GENEVA (Reuters) - The United States is committed to a deal on cotton in the long-running Doha trade talks, but has not yet reached an agreement, the outgoing U.S. trade chief said on Wednesday.
U.S. Trade Representative Susan Schwab, who steps down on January 20 with the change of administration, said cotton would have been part of a deal if ministers had reached an outline agreement last month at the World Trade Organisation (WTO).
Cotton had been one of the most difficult issues in the Doha talks, launched in late 2001, but Schwab’s comments indicated that cotton would not be an obstacle to a broader trade deal.
WTO Director-General Pascal Lamy decided in December against calling ministers to Geneva to seek a breakthrough in the Doha talks because of big differences among major powers, but said the problem was not cotton where a deal was within reach.
“There was no settlement in cotton,” Schwab told a news briefing during a farewell visit to WTO headquarters. “What we are able to articulate was goodwill and our intention of fully meeting our commitments under the December 2005 Hong Kong ministerial declaration with respect to cotton.”
“Had there been fewer irreconcilable differences between us and a successful ministerial in December I am confident that cotton would have been part of that deal,” she added.
Developing country cotton producers want the United States to cut its politically sensitive subsidies, which have become a symbol of what they see as unfair international trade practices that squeeze their farmers out of markets.
WTO members agreed in Hong Kong in 2005 to cut subsidies on cotton faster and more deeply than supports on other agricultural goods. But that cotton deal is dependent on a broader agreement on agriculture.
Four African cotton producers — Benin, Burkina Faso, Chad and Mali — have made a proposal that would see U.S. subsidies fall 82.2 percent over about two years against a 60 percent cut over five years for U.S. farm support generally.
The United States has not made a counter-proposal.
Low prices, high production costs and falling demand because of the global economic crisis could force an increase in U.S. cotton subsidies under current programmes, although many farmers are switching to other crops.