China Refuses To Open Cotton Market To The United States, Doha Negotiations Return To Deadlock

The small Ministerial Conference of the Doha round, which had already dawned at the end of last week, returned to deadlock in Geneva time July 28th, when the United States provoked a row between developed and developing countries.

Prior to this, after 7 days of negotiations, members have basically agreed to start negotiations on the core issues of agriculture and non-agricultural issues on the basis of a new compromise document proposed by WTO director general Lamy. Lamy called the document Package of Elements, which is the basis for this Ministerial Conference to reach a consensus.

In July 28th, the US delegation suddenly made a public attack on members such as China and India.

At the core of the G7 (the 7 most important negotiators, the United States, the European Union, Japan, Australia, China, India and Brazil), Schwab, the head of the US delegation and trade representative, said that the proposal of some developing countries to reject Lamy's "factor package" would hinder the Doha round negotiations.

The deputy head of the US delegation, David Shark, told the 153 member states of WTO that India refused to accept the proposal of factor package, while China's commitment was not enough, which would threaten the 7 year Doha round process.

China responded immediately.

Chen Deming, head of the Chinese delegation and Minister of Commerce, said that the members of the developed countries are the biggest beneficiaries of the current round of negotiations. The key to the serious difficulties in the Doha negotiations is that the United States is asking for a big price after its own interests are safeguarded.

After the United States publicly denounced China and India, the Geneva talks were tense.

The G7 meeting lasted until late at night and will continue in July 29th.

At present, the dispute between China and the United States is mainly focused on sensitivity.

Tariff reductions, industrial sector liberalization and cotton.

In terms of agricultural products, the alliance of developing countries such as China and India strongly calls for the establishment of SP and special safeguard mechanism (SSM).

In this way, when these countries feel that their strategic agricultural products are threatened by imports, they can impose tariffs on imported products to ensure their own food security and farmers' interests.

When China joined the WTO, China was forced to make a commitment to abandon its right to use special safeguard mechanism for its agricultural products.

According to Lamy's "factor package" proposal, in the case of special safeguard mechanism, only when the import volume surges by more than 40%, the developing countries can impose 15% of the maximum tariff.

At the same time, the special safeguard mechanism can only be used annually for agricultural products which account for 2.5% of the total tariff rate.

However, G33 group, a special group of products and special safeguard mechanism coordination group of developing countries, including China, India, Indonesia and other major developing grain importing countries, said that the proposal could not be accepted. The number of agricultural products allowed to protect was too small, the threshold for adopting special safeguard mechanism was too high, and the tariff quota that could be added was too low.

At present, more than half of the WTO members are developing members, including G33, African Group and ACP (Africa Caribbean).

Regions, SVE (small vulnerable economies) and LDCs (least developed countries) have proposed new proposals: for products that account for 7% of tariff duties, large developing countries will be allowed to impose 30% tariffs when the import volume is increased by 10%.

For LDCs and SVE countries, they are allowed to increase the range of protected agricultural products and increase the amount of tariff added.

In July 28th, David Shark said that China is trying to cut cotton, sugar, rice and other commodities beyond the scope of tariff reductions.

In a meeting with several African Ministers, Schwab said that unless other countries, especially China, reduce cotton tariffs, the United States will not cut cotton subsidies in accordance with the requirements of African countries.

Chen Deming said that members of developed countries should fully understand the core concerns of developing countries and should not set obstacles to the solution of these problems.

Feng Huilan, Indonesia's trade minister, said G33 was "very disappointed" with the United States publicly denouncing China and India. She said it was not constructive and harmful.

A Chinese official told our reporter that according to the "factor package" plan, the United States has been the biggest beneficiary of the current round of negotiations. Although Lamy asked for the US agricultural subsidy ceiling to be reduced to 14 billion 500 million dollars, the actual US annual agricultural subsidy expenditure is only 7 billion -90 billion yuan, so such a concession has no real impact on the United States.

At the same time, according to the Lamy plan, the United States can also designate 4% of its agricultural products tax items as sensitive products.

It is precisely because the United States provides substantial subsidies to agricultural products that these agricultural products will impact the market of developing countries.

At the same time, China has explicitly rejected the US's request to open the cotton market to China.

Zhang Xiangchen, Secretary General of the Chinese delegation, said in Geneva that cotton subsidies in the United States were illegal. The United States must first cut subsidies to discuss the issue of tariff reductions with developing countries.

In 2002, Brazil sued the WTO dispute settlement body for the US cotton subsidy violation of the WTO rules and the US commitment. However, although WTO ruled in 2005 that the US subsidy distorted the global cotton price, the US has not made any changes to the law and has continued to provide subsidies.

The United States subsidized cotton annually at around us $4 billion, which exceeds the gross national income of almost all the West African and Central African cotton producing countries.