MASERU LDC MINISTERIAL: COTTON-4 PUSH FOR SPECIFIC U.S.

UNCLAS SECTION 01 OF 02 MASERU 000081

SIPDIS

SENSITIVE
SIPDIS

DEPT ALSO FOR AF/EPS, AF/S;
PASS TO USTR

E.O. 12958: N/A
TAGS: ETRD ECIN ECON BEXP BTIO LT
SUBJECT: MASERU LDC MINISTERIAL: COTTON-4 PUSH FOR SPECIFIC U.S.
PROPOSAL


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1. (SBU) SUMMARY: Delegates representing the "Cotton Four"
(C-4) block of African cotton-producing nations (Mali, Benin,
Chad, and Burkina Faso) expressed frustration with the slow pace
of the WTO Doha negotiations during a February 28 meeting in
Lesotho with Deputy USTR Ambassador Allgeier and AUSTR Liser.
The meeting was held on the margins of the February 27-29 Least
Developed Countries (LDC) Trade Ministerial Meeting in Maseru.
The two sides agreed that, in accordance with the December 2005
Hong Kong Agreement, cuts in cotton-related domestic support
should take place more quickly and deeply than cuts for other
farm products. The C-4, however, voiced in particular by Chad,
expressed hope that the U.S. would expedite the negotiations on
cotton by tabling a specific proposal on how to deal with
cotton. The C-4 listened but did not comment on the stated U.S.
position that domestic support reductions for cotton could only
be determined after the general formula for overall farm support
cuts was determined. After emphasizing their preference for a
2-1 ratio on blue box reductions (instead of the 1-1 ratio),the
C-4 delegates stressed the importance of moving quickly on
cotton and finding a mechanism to provide compensation for their
local producers. End Summary.


2. (U) Deputy USTR Ambassador Peter Allgeier met with
representatives of African cotton producing countries on
February 28 on the margins of a February 27-29 Least Developed
Countries Trade Ministerial Meeting in Maseru, Lesotho.
Attendees at the USTR meeting with the Cotton Four included:

U.S.
--D/USTR Ambassador Peter Allgeier
--AUSTR Florie Liser
--U.S. Embassy Maseru Charge d'affaires W. Patrick Murphy
--Embassy Maseru Econoff Kit Redmer (notetaker)

Burkina Faso
--Seriba Ouattara, Ambassador, Permanent Mission to the WTO
--Ambroise Balima, Economic Counselor, Permanent Mission to the
WTO

Benin
--Ernestine Attanasso, Director General, Commerce Ministry
--Midiohouan Oswald, Auditor, Commerce Ministry

Chad
--Mahamat Adoudou Allazam, Director of Cooperative Action,
Commerce Ministry

Mali
--Demba Kida, Economic Counselor, Commerce Ministry

End summary.

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U.S. Position Clarified
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3. (SBU) While underscoring the importance of cotton tariff
reduction/elimination (and that it would be treated
specifically, ambitiously, and expeditiously as per a 2004 WTO
agreement),D/USTR Allgeier conveyed that all domestic support
cuts should be included in a comprehensive general schedule,
stating that the U.S. would abide by 2004 and Hong Kong
commitments to faster and deeper implementation of cuts in
cotton domestic supports than the overall formula for
agriculture once agreed. D/USTR Allgeier acknowledged that C-4
proposed cuts are the only ones reflected to date in Chairman's
paper, but noted the United States would not be in a position to
make a cotton-specific proposal absent agreement on an overall
formula for domestic support cuts. D/USTR Allgeier summarized
the U.S. position by emphasizing that the U.S. is committed to
cut domestic supports for cotton faster and deeper than under
the to-be-agreed general formula. D/USTR Allgeier also
highlighted that sometimes deeper cuts can be implemented over
longer periods of time.

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"A Critical Stage"
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4. (SBU) Reaffirming the Cotton Four's support for the Hong
Kong Agreement, Ambassador Ouattara (Burkina Faso) declared that
the issue is at a "critical stage." Ouattara contended that the
Cotton Four proposal - to which each of the four nations were
fully committed - was not just a strong proposal but also one
that properly dealt with thorny issues such as the page 43
ratio, arguing for a 2-1 instead of a 1-1 ratio. Counselor
Balima (Burkina Faso) followed Ouattara by highlighting the

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importance of getting proper compensation for their cotton
producers.


5. (SBU) Responding specifically to Ouattara's proposal to
modify the 1-1 ratio to a 2-1 ratio, Ambassador Allgeier
questioned the logic of a more aggressive (2-1) formula on the
less trade-distorting blue box subsidies than on amber box.
This did not elicit a response from the Cotton Four
representatives.

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Lack of Specific U.S. Proposal Elicits Frustration
-------------- --------------


6. (SBU) Chadian Trade Ministry representative Mahamat Allazam
- speaking on behalf of the Cotton Four - conveyed a strong hope
that their position would be supplemented by a concrete U.S.
proposal. Allazam also expressed concern for local growers,
arguing that "our farmers need this cut." Seeming to exude
frustration with the slow pace of negotiations, Allazam
expressed a desire to "have something (from the U.S.) to take
back to our ministers." He also noted that they are waiting for
an EU proposal.


7. (SBU) Ambassador Allgeier responded to Allazam's concerns by
restating the U.S. commitment to cut domestic support for cotton
by building on the general formula, rather than an isolated
proposal. He noted that this would allow a more politically
feasible approach that would balance gains in some sectors
against those proposed for cotton. The point that this approach
would be more politically feasible seemed to resonate among the
Cotton Four representatives, who concluded by assuring that the
meeting points would be conveyed to their respective ministers.


8. (U) This cable has been cleared by AUSTR FLiser.NOLAN