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October 17, 2009

US, EU cotton-subsidy cut is only a matter of time, WTO says

by Sarah McGregor

The U.S. and European Union are likely to eventually meet African cotton producers’ demands to scale back farmer subsidies, World Trade Organization Director General Pascal Lamy said.

The U.S. and EU have committed in the Doha round of global trade negotiations to reducing levels of subsidies by 70 percent to 80 percent and to making deeper and faster cuts in programs for cotton, Lamy said today in an interview in Tanzania’s commercial capital of Dar es Salaam. The only missing item is a precise figure, he said.

Representatives of poor countries attending a meeting in Dar es Salaam on strategy for the Doha talks called on WTO member nations to allow duty-free and quota-free access for cotton and its byproducts. About 15 million farmers grow cotton in the sub-Sahara region of Africa, the world’s poorest continent, Lamy said.

“There will be no conclusion of this round without the U.S. and EU reducing cotton trade-distorting subsidies more ambitiously and more specifically” than their pledges on other products, Lamy said. “That’s already decided. What is not decided is exactly how much.”

The Doha development round of trade talks, which began in 2001, is aimed at lowering barriers to poor nations’ exports to help economies grow. The talks have been subject to delays, breaking down in July 2008 in a dispute between the U.S. and India over farm tariffs and resuming in September.

A ministerial-level WTO conference is scheduled for Geneva in late November aimed at evaluating progress on the Doha round. Lamy said yesterday that governments need to work harder to meet a treaty-signing deadline of 2010.

A resolution of U.S. cotton-subsidy policy is part of a broader agriculture program and “we’re nearly there,” Lamy said. “It’s a matter of weeks or months.”

Bloomberg

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