WASHINGTON – U.S. Trade Representative Susan C. Schwab and other senior Administration officials today met with their counterparts from Benin, Burkina-Faso, Chad, and Mali to discuss a range of trade-related issues.
The officials discussed the importance of restarting the stalled World Trade Organization Doha Development Agenda negotiations, the important contributions a successful agreement will make to economic development, and issues related to cotton trade.
“The talks provided a chance to discuss how trade liberalization is the best way to achieve the development goals of the Doha Round,” said Ambassador Schwab. “The United States remains fully committed to a comprehensive, multilateral agreement. We look forward to continuing to work with our trading partners from these four countries on an agreement that will increase trade flows, create new economic opportunities and alleviate poverty throughout the world.”
The WTO talks were suspended in July, due largely to failure to establish formulas for cutting agriculture tariffs and opening markets to increased trade flows. The United States offered a comprehensive proposal to cut tariffs as well as trade-distorting domestic support over a year ago and continues to engage WTO members for improved agricultural market access offers. In the agricultural area, the World Bank has concluded that improved market access in agriculture could account for nearly all the potential welfare gains for developing countries.
Through its Millennium Challenge Corporation, the United States supports the programs designed by the governments of Benin and Mali that are aimed at reducing poverty through growth and looks forward to receiving Burkina Faso's proposal. Benin’s five-year $307 million Compact, signed in February 2006, seeks to increase investment and private sector activity by improving land tenure, access to financial services, improving the judicial system, and removal of constraints to trade at the Port of Cotonou. The government of Mali has developed a $461 million proposal that aims to reduce poverty through economic growth by increasing production and productivity of agriculture and small- and medium-sized enterprises as well as expanding Mali’s access to markets and trade (additional details below). The proposals reflect the countries’ priorities and neither of the proposals includes investments specifically for the cotton sector, although the improvements to the Port of Cotonou will help cotton exporters.
In addition, the United States has provided over $27 million in technical assistance to West African cotton producers that would better enable them to take advantage of current trade opportunities and benefit even further from a multilateral agreement. The assistance is aimed at introducing new technologies and modern marketing tools, as well as promoting the development of infrastructure and institutions that will help African farmers to become more competitive with producers in Brazil, China, India and elsewhere.
“We fully support the efforts of these countries to diversify their agricultural production, including into higher-value products. We applaud them in their choice of programs for the MCC in recognizing the key to their economic success lies in diversifying out of cotton,” said Schwab. “We believe a multilateral agreement to open markets, coupled with technical assistance, will provide concrete benefits for African cotton producers and directly address their biggest problems.”
In addition to playing a leading role in efforts to conclude a comprehensive Doha Round agreement, the United States has also taken steps to eliminate trade-distorting export subsidies. In August, the United States repealed the Step 2 program, terminating annual payments in the hundreds of millions of dollars to users and exporters of U.S. cotton.
Repeal of the Step 2 program is consistent with the development goals of the Doha Round, which calls for developed countries to eliminate all forms of export subsidies for cotton in 2006. It responds to concerns raised by African and other trading partners and fulfills commitments made at the Hong Kong Ministerial in December 2005.
With regard to MCC activities, through its own consultative process, Benin identified a poor investment climate and the need for more dynamic private sector activity as the country's key obstacles to sustainable poverty reduction and economic growth. The compact address four areas: 1) the Land Project aims to secure property rights for the poor; 2) the Financial Services Project is designed to assist micro, small and medium-sized enterprises; 3) the Justice Project aims to create a better environment for business and investment in Benin by improving the ability of the judicial system to resolve claims, and is expected to finance the construction new court houses, train court personnel, and establish an arbitration center to resolve business disputes; and 4) the final project is designed to promote access to markets and improve operations at the Port of Cotonou, reducing delays and increasing the volume of imports and exports through the Port. Over 100 local civil society organizations participated in electing their own representatives to the Benin’s Executive Board of the working group that designed Benin's Compact proposal. This cooperation will continue during implementation through steering committees composed of members of civil society, and other sectors of society, who will advise on the implementation of each Project.
Mali’s proposal includes: 1) an airport improvement project which aims to remove bottlenecks that prevent the growth of passenger and cargo traffic at the 1947-era Bamako Airport, the primary port in this landlocked country; 2) an industrial park project adjacent to Bamako Airport, intended to be an anchor for the growing industry sector in Mali, alleviating a key constraint to value-added production and economic growth; and 3) an infrastructure development and policy reforms for productive sectors in the Niger River Delta. The project includes a three-fold increase in usable agricultural land in the Delta through irrigation. Rice is the primary beneficiary group, but also some fruit and vegetable crops will also benefit.
For more details, go to www.mcc.gov