EU to boost cotton imports from poor states

The European Union's executive commission unveiled a plan on Thursday to help developing countries dependent on exports of commodities such as cotton or coffee to boost earnings and protect themselves against price swings on world markets.
"The strategy is a response to a request from developing countries that want the question of commodity prices to be reconsidered," said European Trade Commissioner Pascal Lamy.
The initiative comes at a time of sliding commodity prices and in the aftermath of a breakdown in global trade talks in Cancun, Mexico, last September, a failure brought on in part by resentment in Africa at the refusal of rich countries - notably the United States - to cut back on cotton subsidies.
The European Commission plan calls for a revision of its "Flex" system, which allows for compensation to be provided to countries that face revenue declines linked to weaker export earnings.
Under the plan, criteria for inclusion in the system would be eased and would favour countries that have no direct access to the sea, notably Chad and Burkino Faso in Africa.
To take effect, the project would need the support of ministers from the 15 European Union states and the 80 nations in the African, Caribbean and Pacific group.
The Commission is also proposing an increase in financial and technical assistance to developing countries to diversify and improve the quality of their exports.
Some 80 million euros (103 million dollars) have been set aside for the scheme, which will benefit cotton growers in particular.
The European Union will also appeal to the United States and Japan to follow its lead and eliminate customs duties on nearly all products sold abroad by least developed countries, Lamy said.
Within the framework of the World Trade Organisation it will call for a reduction in customs duties on processed and industrial products - such as cotton thread and textiles - from such regions.
Lamy added that the EU was also prepared to eliminate export subsidies "on products of interest to developing countries".
The bloc intends to lend strong support to demands put forward in Cancun by African cotton producers Benin, Burkina Faso, Chad and Mali for the elimination of all forms of export support.
The African initiative in particular targets the United States, which, unlike the EU, provides substantial financial aid to its cotton exporters.
In 2002 the United States, a major cotton exporter, provided 3.9 billion dollars (3.0 billion euros) in subsidies to its cotton farmers, three times the amount of aid provided to African countries.
The African cotton-growing countries complain western subsidies are ruining their already struggling economies.