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July 30, 2008

Burkina Faso fears 'collapse' of its cotton industry after failure of WTO talks

Cotton growers in Burkina Faso will suffer from the failure of world powers to conclude a global trade pact, its trade minister said July 30, highlighting broad concern over the impact of the breakdown on the developing world.

"We can hardly control our anger," said Burkina Faso's Trade Minister Mamadou Sanou the morning after July 29th's dramatic collapse of ministerial talks at WTO headquarters.

He warned that his country's cotton industry -- which accounts for over half its export earnings -- faced "extinction."

"They wanted me to be here to negotiate on cotton. I have been here for 10 days and I haven't been able to discuss cotton," he told a news conference. "There is a risk that the whole system will collapse in our country."

The Doha Round, launched in the Qatari capital in 2001, aimed to help poor countries around the world by using trade to boost economic development. With the collapse of the negotiations, countries such as Burkina Faso now face an even longer wait for help for their farming industries.

"We are most disappointed that the rich countries, the champions of liberalisation who urge us to liberalise our trade and our economies... are afraid to trade with us on an equal footing," Sanou said.

Sanou is the coordinator for the C4 group of West African cotton-producers, which since 2003 has been fighting for the cotton issue to be included in the Doha Round.

The group -- Benin, Burkina Faso, Chad and Mali -- wants industrialised countries, particularly the United States, to lower domestic subsidies that African nations say depress world cotton prices at poorer countries' expense.

Some diplomats accused the United States of tactically avoiding the issue.

"The US cannot afford to give way on cotton, so it does not even want to go into the issue," one Asian diplomat said.

"It knows that India would not give ground on SSMs, in which case India would be blamed in case of any collapse."SSMs, or special safeguard mechanisms, are a measure to protect farmers in case of an import surge. India and the United States were unable to agree on the question, triggering the failure of negotiations here.

On July 28 China -- a major buyer of US cotton -- waded into the row, saying it had heard "absurd arguments" that the United States would cut its subsidies on cotton only if China and other developing countries cut their cotton tariffs.

Senior Chinese official Zhang Xiangchen said the United States was "not in a position to discuss" tariff cuts with developing members until it eliminated its own subsidies.

"The extremely high cotton subsidies by the US have caused serious damage to cotton farmers in developing countries, including those in Africa and 150 million ones in China," said Zhang.

At a news conference on July 29, US Trade Representative Susan Schwab said the US "remained committed to working" with the C4 group to address cotton concerns.


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