balance of payments shocks, including those 
emanating from the cotton sector. IMF staff are considering how the needs of cotton-dependent countries could be given more explicit recognition, and how the IMF could underscore its willingness 
to consider, within the framework of the PRGF, in creased financing should a need arise as a result of 
unexpected shocks to the balance of payments. Fr om this perspective, the main point of the 
approaches under consideration would be to provide a more explicit, advance indication of the IMF’s 
intentions for countries with macroeconomic pr ograms supported by arrangements under the PRGF. 
Consultations on the Development Assistance Aspects of Cotton
 
 151. At the first round of consultations, the IMF (Mr. Hans Peter Lankes) noted that as a 
macroeconomic  institution, the IMF could only play  two specific roles, namely (i) to judge how 
developments in the cotton sector link into the overall economic picture; and, (ii) to contribute to WT/GC/83/Add.1 
Page 32  
 
 mitigating balance of payments shocks.  The IMF informed participants about the flexibility for 
financing existing under the Poverty Reduction Gr owth Facility (PRGF).  This flexibility was 
provided for in the legal provisions for PRGF funding, and with regard to Fund financing 
arrangements in the African cotton exporting countri es, the Fund’s Board was explicitly recognizing 
the need for possible increases in financing as a result  of shocks (a precedent in this regard was set in 
the new Mali 3-year PRGF arrangement, which was approved subsequent to the Cotonou workshop). 
Although the IMF was concerned with the broade r macroeconomic picture and did not provide 
sectoral support, the IMF was currently working on the financing and modalities of the Fund’s engagement with low-income members, including in struments to help members face shocks. This 
work aims to address the particular challenge faced by cotton producers in Africa or similar 
challenges faced by other commodities producers w ith systemic implications for macroeconomic 
performance. In response to a question on the appli cability of the IMF's Trade Integration Mechanism 
(TIM), the Fund clarified that the TIM was designe d to apply to the class of situations where 
multilateral (or third country) trade liberalization created adjustment costs in home countries. 
152. At the second round of consultations, the IM F (Mr. Jean-Pierre Chauffour) focused on the 
more immediate issues faced by cotton-producing c ountries arising from the sizable decline in world 
cotton prices.
4 Policy advice needed to balance two objec tives: (i) production efficiency—this calls 
for letting the price mechanism work, allowing th e pass-through of world price movements into 
domestic price signals, taking into account cotton market structures;5 and (ii) social stability—
indicating that, in some cases, financial support ma y be warranted to those affected by the price 
declines. Preferably, the two objectives should be a ddressed by different instruments: (i) price pass-
through to achieve production efficiency, while en suring cross-country consistency, especially in 
neighbouring countries (like Burkina Faso, Benin, and Mali);6 and (ii) targeted income support (or 
other, non-price-related support) to address the so cial concerns. However, implementing the above 
may face serious practical obstacles if the implied d ecline in domestic cotton prices were to be very 
large. In this case, sufficient income support mechan isms may simply not be available to protect the 
poor, or the implied effect on cotton production ma y have adverse political consequences affecting 
very large constituencies in some countries. This may open the case for budgetary support to cushion, 
at least temporarily, the fall in domestic producer prices. Financial support from donors could also help cushion the impact of the cotton price decline. 
                                                     
 
4 World cotton prices have fallen by some 27%  in U.S. dollar terms over the past year 
(October to October) and, with the euro’s appreciati on, by some 32% in euro (and CFA) terms. Cotton 
prices have, amid some volatility,  shown a generally declining tr end, and available information 
(including from futures market) suggests that much  of the recent price declines is likely to be 
permanent. 
 5 Cotton market structures differ considerab ly across countries in sub-Saharan Africa. 
Notably, producer prices are set by state-owned companies in some countries (e.g., Mali), but by 
largely private-owned companies in others (e.g., Bu rkina Faso). Related in part to the ownership 
structure, budgetary support to the cotton sector varies considerably across countries. 
6 Large producer price differences (say of more than some CFA 20 per kilo) are unlikely to be 
tenable due to both political repercussions and goods arbitrage.  WT/GC/83/Add.1 
 Page 33 
 
 
 E. ITC  AND JITAP 
Informal note on Cotton specific priorities in ITC country programmes and JITAP facilities and 
mechanisms for financial and technical assistance to cotton sector-specific projects  
 153. At this point in time, other than the elements incorporated in the JITAP country project 
documents, the ITC has no cotton-specific priorities in country programmes.  This note answers the 
two questions raised by the WTO
7 with regard to ITC broad actions and to the activities planned 
under JITAP. 
Actions by ITC  
How can the International Trade Centre (ITC) provi de financial and technical assistance to cotton-
specific projects?  
154. ITC’s specific technical cooperation activities ar e demand-driven.  Therefore, detailed needs 
assessment in close cooperation with national c ounterparts would be the starting point for the 
development of specific technical assistance pr ogrammes and projects that would help address 
priority needs to support the export development of cotton, cotton by-products and value added 
products derived from cotton. 
155. Activities proposed by ITC could be undertaken in three delivery modes and at national, sub-
regional or regional levels.  Mu lti-country activities can also be planned to complement specific 
country level activities.  
156. Financial resources will be required to enable ITC to develop technical assistance 
programmes and projects to address priority needs as identified. 
(a) Three delivery Modes 
Technical assistance proposed by ITC could be delivered through one of the 
following modes: 
• Generic tools and multi-country programmes 
 
• Customised initiatives 
 
• Multi-agency, multi-country programmes, more specifically JITAP and the IF 
(b) Three levels of technical assistance 
(i) At national level - Capacity building at institutional level: 
• Strategic and operational market analysis:  This entails an analysis of trade flow 
statistics, using ITC’s tool TradeMap , to assess trade performance at sector and 
product levels. 
                                                     
 
7The two questions raised by the WTO in the letter of 4 November 2004 relate to the actions already 
taken and the actions which the agencies further intend to take, to: 
- Reflect cotton sector-specific priorities in their country programmes and other relevant facilities and 
mechanisms;   and, 
- Provide financial and technical assist ance to cotton secto r-specific project. WT/GC/83/Add.1 
Page 34  
 
  
• Market Access assessment and simulation tool:  Decision makers in the cotton 
sector can use the ITC Market Access Map - MacMap  to assess market access 
conditions. 
 
• Trade information:  ITC can help Trad e Support Institutions (TSIs) strengthen 
trade information services to assist the cott on business community to adjust to the 
new emerging trends. 
 
• Export Quality Management:  ITC can strengthen the capacity of the National 
Enquiry Points (NEPs) on SPS and TBT with regard to the cotton sector. 
 
• Product sector strategy development:  In  order to benefit from the export of 
cotton or value-added products in a sust ainable way, a strategic approach is 
needed, especially when considering the expected changes to take place in 2005. 
 
- Capacity building at the enterprise level: 
• Product and Market Development for Clothing:  With the 2005 Quota Phase-out, 
competitiveness requirements for ga rment manufacturers will increase 
tremendously.  To meet these challeng es, ITC addresses 6 major needs of 
developing countries garment manufacture rs.  This includes i) clothing sector 
strategy development;  ii) benchmarking with competitors around the world;  iii) 
sourcing information and supply manageme nt skills;  iv) understanding changing 
markets after 2005 and developing tailor-mad e market penetration approaches in 
traditional and newly emerging markets;  v)  promotion of e-applications in the 
clothing sector;  and vi) south-south cotton trade development. 
 
• Export Quality Management:  While ITC does not work in the area of agriculture 
production, it can help with quality improvement of the export products by assisting producers and ginners to produce according to market/buyer requirements, which essentially covers post-harvest handling.  
 
• Market development:  ITC can provide assistance to SMEs, small growers, 
ginners and intermediaries to link th em to the right business partners by 
organizing market tours and market missions to selected markets.  
 
• Competitiveness asse ssment:  ITC "Fitness Checker"  tools assist enterprises to 
undertake self-assessment through simple interactive checklists.  
 
(ii) At the regional and sub-regional levels 
ITC could provide trade-related technical  assistance at regional and sub-regional 
levels to create synergies and to ensure that initiatives undertaken help to strengthen 
the export capacity of cotton producing countries within the region or the sub-region.  
• Strengthening sub-regional negotiating capacities:  ITC can organize Business for 
Development  workshops, training and information dissemination sessions at 
regional and sub-regional leve ls.  South-South trade along the value chain:  Some 
African countries are looking into the feasibility of developing an integrated value chain from cotton towards clothing production.  While ITC cannot assist in the development of a textile industry, it  can assist in creating business linkages 
between African countries with complementary production factors and trade  WT/GC/83/Add.1 
 Page 35 
 
 
 interests.  ITC can bring cotton growers, ginners, fabric manufacturers and 
clothing manufacturers closer together to do business along a regional value chain to be finally able to penetrate the major clothing markets. 
 
• South-South trade development along an inter-regional value chain of cotton, 
cotton textiles and cotton clothing products:  Exporting cotton to China and 
cotton fabrics back to Africa for exportation of clothing to the US and EU, fully complying with rules of origin requirements. 
(iii) At global level A selected number of products/activities woul d also enable ITC to help link national 
capacities to regional and global networks. 
• A "Cotton Guide" :  ITC could prepare a "trader’s manual on cotton".  The guide 
would contain basic and operational in formation on the international cotton 
market and its requirements, with practical  help to the trader and the producer.  
 
• Market studies on cotton by-products a nd valued-added cotton products:  these 
studies would help producing countries to identify and analyze potential export markets in order to diversify exports beyond the commodity market. 
 
• Facilitation of Technical Cooperation am ong Developing Countries (TCDC):  As 
more cotton consuming industries will be  based in developing countries, 
especially after the textiles and clothing quota phase-out, ITC can facilitate the transfer of knowledge and especially market/buyer requirements from cotton consuming industries in developing countries to growers, ginners and 
intermediaries. 
 Actions under JITAP
 
 157. There is no specific chapter in the JITAP progr amme document for cotton, and none for any 
other product sector, as sector-specific actions are determined in the country project documents 
through consultations among the countries and the JITAP agencies, ITC, UNCTAD and WTO.  In the 
framework of JITAP five modules however, some ac tivities and capacity-building targets touch upon 
the cotton sector or directly relate to supporting the cotton economy.  
(a) Generic capacity-building actions 
(i) Preparation of negotiating positions 
158. Through its Module 1, led by UNCTAD, JITA P supports the Inter-institutional Committees 
(IICs) in each JITAP country and their technical sub-committees that cover among other topics, the 
negotiations on agriculture.  As the "cotton case"  is now embedded within the negotiations on 
Agriculture, institutional capacity-building suppor t will also cover the cotton sector and related 
negotiations.  JITAP’s interventions are undertaken in  the form of technical advisory missions and 
communications, as well as limited financial suppor t to the operations of the IICs and their 
subcommittees.  In several countries, "Technical Notes" are being prepared, upon request by and 
under the supervision of the Ministry of Trade, to  help the various IIC s ubcommittees, involved in 
ongoing negotiations, to have a quick summary of the status of play at the WTO, with some elements relating to the impact of negotiations on the country ’ interests.  Such notes are normally prepared by 
national consultants.  Many of these notes relate to  the negotiations on agriculture.  The agencies, 
particularly UNCTAD, as leader of Module 1, would assist on an ad-hoc basis when needed.  This WT/GC/83/Add.1 
Page 36  
 
 type of interventions does not relate speci fically to cotton, as no specific requests for ad-hoc 
assistance have been received as yet. 
(ii) Managing MTS information 
159. Under Module 2, led by WTO, JITAP helps the countries in setting up National Enquiry 
Points and Reference Centres, including two NEPs  that can be solicited in supporting action in the 
Cotton sector, namely one on Technical barrier s to Trade (TBT) and one on Sanitary and 
Phytosanitary Measures (SPS).  Similarly, three Refe rence centres geared to ser vicing the officials in 
the national Governments, the business community a nd the academia can play a role in disseminating 
information on the MTS in general and on the negotiation of agriculture. 
(iii) Training and networking on the MTS 
- Training workshops on cotton-related topics  
160. Under its Module 3, implemented jointly by ITC, UNCTAD and WTO, JITAP has scheduled 
a number of training and capacity-building works hops, including one on Agreement and negotiations 
on Agriculture, including Cotton and on Sanitary and Phytosanitary Measures (SPS) and Technical Barriers to Trade (TBT) to be held in Cameroon, Kenya and Tunisia.  Three to four trainers and 
professionals from each JITAP country will participate in this workshop, with the aim to acquire up-
to-date knowledge and expertise for improving the s upport to national activities on the related topics, 
which will cover the cotton sector. 
- Videoconference on textiles and clothing  
161. In the framework of its networking Module 5, JITAP has also scheduled a capacity-building 
and briefing videoconference to be organized durin g the second quarter of 2005, to update all JITAP 
stakeholders and exchange views with them on the new situation and trends on the international 
market of textiles and clothing, further to the phasi ng out of the MFA by the end of this year.  This 
videoconference will be jointly supported by ITC, UNCTAD and WTO.  The relevant members of the 
inter-institutional committees, and private sector stak eholders in JITAP countries will participate in 
the videoconference. 
Country-Specific Actions
 
 162. Three of the "Cotton case" proponent countries are members of JITAP, namely Benin, 
Burkina Faso and Mali.  From among the thirteen JITAP countries
8 interested by the sector, eleven 
underscored the cotton sector in their JITAP country -specific project documents, as being important 
for their economies.  
163. Benin, Burkina, Cameroon, Côte d’Ivoire, Ghan a, Kenya, Mali, Tanzania, Tunisia, Uganda 
and Zambia made specific requests for some action to  be undertaken, in the form of needs assessment 
studies, formulation of sector specific strategies, or even for precise product and market development actions, as follows: 
164. Benin
 – Due to the "absence of a strategic vision for some important sectors, … notably the 
cotton sector, … that could contribute to the divers ification of exports", the authorities requested 
JITAP to provide technical assistance for the stre ngthening of the country’s negotiation capacity, with 
a focus on the cotton sector.  More precisely, the Benin project document has stated "For the cotton 
                                                      
8From among the "26 involved African countries" in the WTO African regional workshop on cotton, 
held at Cotonou, Republic of Benin on 23-24 March 2004, Benin, Burkina Faso, Cameroon, Côte d’Ivoire, 
Kenya, Malawi, Mali, Mozambique, Senegal, Tanzania, Tunisia, Uganda and Zambia are JITAP countries.  WT/GC/83/Add.1 
 Page 37 
 
 
 sector and to help diversify products and markets, a study will be undertaken to present the country’s 
needs for assistance by the development agencies, in the context of JITAP or other programmes." 
165. Burkina Faso  – The following is extracted from the JITAP project document "Since few 
months, the attitude of indifference of the genera l public towards the Multilateral trading system has 
changed with the denunciation of s ubsidies granted by the United States and the European Union to 
their cotton producers.  This issu e resulted in a higher awareness (of the critical importance of the 
MTS) by all stakeholders in the cotton sector, among the civil society, the private and public sectors, politicians and the media and culminated in the trip  undertaken by the President of the Burkina Faso 
the WTO headquarters in June 2003, to defe nd the desperate situation of African cotton 
producers …". 
166. Among the problems faced by Burkina Faso that could be addressed by JITAP, the project 
document mentioned the following: 
• Better knowledge by the members of the Na tional Commission to Follow-up the WTO 
agreement of MTS negotiations and international economic relations; 
 
• Improvement of the skills of the trade negotiators; 
 
• Formulation of a "strategic vision" for priority sectors, including the cotton sector. 
 167. As for Benin, the Burkina Faso project documen t requested a study to define the country’s 
needs for assistance by the development agencies, in  the context of JITAP or other programmes, to 
help develop new products and markets. 
168. Cameroon
 – The formulation of export strategies in the agricultural sector was also retained 
as a national priority, particularly for subsistence and export crops in including cotton.  The cotton 
exports in this country amount to about 80,000 t ons of cotton yarn and more than 200,000 tons of 
cotton seeds.  In an initiative to prevent negative effects on the important cotton sector in Cameroon, 
due to subsidies on the international market, the JITAP project document also requested the implementation of an export development progra mme to promote agricultural outputs including 
cotton and by-products.  This would entail conducting: 
• Diagnostic studies with regard to the supply capacity of the country; 
 
• Market orientation tours and product-mark et development actions to be defined; 
 
• Formulation of a sector strategy for cotton th at would take into account existing surveys 
and work relating to the priority sectors a nd their potential for alleviating poverty in 
Cameroon; 
 
• Organizing a national symposium in conjunction w ith the Ministry of Trade, the Ministry 
of Agriculture, the Cotton National Development Company and other stakeholders.  
 
169. Cameroon also intends to conduct an impact survey on the cotton and textiles industry and 
proposed to organize a subregional workshop to impr ove the knowledge and foster interactions on this 
sector. WT/GC/83/Add.1 
Page 38  
 
 170. Côte d’Ivoire
 – This country pointed similar problems in their cotton sector that could be 
addressed by JITAP, including the following: 
• Enhanced expertise of the National Inte r-Institutional Consultative Committee on the 
WTO; 
• Improvement of trade negotiators’ skills relate d to agriculture including the cotton sector; 
• Review of the "quality chain" and assistance to exporters in this area;  and  
• Development of a strategic appro ach for the for the cotton sector. 
171. Mali  – The lack of a strategy to develop the cotton sector that takes into account the recent 
developments on the international markets was also pointed out as a weakness to be addressed.  The 
project document, however, did not call for specifi c actions by JITAP.  A validation workshop is 
planned under the Integrated Framework for end of  November 2004, when the country might review 
its needs for assistance, further to which more precise requests may be received from Mali. 
172. Uganda  – Among the main commodities produced by Uganda, cotton ensures important 
export earnings with even higher potentials.  In r ecent years, Uganda has made efforts, including 
through ITC and JITAP, to diversify its economic ac tivities into specialty crops such as floriculture, 
spices, fruits and vegetables to reduce its depe ndence on a few volatile export commodities, with 
remarkable success.  The shortfall in export earning s from coffee, cotton and tea has been more than 
offset by exports of these crops.9 The industrial sector makes up an increasing share of real GDP and 
now accounts for about 20 per cent, with agro-process ing making up the bulk of industrial production, 
next to manufacturing, mining and quarrying, pub lic utilities and construction.  Services contribute 
some 38 per cent to GDP and 13 per cent of employment, whereby tourism plays an important role. 
173. While JITAP did not cover specifically the cotton sector during its first phase in Uganda, it 
facilitated the development and im plementation of targeted activiti es under other bilateral projects, 
including by the USAID.  Under the current phase of  JITAP, Uganda did not specify any particular 
action for the cotton sector. 
174. Zambia  – The agricultural sectors with high grow th potential include cotton and textiles, 
especially cotton yarn.  Like other countries Zambia ’s has elements of a national export strategy 
premised on the promotion of non-traditional expor ts, which include cotton and textile products.  "To 
make it more effective, the strategy however needs to be consolidated through sector-specific 
interventions, intended to be undertaken in the framework of JITAP." 
175. Ghana  – Kenya  – Tanzania  – Tunisia  – In various ways, JITAP he lped develop during its first 
phase in these four countries, a number of export sector  strategies, including for textiles and garments.  
In Tunisia, market development actions were also unde rtaken in specific countries.  There is a need to 
follow up these actions and perhaps to integrate appr oaches in the context of the totally liberalized 
international market for textile products.  While Ghana and Tanzania requested the implementation of 
some elements of the sector strategy that was de fined for their textiles sector, actions in the other 
countries remain to be determined with due account  taken of the resources available to the JITAP 
programme.  
  
                                                     
 
9See Memorandum on Economic and Financial Policies of the Government of Uganda for 2003-04.  WT/GC/83/Add.1 
 Page 39 
 
 
 176. The priority actions expressed by Ghana for example relate to: 
• "Capacity building and training in garment designs, fashions;  and 
 
• Strategic alliances with other textile asso ciations to easily penetrate markets; 
 
• Massive Promotion of textile products; 
 
• Initiation of pilot projects for the textiles and garments sector; 
 
• Initiation of work for the identification of additional products for development". 
 177. Tunisia in turn, intends to concentrate efforts on promoting high quality products in the textile 
sector, targeting the upper segments of international markets. 
178. Other countries
 – Several other JITAP countries, such as Botswana and Senegal have stressed 
the need for the promotion of export-led industria lization and foreign direct investment into non-
traditional goods, such as textiles, clothing, etc, without further precision on what needs to be done.  This may be a scope for further n eeds assessment through a closer involvement of stakeholders in the 
countries. 
179. All the above activities fall under the ITC-led M odule 4 of JITAP on export sector strategies 
for goods and services.  Actions will be implem ented using the various tools and expertise 
enumerated under Chapter A. above, subject to th e availability of resources.  Specific actions are 
programmed with the countries in the yearly impl ementation plans prepared by the agencies and the 
country stakeholders.  It must be noted that JI TAP resources may not be sufficient to address all the 
priority needs that were expressed. 
F. UNIDO 
Second Round Of Consultations on the Developmen t Assistance Aspects of the Cotton Initiative, 
November 2004  
 180. Mr. Chairman, UNIDO participated in the WTO Regional Workshop held in Benin, last 
March and there we presented how we see UNIDO’s role in the context of our various technical 
assistance programmes which focus on improvement  of competitiveness of the cotton sector, UNIDO 
also participated in the conference organised by th e EU in Paris last July, which aimed at discussing 
the EU initiative on cotton.  At this conference th e EU presented a draft roadmap related to the Africa 
Cotton Partnership Initiative.  In this occasion UNIDO expressed it willingness to cooperate.  As 
proposed in the Paris forum I would like to conf irm the interest and availability of UNIDO to 
participate in the implementation of the EU – Afri ca Cotton Partnership Initiative, in a comprehensive 
and sustainable manner and in close cooperati on with the other international organizations. 
181. UNIDO is now assisting the UEMOA country producers of cotton through the 
UEMOA/EU/UNIDO quality programme.  In view of the social and economic importance of the 
cotton sector, it has been included as a priority sector in our quality programme.  The following 
actions amongst others are now under implementation: 
• The development and promotion of a special cotton label for UEMOA cotton, together 
with other activities to enhance the market image and promotion of UEMOA cotton products in cooperation with the African Cotton Association.  To this end, an Expert 
Group Meeting will be organized in Ouga dougou from 6 to 8 December 2004.  The 
Association Cotonière Africaine (ACA) and the "Association Française du Coton" have been invited.  The event will bring together experts from the 8 UEMOA countries to WT/GC/83/Add.1 
Page 40  
 
 elaborate on the establishment of sub-regiona l standardization facilities in the cotton 
sector. 
 
• The purchase of two instrumental cotton classification systems and accessories High 
Volume Instrument (HVI) fo r Mali and Togo.  The system should be capable of 
measuring on one sample and in one single pr ocess various physical parameters of cotton 
fibers (such as fiber length, short fibers, fiber length uniformity, fiber strength and 
elongation, micronaire, maturity, colour, and trash), giving results with known precision and accuracy.  The system should provide test results recognized worldwide in 
international trade, with successful applications in cotton processing. 
 
• UEMOA also agreed assistance for reparation of the HVI of Burkina Faso.  The HVI 
equipment will be used for the classification of cotton fiber in the three UEMOA countries and will also serve for training of t echnicians and classifiers of cotton in the 
region. 
 
• A training programme on capacity building on the measurement in relation to 
classification, ginning and commercializing will run during the picking season in the 
principal cotton-producing countries (Benin, Bu rkina Faso, Mali, Senegal, Togo and Cote 
D'Ivoire).  More than 120 classifiers of cotton, technicians of HVI and traders will participate in the training. 
 UNIDO’s possible Contributions
 
 
182. Based on UNIDO’s mandate, experience and comparative advantages, the following actions 
could be implemented by UNIDO: 
183. National and regional strategies: 
• National policies and strategies for developm ent of cotton and related institutional and 
regulation reforms (Investment, Funding, T echnology transfer, etc) elaborated for 
selected African countries pr oducers of cotton and submitted to policy-making organs for 
approval.  The strategy will include sectoral  competitiveness analysis including actions 
plans and Road map (Green and White Papers ).  The analysis should focus on problems 
facing export of the African cotton products, investments in chain integration activities, 
technology transfer and quality of cotton products and establishment of strategy and 
action plan for selected African countries producers of cotton; 
 
• National capacity building in the field of inv estment and technology transfer including:  
strengthening capacities of the national investment promotion agencies, establishment of regional/national investment data basis, orga nization of sub-regional Cotton Investment 
Forums. 
 
184. Policies and institutions: 
• Capacities of the existing support instituti ons enhanced:  Cotton/Textile Technical 
Centres and Cotton Trade Associations in selected countries and assistance for 
transforming them into sub-regional center for technical assistance in  the field of cotton 
(Centre of reference).  The Technical Centers could provide to the various players of the 
cotton chain appropriate technical assistance in the field of training, consultancy, information and technology watch services,  CAD/CAM services, quality management 
and productivity, analysis and testing;  Technical centres are critical to the success of 
cotton value chains and are important providers of specialized services to their members.   WT/GC/83/Add.1 
 Page 41 
 
 
 • Traditional textile industry promoted throug h entrepreneurial, technical and market 
training;  upgrading of equipment;  new pr oduct development, organization of artisan 
associations and regional cooperation.  
 185. Technology innovation: 
• National capacities of the quality infrastruct ure strengthened with focus on cotton at 
regional and national levels in cluding:  harmonization of policy and procedures for testing 
and classification of cotton products, developm ent, adoption and promotion of standards 
related to cotton products (including the A frican Standard for Cotton), accreditation of 
selected laboratories (specialized in testi ng cotton products) to be selected from selected 
African countries producers of cotton, training of classifiers of cotton fibre, laboratory staff, association of farmers, reduction of contamination, development of documentation 
centres (TBT and standards library ) with focus on cotton needs; 
• Quality Assurance systems and GMP (Good Manufacturing Practice) introduced on pilot 
demonstration basis in selected cotton and textile enterprises; 
• Instrument-based cotton quality evaluation sy stem (HVI - High Volume Instrument) 
established for grading and testing cotton fibre on pilot basis in four Sub-regional Cotton Technical Centres; 
• Cotton quality database developed based on HVI classification for selected African 
countries producers of cotton (countries using HVI systems).  This system is being 
implemented in some developed country producer s of cotton - the USA, Australia, Brazil, 
Israel, China, etc.  The Secretariat of the International Cotton Advisory Committee 
estimates that 30% of world cotton production was evaluated with instrument classing systems in 2002/2003; 
• Special Cotton Label for African Cotton de veloped and promoted with the aim to 
standardise the quality of cotton in cooperati on with the African Association for Cotton. 
186. Chain integration: 
• Supply capacity strengthened to improve productivity and competitiveness on pilot 
demonstration basis through restructuring a nd upgrading of selected cotton and textile 
enterprises (access to new technologies and i nnovations, strategy development, market 
promotion,).  The enterprises will be selected from selected African countries producers of cotton.  Our objective is to increase the local transformation at first and second levels 
in the cotton, textiles and garments value chain; 
• Export capacities of cotton and textile ente rprises and market information system 
developed in selected African region; 
• Market image enhanced and Brand of Afri can cotton/textiles and Garments products 
promoted in cooperation with the African Cotton Association; 
• Global forums (in each African region) on Integration of African Cotton/Textiles and 
Garments products in the Global Production Networks in cooperation with the African 
Business Round Table (Cotton/Garments/Textiles cluster).  WT/GC/83/Add.1 
Page 42  
 
 G. W
ORLD BANK 
World Bank’s Activities in the Cotton Sectors of West and Central African Countries10 
 187. The objective of this note is to outline the Wo rld Bank’s lending and non-lending activities in 
the cotton sectors of West and Central Africa.  Th e Bank’s involvement typically takes the forms of 
policy analysis, technical assistance and capacity bu ilding, and lending operations (either investment 
or adjustment) from IBRD loans or IDA credits.  Th e remaining of this note briefly describes the main 
activities in these areas, each accompanied by a detailed table. 
(a) Policy Analysis 
188. The World Bank has been active in assisting th e reform process in the cotton-producing 
countries of sub-Saharan Africa (table 1 gives a comprehensive list of World Bank’s activities in 
policy analysis.).
11  In the case of the policy debate of the West and Central African cotton producing 
countries, numerous consultations  have taken place among the rele vant stakeholders, including 
farmers’ organizations, the cotton companies, th e French cotton parastatal, and the multilateral 
donors.  Initially, the discussion regarding the reasons  for reform took a heated tone, most likely due 
to misunderstanding.  Later, however, a consensus emerged [1].  As the special issue of Cotton 
Outlook on the cotton sector of West and Central Africa noted (p. 2):  "Much of the impetus for 
change in the regions has come from … the World Bank [which] provides a cl ear outline of the main 
policy options now under consideration.  It is en couraging to note that the sometimes acrimonious 
nature of the recent debate with regard to the future of cotton in Francophone producing countries 
appears to be giving away to a more constructiv e dialogue." Following up actions between the World 
Bank and AFD included two major regional mee tings, a technical symposium on cotton sector 
policies in Ouagadougou in 1999, and a ministerial m eeting in Abidjan in 2002 on the cotton reforms 
and the global environment for cotton trade. 
189. The World Bank and the International Co tton Advisory Committee co-sponsored the 
conference on "Cotton and Global Trade Negotiations " (July 8–9, 2002) during which trade policy-
related issues of the global cotton market were fiercely debated.12  A large number of participants 
attended the conference, including staff from inte rnational organizations, Ambassadors from African 
cotton producing countries, academics, CSO represen tatives, and a representative from the National 
Cotton Council of America.  The conference was in strumental in boosting awareness of the global 
policy environment in the cotton market and is beli eved to have triggered the debate on the ‘cotton 
problem.’ 
190. Other analytical work on cotton includes a larg e study which examined in great detail the 
market setting and trade policy issues of the cotton market [9]13 Updated versions of that report were 
presented at the WTO-sponsored Coto nou workshop (March 23-24, 2004) [10] and the FAO cotton 
consultation (May 31-June 1, 2004) [12].  A summary version of that report appears in Global 
Agricultural Trade and Developing Countries , a volume edited from the World Bank analyzing 
commodity and cross-cutting trade policy issues [9].  Other policy-related work includes two Trade 
                                                      
10Presented at the second round of consultations on  the "Development Assistance Aspects of the Cotton 
Initiative" WTO, November 18, 2004. Questions/comments should be directed to John Baffes, (202) 458-1880, 
jbaffes@worldbank.org . 
11It should be noted, however, that the list of studies is not meant to be exhaustive since it only includes 
reports and papers that have been published or presented at conferences. Numerous other reports that have served as background material to lending operations and other sector work is not listed here. 
12The proceedings can be found at http://www.icac.org/icac/govt_m easures/documents /english.html. 
13An early version of this report was the first document to precisely outline the nature and extent of US 
cotton subsidies. OECD, which monitors transfers to the agricultural sectors on an annual basis through its 
producer support estimate calculations, does not include cotton. ICAC, on the other hand, which has been 
monitoring cotton subsidies since 1994, reported only part of US subsidies.  WT/GC/83/Add.1 
 Page 43 
 
 
 Notes , which focused on the US and EU assistance to their cotton sectors [6] and the implications of 
the recent WTO Dispute Panel’s decision on the US/Brazil cotton dispute [13].  Other studies include 
work on the price relationship between synthetic fibers and cotton [8], evaluation of policy reforms 
undertaken by African cotton producing countries [3, 4, 5, 7] , and evaluation of some recent attempts 
to introduce cotton futures contracts [2, 11]14 
191. Several analytical pieces are under way, includi ng examination of prices received by growers 
in numerous cotton producing countries and whethe r reforms undertaken during the 1990s had any 
detectable (positive or negative) effect on such pric es.  Another study will evaluate the cotton models 
analyzing the effects of liberalization of the global cotton market on world prices and export shares of major exporters.  This study is motivated by the desi re to shed some light on the diverse outcomes of 
a plethora of models that were developed follo wing the "Cotton Initiative" and the Brazil/US cotton 
dispute. 
(b) Technical Assistance and Capacity-Building 
192. The two main areas of the World Bank’s involvement in technical assistance and capacity 
building are identifying ways to manage risk  through market-based risk mitigation devises and 
identifying constraints to trade facilitation and e xpansion through the Diagno stic Trade Integration 
Studies. 
193. The Commodity Risk Management Group (CRMG) provides technical assistance and training 
to build the capacity of developing country producer s to use international risk management markets to 
hedge their exposure to short-term  price and weather-related risks.
15 Price-risk management in the 
cotton sector is complicated due to the presence of  high basis risk—that is, low correlation between 
the New York Board of Trade futures contract and the A Index, the main price measure of the world 
cotton market.  In addition to the basis risk, u se of the New York contract by producers and traders 
outside the United States involves currency risk (for example, €/$ exchange-rate risk in the case of 
West and Central Africa).  Despite these difficu lties, the CRMG has had some success in helping 
cotton producers to gain access to these markets.  For example, in Tanzania, the group worked with a 
rural financial institution as intermediary to help cotton farmers hedge their price risks. 
194. Currently, the World Bank along with the EU and AFD are working together on a project to 
examine the possibility of introducing market-based  risk management tools in West and Central 
Africa.  They are expected to explore the poten tial for a pilot in Benin and Burkina Faso.  An 
identification mission is expected to visit these countries in December 2004.  The specific issues to be 
addressed during this mission are:  (i) assessment of the need and interest of cotton ginners to pilot the 
use of market-based instruments in addition to cu rrent practices;  (ii) assessment of the need for 
corporate reserve funds (self-insurance) taking into  account the increased use of international risk 
markets, and how the operation of these funds woul d mesh with possible market-based approaches to 
risk management;  (iii) identify elements for a r ealistic price formation policy (with or without the 
pilot);  (iv) identify modalities for the pilot, the required commitment, funding and timing;  and (v) 
assess the need for and feasibility of  a credit line or financing facility to facilitate access to market-
based risk management instruments. 
                                                      
14Twice a year the World Bank publishes a one-pag e update on the global cotton market (along with 
other commodity markets) which includes short- and long-term price forecasts. 
15The Commodity Risk Management Group of the Wo rld Bank serves as the secretariat for the 
International Task Force on Commodity Risk Management, a group comprising representatives of producer 
groups, private sector providers of risk management instruments, donors, nongovernmental organizations, and 
international institutions, all of whom share a commitment to a market-based approach to managing risks in commodity production and processing in developing countries. The CRMG has been active in its current 
structure since 2001. The group's early work was larg ely with coffee producers, but recently the focus has 
expanded to cotton and other commodities. WT/GC/83/Add.1 
Page 44  
 
 195. A second channel of technical assistance and capacity building in which the World Bank has 
played a key role is the Diagnostic  Trade Integration Studies (DTIS).
16 The purpose of these studies is 
to identify key constraints to a country’s successfu l integration with the multilateral trading system 
and global economy.  Eventually these studies are to be followed by some type of technical assistance.  Chad, Burkina Faso, and Benin have applie d to join the Integrated Framework.  Given the 
importance of cotton to these countries, it is likely th at in the IF studies, cotton will feature in the 
policy and technical assistance.  Mali has undert aken a diagnostic trade integration study. 
(c) Lending Operations 
196. The World Bank’s lending operations are either dir ected to a particular sector in the form of 
investment or go to support the general budget an d are typically accompanied by conditionalities in a 
particular sector;  these operations are either Poverty Reduction Strate gy Papers (PRSCs) or 
adjustment lending.  During the last few years, the World Bank made loans in West and Central 
Africa that had components directly or indirectly affecting the cotton sector (for related operations  
between 2001-2003 see table 2).
17 Note that projects in West and Central Africa mentioned here are 
on IDA terms—i.e., either grants or loans which ca rry a low interest rate;  for instance, IDA loans 
during 2004 had a 70% grant element on US$ 2. 9 billion and 100% grant on US$ 1.3 billion. 
(i) Investment Lending 
197. Under the Agricultural Services and Producer Organizations Project, approved in 2001, the 
authorities in Mali are expected to implement the first phase of the reform program.  Its objectives 
were to (i) restore the cotton company’s financial stability so as to allow it to secure financing;  
(ii) achieve efficiency gains in the cotton compan y through restructuring and divestment of non-core 
activities;  (iii) divest to the private sector the cotton collection and marketing activities in one cotton 
growing area;  (iv) privatize the cotton-oil company;   (v) assure that the producer price of cotton for 
the 2001–02 crop year was high enough so that confidence of the farmers would be maintained, compensate for the heavy losses in ru ral incomes suffered in 2000–01, and redress the impact on rural 
poverty;  and (vi) define and prepare the final phase of the sectoral reform program. 
198. The Cotton Sector Reform Project in Benin (a pproved in 2002), is expected to facilitate 
transition to a competitive system through support of private sector operations and institutional 
change resulting from the privatization of th e National Company for Agricultural Promotion's 
(SONAPRA) ginning activities.  This project compone nt’s main focus is supporting the institutions 
involved in cotton ginning and primary marketing to  help them become strong and effective.  
Technical assistance and advisory services will cover management responsibilities, auditing, and 
financing operations, including training for institutio nal capacity building.  Furthermore, the project 
                                                     
 
16The DTISs are carried out by the Integrated Framework for Trade Related Technical Assistance (IF), 
a multi-agency forum, which was envisaged by the WTO at  its first Ministerial in Singapore in December 1996, 
and formally endorsed at a High Level Meeting in October 1997. The specific objective of the IF is to assist 
Least Developed Countries (LDCs) to better to integr ate into the world economy and the multilateral trading 
system as a basis for sustainable growth and poverty reduction. This objective is to be achieved, in part, by strengthening coordination among participating agencies and donor countries and ensuring that technical 
assistance is demand driven. Particip ating agencies are the WTO, the IM F, the International Trade Center, 
UNDP, UNCTAD, and the World Bank. 
17Two cotton-related lending operations were approved during the 1990s. Approved in 1994 for a total 
of US$ 14 million, the Cotton Development Project in Uganda sought to improve performance in the cotton industry through liberalization of cotton processing and export marketing;  establish an efficient regulatory 
framework for the cotton industry;  and improve mana gerial, technical, and oper ating efficiency in a 
creditworthy ginning industry. Approved in 1995 in the amount of US$ 66 million, the Cotton Improvement Project in Uzbekistan was designed to liberalize prices of cotton seed, bring producer prices for seed cotton 
marketed under the state system closer to international prices, create a private cotton-planting industry, 
eliminate input subsidies, and shift cotton trade from barter-based to cash-based transactions.  WT/GC/83/Add.1 
 Page 45 
 
 
 will support the implementation of sectorwide technical-service programs to help the private sector 
take over the agricultural services and other techni cal support functions carried out by SONAPRA.  
The effort to privatize SONAPRA’s ginning plants  includes assistance and a dvisory services, notably 
to address social issues and the financial n eeds of the government's conversion program. 
(ii) PRSCs and Adjustment Assistance 
199. In addition to the lending operation with com ponents directly linked to the cotton sector, a 
number of Poverty Reduction Support Credits (PRSC)  and Adjustment Operations have components 
with strong likely impact in the cotton sector.  Th e Third Structural Adjustment Credit in Mali, 
approved in 2001 (and closed in June 2004), supporte d (i) recovery and restructuring of the cotton 
sector to restore positive economic growth and (ii) public expenditure reforms aimed specifically at 
advancing the government's poverty reduction objectiv es.  The government laid out its policy for 
reforming and liberalizing the cotton sector, including  a plan to privatize the cotton company’s agro-
industrial and commercial activities.  The first ph ase of the project included initial divestment 
activities and design of a full sector-liberalizati on program.  The restructuring program will 
necessarily span several years and require an effort  to create an appropriate framework to attract 
private capital and know-how and to build the capac ities of key participants, notably the farmers' 
organizations.  Reinforcement of the capacity of farm ers' organizations to play an increasing role in 
the management of the cotton sect or will be provided separately. 
200. The Second Poverty Reduction Support Credit Project in Burkina Faso, approved in 2002, is 
an integral part of the Country Assistance Strategy to support the implementation of the PRSP.  It is 
the second in a series of three planned operations.  The project is designed to help the government 
achieve better outcomes in public resource manage ment by (i) strengthening program budgets and 
linking allocations to specific sector objectives, strategies, and action plans;  (ii) improving service delivery in education, health, and rural development;   and (iii) strengthening the fiduciary framework 
to promote accountability and transparency in the use of public funds, including external aid.  In the 
context of its rural development component, the gov ernment, in collaboration with the World Bank, 
will closely monitor the poverty impact of cott on liberalization in the medium-term and take 
corrective measures if necessary. 
201. The Fourth Structural Adjustment Credit Project  in Chad, approved in 2003, is designed to 
support the cotton-sector reform program.  Its primar y goal is to improve the livelihoods of about 
300,000 poor families.  Given the complexity of the reform program, whic h was introduced in a 
context of depressed world cotton prices and barely functioning rural markets, it was a challenge to 
ensure the program's consistency with its stated obj ective.  To overcome this risk, a study has been 
carried out to identify the most appropriate scenar io for the state's divestiture from Cotontchad.  
Moreover, an extensive poverty and social impact an alysis is being completed, the results of which 
would feed into the design of the reform program  and allow for ex-post adjustments if necessary. 
202. Numerous lending operation with likely impact in the cotton sectors of the WCA countries 
are under way.  In Mali, the fourth Structural Adju stment Credit (not yet appraised) aims to reduce the 
fiscal risk of 2005 cotton sector deficit as well as pot ential future cotton deficits (in the transition 
period toward privatization of the national cott on ginning company), by ensuring burden sharing in 
the coverage of the 2005 deficit among sector stak eholders, and strengthening  the producing pricing 
setting mechanism.  The Credit (if it proceeds as pl anned) would be a one tranche operation disbursed 
upon effectiveness, with all actions to be completed in advance of Board presentation. 
203. 
In Burkina Faso, the upcoming third Poverty Reduction Support Credit (US$ 50 million) is 
expected to continue to foster the reform pro cess in the cotton sector by supporting participatory 
mechanisms for developing the rules and conditio ns governing the opening of two cotton zones to 
private investors, awarding the contracts, and addressi ng issues related to input financing.  Three more 
operations with important cotton-related components are the Agricultural Diversification Project in WT/GC/83/Add.1 
Page 46  
 
 Burkina Faso currently under preparation (about US$ 35 million, but the exact amount will depend on 
IDA funding availability);  in Chad, the Instituti onal Support Credit is expected to help the cotton 
sector begin its transition to a more market-oriented structure;  and, the Agricultural Diversification 
Project in Mali (US$ 35 million) will assist the di versification of cotton growers away from cotton to 
other crops. 
  
  WT/GC/83/Add.1
 Page 47TABLE  1:  C OTTON -RELATED  POLICY  ANALYSIS  IN THE WORLD  BANK:  2000-2004  
DATE TITLE DESCRIPTION 
[1] December 2000 Cotton Reforms in West and Central 
Africa, and the World Bank Articulated, for the first time, the World Bank’s po sition on the cotton sector reforms in West and 
Central Africa [appeared in the special issue of the Cotton Outlook :  Cotton in the Franc Zone ]. 
[2] December 2001 Identifying Price Linkages:  An 
Application to the World Market of Cotton Examined the degree to which cotto n price are linked.  It concluded that while West African and 
Central Asian price quotations move together, other quotations, including US, do not [appeared in Applied Economics ]. 
[3] May 2001 Policy Reform Experience in Cotton 
Markets Studied the cotton sector reform experience of  Uganda, Tanzania, and Zimbabwe [published in 
Commodity Market Reforms:  Lessons of Two Decades , ed. Akiyama et al. Re gional and Sectoral 
Studies, World Bank]. 
[4] July 2002 (a) Cotton Sector Strategies in 
West and Central Africa Examined the reforms required to make the cottons  sectors of West and Central Africa competitive 
[appeared in World Bank’s Policy Research Working Paper  Series ]. 
[5] December 2002 (b) Tanzania’s Cotton Sector:  
Constraints and Challenges 
in a Global Environment Looked at the reform process of the Tanzanian co tton sector and identified excessive regulation 
and taxation as major impediments for further grow th of the sector [appeared in the World Bank’s 
Africa Region Working Paper Series  and a shorter version in Development Policy Review ]. 
[6] September 2003 Cotton and Developing Countries:  A Case 
Study of Policy Incoherence Identified policy interventions in  the cotton sectors of the US and the EU and reported a detailed 
breakdown of the US support.  It was distributed widely at the Cancun Ministerial [appeared in 
World Bank’s Trade Note  series]. 
[7] November 2003 Reforming the Cotton Sector in Sub-
Saharan Africa Evaluated the reforms efforts in many East and West Africa cotton producing countries [appeared 
in World Bank’s Africa Region Working Paper Series ]. 
[8] December 2003 Relationship between Cotton and 
Polyester Prices Examined the relationship between  cotton, polyester, and crude oi l prices [presented at the FAO 
sponsored commodity workshop;  also to appear in a volume edited by Sarris and Hallam]. 
[9] February 2004 Cotton:  Market Setting, Trade Policies, 
and Issues A comprehensive study which looked at the market structure and trade policy aspects of the global 
cotton market [appeared in World Bank’s Policy Research Working Paper Series ;  summary version 
also appeared Global Agricultural Trade and Developing Countries , ed. Aksoy and Beghin]. 
[10] March 2004 Cotton:  Market Structure, Policies, and 
Development Issues In addition to the market and policy information, it  included a section with World Bank’s activities 
on the cotton sector [presented at the Cotonou cotton workshop]. 
[11] June 2004 Cotton Futures Exchanges:  Their Past, 
their Present, and Their Future It looked at the history of cotton futures exchan ges and examined the prospects that one of the 
recently launched (or proposed) exchan ges will become successful [appeared in Quarterly Journal of 
International Agriculture ]. 
[12] June 2004 The "Cotton Problem" An updated version of the February 2004 paper with  detailed information on the "Cotton Initiative" 
and the Brazil/US WTO cotton dispute [discusse d at the FAO-sponsored cotton consultations]. 
[13] July 2004 Brazil vs US:  Cotton Subsidies and 
Implications for Development Discussed the likely implications of the WTO Disp ute Panel’s decision regarding the dispute by 
Brazil against the US cotton subsidies [appeared in World Bank’s Trade Note  series]. 
Note:  These documents will be posted soon at the World Bank’s web site.  
 WT/GC/83/Add.1 
Page 48 TABLE  2:  C OTTON -RELATED  LENDING  OPERATIONS  IN WEST CENTRAL  AFRICA:  2001-2003  
COUNTRY YEAR15 PROJECT (amount) DESCRIPTION 
Cotton-related Lending Operations  
Mali 2001 Agricultural Services and 
Producer Organization ($43.5 
million) Objectives:  (i) restore the cotton company’s financial stability so as to allow it to secure financing for the 
forthcoming crop season;  (ii) achieve efficiency gains in the cotton company through restructuring and 
divestment of non-core activities;  (iii) divest to  the private sector the cotton collection and marketing 
activities in one cotton grow ing area;  and (iv) privatize the cotton-oil company. 
Benin 2002 Cotton Sector Reform ($18 
million) Objectives:  (i) support the private sector operations and new institutions after the partial divestiture of 
the National Company for Agricultural Promotion (SONAPRA);  (ii) give technical assistance and 
advisory services in management, audit, capacity bu ilding, and agricultural services;  (iii) monitor the 
divestiture of SONARA in such a way so that social  issues and the financial needs for the government’s 
conversion program are addressed. 
PRCSs and Adjustment Operations  
Mali 2001 Third Structural Adjustment 
Credit ($70 million) The credit supported (i) recovery and restructuring of the cotton sector to restore positive economic 
growth and (ii) public expenditure reforms aimed specifically at advancing the government's poverty 
reduction objectives.  The pr oject closed in June 2004. 
Burkina Faso 2002 Second Poverty Reduction 
Support Credit It is designed to help the government achieve bette r outcomes in public resource management by (i) 
strengthening program budgets and linking allocations to  specific sector objectives, strategies, and action 
plans;  (ii) improving service delivery in education, health, and rural development;  and (iii) strengthening 
the fiduciary framework to promote accountability and tr ansparency in the use of public funds, including 
external aid. 
Chad 2003 Fourth Structural Adjustment 
Credit ($40 million) Its primary goal is to improve the livelihoods of  about 300,000 poor families by supporting the cotton-
sector reform program 
15Denotes year of approval by the World Bank’s Board of Executive Directors. 
  WT/GC/83/Add.1 
 Page 49 
 
 
 V. LIST OF PARTICIPANTS IN THE CONSULTATIVE PROCESS 
 
PARTICIPANTS Tel. E-mail 
PROPONENTS :   
Benin  
Mr. Samuel Amehou, Ambassador 
Mr. Eloi Laourou  
022 906 84 60 
022 906 84 60  
s.amehou@missionbenin.ch 
eloilaourou@yahoo.fr 
Burkina Faso  
Mr. Moussa B. Nebie   
022 734 63 30  
-- 
Mali  
Mr. Louis-Joseph Bastide, Ambassador 
Mr. Maiga Alhacoum  
022 710 09 60 
022 710 09 60  
mission.mali@bluewin.ch 
mission.mali@bluewin.ch 
Senegal  
Mr. Iba Mar Oulare  
022 918 02 36  
mission.senegal@ties.itu.int 
Uganda  
Mr. Kweronda-Ruhemba, Ambassador  
022 339 88 10  
rkweronda@hotmail.com 
BILATERAL DONORS :   
Canada  
Ms. Pam Cooper 
Ms. Adair Heuchan  
022 919 92 05 
022 919 92 93  
pamela.cooper@international.go.ca 
adair.heuchan@international.go.ca 
Denmark  
Ms. Maj Hessel 
Mr. Søren Kelstrup  
022 918 00 47 
022 918 00 40  
majhes@um.dk 
sorkel@um.dk 
European Commission  
Mr. Peter Young 
Mr. Henny Gerner  
022 918 22 
31+32 229 866 18  
pete.young@cec.eu.int 
henny.gerner@cec.eu.int 
France  
Mr. Philippe Gros  
022 544 32 00  
philippe.gros@missionecon.org 
Germany  
Ms. Ursula Holzhauser 
Mr. Oliver Hunke  
022 730 12 56 
022 730 12 79  
wto-6-io@genf.auswaertiges-amt.de 
oliver.nunke@diplo.de 
Japan  
Mr. Masato Kitera 
Mr. Kiminori Iwama 
Mr. Seisake Inoue  
022 717 31 
022 717 32 15 
11022 717 32 25  
masato.kitera@mofa.go.jp 
kiminori.iwama@mofa.go.jp 
seisake.inoue@mofa.go.jp WT/GC/83/Add.1 
Page 50  
 
  
The Netherlands
 
Mr. Ian de Jong, Ambassador  
022 748 18 04  
im.de-jong@minbuza.nl 
Norway  
Mr. Odd Mølster 
Mr. Magnar Sundfør  
-- 
+47 222 433 85  
magnar.sundfor@mfa.no 
omoe@mfa.no 
Sweden  
Ms. Frida Collste  
022 908 08 17  
frida.collste@foreign.ministry.se 
United States of America  
Ms. Linnet Deily, Ambassador 
Ms. Nancy Adams 
Ms. Katherine Ingmanson Mr. Jim Murphy Ms. Mary Revelt 
Mr. William Whelan  
022 749 5242 
022 749 53 32 
-- +1 202 395 6127 022 749 52 47 
--  
ldeily@ustr.eop.gov 
nancy_adams@ustr.eop.gov 
ingmansonk@state.gov jmurphy@ustr.eop.gov aggeneva@usda.gov 
wwhelan@usaid.gov 
MULTILATERAL AGENCIES :   
African Development Bank  
Mr. Dougou Keita   
+216 7110 2086  
d.keita@afdb.org 
DAC/OECD  
Ms. Caroline Lesser 
Ms. Josie D'Angelo  
+33 1 45 24 90 46 
+33 1 45 24 90 71  
caroline.lesser@oecd.org 
josie.dangelo@oecd.org 
FAO  
Mr. Themba N. Masuku 
Mr. Panos Konandreas  
022 917 36 83 
022 917 36 35  
tmasuku@unog.ch 
pkonandreas@unog.ch 
IMF  
Mr. Hans-Peter Lankes  
Mr. Jean-Pierre Chauffour  
-- 
022 918 03 00  
hlankes@imf.org 
jchauffour@imf.org 
ITC 
Mr. Abdelkrim Ben Fadhl 
Mr. Matthias Knappe 
Ms. Lilia Naas 
Mr. Peter F. Smit  
-- 
022 730 03 21 
-- 
022 730 02 62  
benfadhl@intracen.org 
knappe@intracen.org 
naas@intracen.org 
smit@intracen.org 
UNIDO  
Mr. Alberto Di Liscia  
022 917 33 64  
adiliscia@unido.org 
World Bank  
Mr. Carlos Braga 
Mr. Patrick Reichenmiller  
022 748 10 17 
022 748 10 13  
cbraga@worldbank.org 
preichenmiller@worldbank.org 
 
__________  