The EU supports a solution to the cotton crisis

Speaking in Cancun on September 8th 2003, 'World Cotton Day', EU Trade Commissioner Pascal Lamy subscribed to the view that 'the cotton problem should be an important part of the overall negotiations' and that 'trade-distorting subsidies should and will be reduced'. However, the European commission takes the view that 'the significant decline of cotton prices in recent years has clearly been demand driven', with cotton's share of world fibre production falling from 65% in the 1960s to just over 40% today. He acknowledged that further reductions in trade-distorting support would contribute to some improvement in world market prices, for cotton as well as for other commodities. The Commission's proposed response to the cotton crisis is that: all developed economies should grant full duty-free access for all originating exports from least developed countries; export subsidies and other forms of support on those products of interest to developing countries should be eliminated; trade-distorting forms of domestic agricultural support should be halved. Comment: The European Commission can afford to support the African position on cotton since the EU is a net importer, it has no export subsidies for cotton and no border protection. However, the EU is worried about the wider implications of the west and central African proposals for compensation to be paid in relation to the income losses suffered by cotton producers. These concerns will place limits on the type of remedies that the EU is willing to support. Hence European Commission proposals in response to the cotton crisis are limited to the proposals that the Commission has already made or implemented in the areas of market access, export subsidies and the reduction of trade-distorting forms of domestic agricultural support. The European Commission is thus arguing for the importance of the cotton issue as a vehicle for pursuing its own policy agenda, as opposed to the kind of measures west and central African governments were putting forward.Speaking in Cancun on September 8th 2003, 'World Cotton Day', EU Trade..