IP/04/847
Bruxelles, 2 July 2004
Cotton: EU-Africa Forum supporting African Cotton
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outline
roadmap
The EU-Africa cotton Forum taking place on 5-6 July in Paris will seek to define a roadmap with measures in support of African cotton producing countries. The event is organised by the European Commission, in cooperation with the French Government, the Centre Technique de Coopération Agricole et Rurale (CTA) and the Africa Caribbean and Pacific (ACP) Group on cotton. The conference will build on the EU Action Plan for the cotton sector in Africa of April 2004. EU Trade Commissioner Pascal Lamy said:”The EU-ACP partnership offers a valuable forum to define common responses in favour of cotton producing countries. We have a chance to ensure fair trading conditions for cotton in the on-going WTO talks under the Doha Development Agenda by reaching substantial progress in late July. But trade alone is not enough: we must also ensure support the competitiveness of the sector and reduce vulnerability.” On 27 April EU Member States endorsed an EU-Africa Cotton Partnership prepared by the European Commission. Building on this, the Forum aims at producing a roadmap with implementing actions. Dialogue among all stakeholders and design of national and regional development strategies will be key to providing a comprehensive response. Discussions will centre around: - Obtaining fairer trade conditions on international cotton markets: the EU supports the calls from the four African cotton producers (Benin, Burkina Faso, Mali and Chad) to pursue a reduction in trade-distorting subsidies, a better market access and the elimination of all forms of export subsidies in this sector in the on-going WTO negotiations under the Doha Development Agenda; - Support African cotton producing countries in implementing comprehensive plans for the development of their cotton sectors: developing inter-professional and public-private cooperation, , promoting responsiveness to evolutions of markets and technologies; boosting quality recognition; developing mechanism to mitigate price risks; as well as ways to develop the processing of cotton into textiles and clothing.. Among the 200 participants at the Conference are EU Trade Commissioner Pascal Lamy, Ms Agnes Van Ardenne, Dutch Minister for Development, Mr Fatiou Akplogan, Minister for Trade and Industry of Benin and spokesman of the ACPCotton Ministerial Comittee and Mr Carl Greenidge, Director of the CTA. All stakeholders concerned, ie. 25 cotton producing African countries (including public sector, cotton companies and farmers), regional organisations from Africa, research institutions, NGOs and international institutions such as the World Bank will contribute to the discussion.
Background
The recent fall in world cotton prices has had a serious impact in several West and Central African countries, where cotton is the main source of income for a large population, estimated at about 10 million people. In some of the less developed countries cotton represents the main cash crop and the largest source of export receipts and government revenues. For instance, cotton represented 79% of Mali’s exports, 65% of Benin’s and 56% of Chad’s in period 1999-2000. What is the EU’s role in the cotton market? The impact of the EU on world cotton prices is minor for the following reasons: The EU market is wide open to cotton imports, including textiles and clothing: the EU applies a zero tariff on cotton imports from ACPs as well as from the world’s 49 poorest countries (LDCs). The EU is the world largest importer of cotton. Between 20% and 80% of cotton exports from Mali, Benin, Burkina Faso and Chad reach the EU. The EU is a price-taker and not a price-maker: Since the EU is not a net exporter of cotton, but the largest importer of cotton world wide, it has little, if any, influence on world prices. EU production represents about 2% of world production, while EU exports only account for 4% of world cotton exports. The EU is a net cotton importer EU does not have export subsidies for cotton. EU domestic subsidies for European cotton growers are subject to a production ceiling: when the quantity is exceeded, the amount of the support is decreased. The support provided by the EU is mostly destined for small cotton growers in rural areas in Greece and Spain.
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On 20th April 2004, EU farm ministers agreed to profoundly reform the EU's internal cotton support regime. It was decided to make the EU cotton sector more market and environment oriented and trade-friendly by eliminating the most-trade distorting production linked support. 65% of the EU's support will be decoupled from production and the remaining 35% are maintained as a per hectare payment. Where will the Forum take place? Centre de Conférences Internationales, 19 Avenue Kleber, Paris For more information http://www.cotton-forum.org http://europa.eu.int/comm/trade/issues/global/development/index_en.htm
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