Okonjo-Iweala Seeks Cut in Subsidies on Cotton, More Market Access for Developing Countries
Dr. Ngozi Okonjo-Iweala, the Director-General of the World Trade Organization (WTO), recently emphasized the urgent need to tackle market distortions within the cotton industry and address the impacts of climate change on African cotton producers. In her keynote address at the World Cotton Day 2024 opening ceremony in Cotonou, Benin Republic, she stressed that reducing cotton subsidies—which currently amount to $8 billion—would lead to a more equitable marketplace for developing countries, enabling them to more effectively capitalize on trade benefits.
Dr. Okonjo-Iweala acknowledged the dedication and hard work of WTO member states in advancing negotiations aimed at supporting the cotton sector. Despite the high quality and environmentally sustainable nature of African cotton, she pointed out significant hurdles persist, including market distortions and the adverse effects of climate change.
She highlighted the vital importance of cotton in the economies of West and Central African nations, specifically naming Benin, Burkina Faso, Chad, Mali, and Côte d’Ivoire—collectively referred to as the Cotton4+ countries. These nations are the continent’s largest cotton producers, yielding over one million tonnes annually, which constitutes 50 percent of Africa’s total output and 4 percent of global production.
In her remarks for this year’s World Cotton Day, Dr. Okonjo-Iweala commended the notable economic advancements achieved by Benin under President Guillaume Athanase Talon and expressed her appreciation for the country hosting this historic event, the first of its kind in Africa. She highlighted the increasing investment opportunities within the African cotton sector.
“I hope this World Cotton Day serves as a platform to unite our efforts aimed at improving conditions for cotton farmers and transforming the sector, with a focus on sustainable development and maximizing growth, job opportunities, and overall benefits,” she remarked.
Additionally, Dr. Okonjo-Iweala pointed out that West and Central Africa is now recognized as the third-largest cotton exporter globally, trailing only the United States and Brazil. She noted that the region’s contribution to global trade has surged significantly, rising from $8.2 billion in 2003 to $23 billion in 2022.
Reflecting on the history of the Cotton4 countries, she reminded the audience that two decades ago, these nations urged the WTO to address unfair trade practices in cotton. This initiative resulted in cotton acquiring a distinctive status within the WTO, leading to regular meetings focused on both trade and developmental challenges in the sector.
On the developmental front, Dr. Okonjo-Iweala highlighted the substantial advancements made in boosting the competitiveness of the Cotton4 nations and exploring the potential of cotton markets, both regionally and globally. “The African market for cotton alone is valued at $12 billion. We are also exploring external opportunities, such as the sports apparel value chain, which is expected to reach $250 billion by 2026,” she added.