Committee on Agriculture - Special session - Sub-Committee on Cotton - Cotton - Background paper by the Secretariat - Revision

COTTON

Background paper by the Secretariat[1]

Revision

The main updates captured in this revised version compared to the previous one[2] are as follows:

·_      Section 2 – DOMESTIC SUPPORT:

oUpdated tables for the Israel, European Union (EU), Peru, and Russian Federation, and respective charts in Section 2.1.1. Product‑specific AMS notified for cotton;

oUpdated Table on Overview of cotton product‑specific support, current total AMS and value of production for cotton; and

oUpdated table for the European Union (EU) and respective charts in Section 2.1.2. Direct Payments in Accordance with Article 6.5.

·_      Section 3 MARKET ACCESS:

oUpdated Table 3.3 showing Cotton, share of world exports (2012-2022), in percentage, for the 33 Members identified in paragraphs 12 and 13 of this paper;

oIn Section 3.1 Tariffs, updated individual tariff tables for the following Members: – Bahrain, Kingdom of; Colombia; European Union; Hong Kong, China; India; Kenya; Malaysia; Morocco; New Zealand; Pakistan; South Africa; Türkiye; United Kingdom; United States, and Viet Nam;

·_      Section 3.4 – OTHER NON-TARIFF MEASURES: The following measures initiated/notified since the last revision of the background paper are added in this revision – one global standard and phytosanitary measure by South Africa, one global technical barrier to trade measure by Kenya and three global import licensing procedure measures by Brazil, Mauritius, and Mexico, respectively.

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1.   The Ministerial Decision on Cotton of 7 December 2013 (document _WT/MIN(13)/41-_WT/L/916) adopted by Ministers at the 9th WTO Ministerial Conference in Bali states, inter alia that:

"5. In this context, we therefore undertake to enhance transparency and monitoring in relation to the trade‑related aspects of cotton. To this end, we agree to hold a dedicated discussion on a bi‑annual basis in the context of the Committee on Agriculture in Special Session to examine relevant trade‑related developments across the three pillars of Market Access, Domestic Support and Export Competition in relation to cotton.

6. The dedicated discussions shall be undertaken on the basis of factual information and data compiled by the WTO Secretariat from Members' notifications, complemented, as appropriate, by relevant information provided by Members to the WTO Secretariat.

7. The dedicated discussions shall in particular consider all forms of export subsidies for cotton and all export measures with equivalent effect, domestic support for cotton and tariff measures and non‑tariff measures applied to cotton exports from LDCs in markets of interest to them."

2.   As a result, four Dedicated Discussions on Cotton were held in 2014 and 2015.[3]

3.   The Ministerial Decision on Cotton of 19 December 2015 (document _WT/MIN(15)/46-_WT/L/981) adopted by Ministers at the 10th WTO Ministerial Conference in Nairobi states, inter alia that:

"14. We undertake to continue holding Dedicated Discussions on Cotton on a bi‑annual basis, as indicated in paragraphs 5, 6 and 7 of the Bali Ministerial Decision on Cotton (_WT/MIN(13)/41-WT/L/916), including in particular to examine relevant trade‑related developments across the three pillars of Market Access, Domestic Support, and Export Competition in relation to cotton.

15. We undertake to regularly monitor the implementation by Members of paragraphs 2 to 4 during these Dedicated Discussions on Cotton, based on relevant Members' notifications to the WTO, complemented as necessary by Members' replies to specific requests for information from the WTO Secretariat."

4.   The Nairobi Ministerial Decision on Cotton also states that:

"6. The Dedicated Discussions on Cotton referred to in paragraph 14 of this Decision shall continue to address the following specific elements, based on factual information and data compiled by the WTO Secretariat from Members' notifications, complemented, as appropriate, by relevant information provided by Members to the WTO Secretariat:

(a)     identification and examination of market access barriers, including tariff and non‑tariff barriers for the entry of cotton produced and exported by cotton‑producing LDCs;

(b)     reviews of market access improvements and of any market access measures undertaken by Members, including the identification of access barriers to cotton produced and exported by cotton‑producing LDCs in markets of interest to them; and

(c)     examination of possible additional measures for progressive and predictable improvements in market access, in particular the elimination of tariff and non‑tariff barriers to cotton produced and exported by cotton‑producing LDCs."

5.   Since the Nairobi Ministerial Conference, 16 Dedicated Discussions of the relevant trade‑related developments for cotton have taken place.[4]

6.   As requested by the Nairobi Ministerial Decision and based on the approach resulting from the Bali Ministerial Decision, the WTO Secretariat has prepared, in advance of the 21st Dedicated Discussion on Cotton, a revised compilation of factual information and data available from Members' notifications and other submissions, on Market Access, Domestic Support and Export Competition in relation to cotton, received up to 28 March 2024.


 

7.   Further to Members' requests at the second dedicated discussion, this revised background paper also includes: (i) Members' responses to the questionnaire on cotton policy developments circulated on 30 January 2024; and (ii) relevant information on cotton markets and policies from Trade Policy Review reports circulated up to 28 March 2024, for the 33 Members identified in paragraphs 12 and 13 of this paper.[5]

8.   The paper is organized in three parts, namely:

·_        Export Subsidies[6];

·_        Domestic Support; and

·_        Market Access.

9.   The factual information and data contained in this paper have been compiled from:

·_        Members' schedules and notifications in the Market Access (MA), Domestic Support (DS) and Export Subsidies (ES) series under the Committee on Agriculture;

·_        Tariff data available in the WTO Integrated Database (IDB) and Consolidated Tariff Schedules Database (CTS); as well as

·_        Non‑tariff measures available in the WTO Integrated Trade Intelligence Portal (I‑TIP) Goods Database.

10.   The specific sources of information for each of the areas covered are described under the relevant parts of the paper.

11.   With regards to Export Subsidies and Domestic Support (Part one and two of the paper), factual information and data were collected for all WTO Members with relevant commitments or who have reported measures benefitting cotton in their relevant notifications.

12.   With regards to Market Access (Part three of the paper), and based on previous practice, the list of markets of interest to LDCs was established by collecting market access data for WTO Members that are either: (i) classified as developed economies for the purpose of the WTO Secretariat note on the "Participation of Developing Economies in the Global Trading System"[7]; (ii) amongst the top 20 cotton importing countries in quantity for the period 2010‑2012; or (iii) amongst the top 20 cotton importing countries in quantity from LDCs for the period 2010‑2012.[8]

13.   As a result, market access data are provided, in accordance with the Bali and Nairobi Ministerial Decisions on Cotton, for the following 33 Members:[9] Australia; Bahrain, Kingdom of; Bangladesh; Brazil; Canada; China; Colombia; Egypt; the European Union; Hong Kong, China; Iceland; India; Indonesia; Japan; Kenya; Korea, Republic of; Malaysia; Mauritius; Mexico; Morocco; New Zealand; Norway; Pakistan; Peru; Russian Federation; South Africa; Switzerland; Chinese Taipei; Thailand; Türkiye; the United Kingdom; the United States and Viet Nam.

14.   Unless otherwise indicated, the term "cotton" in this paper refers to the products covered by the Harmonized System nomenclature (HS) headings 52.01, 52.02 and 52.03.

15.   The Annexes to this document, including Members' replies to the questionnaire on cotton‑related policy developments (Annex 4) and information on cotton markets and policies from the trade policy review mechanism (Annex 5), are contained in addendum _TN/AG/GEN/34/Rev.20/Add.1-_TN/AG/SCC/GEN/13/Rev.20/Add.1. Information on market access data for relevant cotton-related products is contained in addendum _TN/AG/GEN/34/Rev.20/Add.2-_TN/AG/SCC/GEN/13/Rev.20/Add.2.

TABLE OF CONTENTS

1   EXPORT SUBSIDIES. 5

1.1   Export Subsidy Commitments. 6

1.2   Notified Export Subsidies. 6

1.2.1   Notified budgetary outlays and quantities for cotton (Table ES:1) 6

1.2.2   Notified budgetary outlays and quantities for cotton (Supporting Table ES:2) 6

2   DOMESTIC SUPPORT. 7

2.1   Product Specific Aggregate Measurement Of Support 8

2.1.1   Product‑specific AMS notified for cotton. 9

2.1.2   Direct Payments in Accordance with Article 6.5. 23

3   MARKET ACCESS. 25

3.1   Tariffs. 30

3.2   Special Safeguard Provisions. 43

3.2.1   Scheduled SSG provisions for cotton. 43

3.2.2   Notified trigger prices for cotton. 43

3.2.3   Invoked price‑based SSG for cotton. 44

3.3   Tariff Rate Quotas. 44

3.3.1   Tariff rate quota commitments for cotton. 44

3.3.2   Most recent Tariff Rate Quota administration method notified for cotton. 46

3.3.3   TRQ quantities and in‑quota imports for cotton. 48

3.4   Other Non-Tariff Measures. 56

TABLE OF CHARTS

Chart 1.1: India. 7

Chart 2.1: Argentina. 15

Chart 2.2: Brazil 15

Chart 2.3: China. 16

Chart 2.4: Colombia. 16

Chart 2.5: European Union. 17

Chart 2.6: India. 17

Chart 2.7: Israel 18

Chart 2.8: Kazakhstan. 18

Chart 2.9: Mexico. 19

Chart 2.10: Peru. 19

Chart 2.11: Russian Federation. 20

Chart 2.12: South Africa. 20

Chart 2.13: Türkiye. 21

Chart 2.14: United States. 21

Chart 2.15: Viet Nam.. 22

Chart 2.16: China. 24

Chart 2.17: European Union. 24

Chart 2.18: United States. 25

Chart 3.1: Total imports of cotton from World and LDCs, 2012‑2022, value. 25

Chart 3.2: Total imports of cotton from World and LDCs, 2012‑2022, quantity. 26

Chart 3.3: Number of scheduled TRQs for cotton by Member 46

Chart 3.4: China (CHNQ010) 52

Chart 3.5: Colombia (COLQ057 and COLQ067) 52

Chart 3.6: South Africa (ZAFQ053) 53

Chart 3.7: United States (USAQ049) 53

Chart 3.8: United States (USAQ050) 54

Chart 3.9: United States (USAQ051) 54

Chart 3.10: United States (USAQ052) 55

Chart 3.11: United States (USAQ053) 55

Chart 3.12: United States (USAQ054) 56



[1] This document has been prepared under the Secretariat's own responsibility and is without prejudice to the positions of Members or to their rights and obligations under the WTO. It has been prepared for information only and is not intended to provide any authoritative or official legal interpretation of the provisions of the WTO Agreements in general or in relation to any measure listed in this document.

[2] _TN/AG/GEN/34/Rev.19‑TN/AG/SCC/GEN/13/Rev.19.

[3] June and November 2014, and July and November 2015.

[4] July and November 2016, July and November 2017, June and November 2018, June and November 2019, July and November 2020, May and November 2021, May and November 2022, and May 2023 and November 2023.

[5] This information is presented in Annexes 4 and 5.

[6] With regards to the disciplines and commitments contained in the Ministerial Decision on Export Competition (_WT/MIN(15)/45-_WT/L/980 adopted on 19 December 2015), referred to in paragraph 9 of the Nairobi Ministerial Decision on Cotton, Members can also refer to the Secretariat background paper on export subsidies, export credits and export credit guarantees or insurance programmes, international food aid, and agricultural exporting STEs (document _G/AG/W/125/Rev.19 and its four addenda, dated 26 July 2023).

[7] Document _WT/COMTD/W/262, Appendix 8 with the European Union counted as one and Switzerland and Liechtenstein also counted as one.

[8] The top 20 cotton importing countries were identified using COMTRADE data processed by the WTO Secretariat, and supplemented by data from the International Cotton Advisory Committee (ICAC).

[9] In the absence of significant change in the list of Members when using the period 2020‑2022, the list used in document _TN/AG/GEN/34 has been kept unchanged for the sake of comparability. The United Kingdom withdrew from the European Union as of 1 February 2020. The European Union and the United Kingdom have communicated that, during the transition period, which ended on 31 December 2020, Union law, with a few limited exceptions, continued to be applicable to and in the United Kingdom. For the period until 31 December 2020, the European Union's data also covers the United Kingdom. For the period starting on 1 January 2021, information concerning the European Union covers its current 27 member States and the United Kingdom is treated separately.