Evaluating the WTO Nairobi Outcome on Cotton

The Tenth WTO Ministerial mandates that all countries prohibit cotton export subsidies by 2017. Since the United States eliminated a program called “Step 2” in 2006, no country has provided subsidies for Upland cotton exports.

The Tenth WTO Ministerial mandates that developed countries, and those developing countries declaring that they are able to do so, provide duty-free and quota-free access for cotton from LDCs. As of 2016, no developed country imposes either duties or quotas on imports of cotton, and China is the only developing country of any market significance to impose quotas or duties.

All subsidies distort, and cotton farmers in the EU and the United States still benefit from subsidies. However, the subsidies received by farmers in the EU and the United States are now mostly decoupled from current production decisions, and depending on price patterns, are likely to be significantly less than subsidies received in earlier decades.

1b. Final Report Evaluating Nairobi – What Does the Outcome Mean for Trade in Food and Farm Goods