WORLD TRADE
ORGANIZATIONWT/GC/W/511
22 August 2003
(03-4391)
General Council
25-26 August 2003Original:  French
DRAFT DECISION CONCERNING SPECIFIC MEASURES IN FAVOUR OF
COTTON WITH A VIEW TO POVERTY ALLEVIATION
Communication from Benin, Burkina Faso, Chad and Mali
The following communication, dated 21 August 2003, has been received by the Chairman of
the General Council from the Permanent Mission of Benin.
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I have the honour to submit to you in annex the Draft Decision Concerning Specific Measures
in Favour of Cotton with a View to Poverty Alleviation.
The four countries co-sponsoring the Sectoral Initiative in Favour of Cotton, Benin, Burkina
Faso, Chad and Mali, would be most grateful if this document could be circulated to Members of the
World Trade Organization, and examined by the session of the General Council scheduled for
25 August 2003.
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The Ministerial Conference,
Recalling the provisions of paragraphs 1 and 3 of Article IX of the Marrakesh Agreement
Establishing the World Trade Organization (the WTO Agreement) and the Decision-Making
Procedures Under Article IX of the WTO Agreement agreed by the General Council (WT/L/93),
On the basis of the recommendations contained in paragraphs 13 and 14 of the Ministerial
Declaration (WTO/MIN(01)/DEC/1) of the Fourth Ministerial Conference of the World Trade
Organization (WTO), held in Doha (Qatar) from 9 to 14 November 2001,
Recalling the provisions of Articles 7, 8 and 9 of the Agreement on Agriculture concerning
domestic support, competition and export subsidies, and anxious to ensure open, equitable and justmultilateral trade and to eliminate all distortions in the production and marketing of cotton, a product
for which the four co-sponsors of the Sectoral Initiative in Favour of Cotton - Benin, Burkina Faso,
Chad and Mali - have a recognized comparative advantage,
Bearing in mind that, as indicated in paragraph 2 of the Doha Ministerial Declaration,
"international trade can play a major role in the promotion of economic development and the
alleviation of poverty",
Having examined the request of the four (4) WTO Members, Benin, Burkina Faso, Chad and
Mali, that co-sponsored the Sectoral Initiative in Favour of Cotton contained in documentsTN/AG/GEN/4, TN/AG/GEN/ 6 and WT/MIN/03/W/2,
Taking account of the strategic importance of cotton for the economies of the West and
Central African Countries affected by the domestic support measures and the cotton export subsidies
granted by certain countries to their cotton producers,
Concerned at the serious consequences of the domestic support measures and export subsidies
in favour of cotton for the economies of the developing countries, and particularly the least-developed
countries (LDCs), affected by these measures, and for the social conditions of populations in the rural
cotton-producing communities in those countries,
Stressing the urgency of settling the problems faced by the countries belonging to the
LDC group as a result of the domestic support measures and the subsidies granted to cotton,
Decides as follows:
1. Elimination of domestic support and cotton export subsidies
1.1 WTO Members undertake to eliminate domestic support measures and subsidies for
the production and export of cotton over a period of three (3) years from 1 January 2004 to
31 December 2006.
This elimination shall take the form of a gradual decrease, in equal annual portions, i.e. a
yearly decrease equal to at least one third (33.3 per cent) of the total level of subsidies granted.
2. Transitional financial compensation mechanism
2.1 WTO Members decide to establish a transitional financial compensation mechanism
in favour of the cotton-exporting LDCs affected by  these subsidies, for a period of three (3) years
from 1 January 2004 to 31 December 2006.WT/GC/W/511
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2.2 Starting on 1 January 2004, and until the domestic support measures and subsidies
granted to the production and export of cotton have been totally dismantled, Members that have
granted these subsidies will be called upon to grant financial compensation equivalent to the amount
of the loss in export revenue suffered by the LDCs affected by these subsidies, in conformity with
paragraphs 2.3, 2.4, 2.5 and 2.6 of this Decision.
2.3 The annual amount of compensation to be paid shall correspond to the estimated
losses suffered, calculated on the basis of the statistics supplied by the International Cotton Advisory
Committee (ICAC) for the cotton seasons 1999/2000, 2000/2001 and 2001/2002.
2.4 The amount of the overall financial compensation to be paid shall be adjusted in
proportion to the subsidy reduction efforts of the countries contributing to the compensation fund.
2.5 To that end, a compensation fund shall be created under the authority of a body to be
determined, with responsibility for collecting and distributing the overall financial compensation
mentioned in paragraph 2.4.  The contributing countries shall be identified in accordance with the
provisions of paragraphs 1.1, 2.2, 2.3 and 2.4 of this Decision.
2.6 The compensation granted to the LDCs shall be calculated in proportion to their
respective shares in the production and export of cotton as communicated by the ICAC.
2.7 At the national level, the management of financial compensations shall be the joint
responsibility of the producers' associations in the countries affected and the competent national
structures, under the supervision of institutions to be determined.
3. Management and control of the elimination of subsidies and of financial
compensation
3.1 Members undertake to create, by 15 October 2003 at the latest, a mechanism for the
control and elimination of domestic support measures and export subsidies in favour of cotton, which
shall be operated by a committee set up to monitor the implementation of the above measures under
the supervision of the WTO Committee on Agriculture (Special Session).  This committee shall
submit a progress report each year to the WTO General Council and the Ministerial Conference on the
implementation of this Decision, and shall propose, where necessary, appropriate corrective measures.
3.2 WTO Members shall be regularly informed of the implementation of this Decision
through notifications submitted by the countries contributing to and benefitting from the
compensation fund in connection with the work of the Special Session of the Committee on
Agriculture.
Cancun, … September 2003
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