US given free-trade 'ultimatum'

2003-07-11 12:43

Washington - In a stunning role reversal, two African presidents demanded on Friday that the United States apply its free-trade preachings to its own economy by lifting generous state subsidies paid to southern cotton farmers.

Presidents Amadou Toumani Toure of Mali and Blaise Compaore of Burkina Faso wrote in the New York Times: "This vital economic sector in our countries is seriously threatened by agricultural subsidies granted by rich countries to their cotton producers.

"Our demand is simple," they continued, "apply free-trade rules not only to those products that are of interest to the rich and powerful, but also to those products where poor countries have a proven comparative advantage."

According to the African leaders, cotton accounted for up to 40% of export revenues and 10% of gross domestic product of Mali, Burkina Faso and neighbouring Benin and Chad - and constituted what they called their "ticket into the world market".

Subsidies distort cotton prices

But the industry's competitiveness was being undercut by about $3bn in annual assistance paid in the United States to 25 000 cotton farmers to enhance their competitive edge, the presidents said.

"Such subsidies lead to worldwide overproduction and distort cotton prices, depriving poor African countries of their only comparative advantage in international trade," complained Toure and Compaore, adding that the payments led to the impoverishment of about 10 million rural poor people in west and central Africa.

The presidents said their countries would demand an end to subsidies paid to cotton farmers in developed countries at a World Trade Organisation meeting on agriculture set to take place in the Mexican resort city of Cancun in September.

"As an interim measure, we also have proposed that least-developed countries be granted financial compensation for lost export revenues that are due to those subsidies," said the leaders.

The shot across the US bows came as President George W Bush toured Africa, urging regional leaders to adhere to free trade and open their markets to US products, particularly genetically modified crops, banned in many countries.

- AFX