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 MASERU 00000081 001.2 OF 002 ¶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. -------------- U.S. Position Clarified -------------- ¶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. -------------- "A Critical Stage" -------------- ¶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 MASERU 00000081 002.4 OF 002 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. -------------- -------------- 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