Global Trade Governance and Cotton Dependence: Beyond Poverty Maintenance

Abstract

Connections between international trade, cotton and poverty south of the Sahara are rooted in the economic structures bequeathed by the colonial era that persist to this day. Many countries in this region maintain a static specialization in cotton production and other diminishing return industries. This economic structure has been politically constructed and maintained over the past decades. Institutions and governance initiatives that governments of the South have launched to better their relative positions in the world trading system have been marginalized. This context has enabled a de facto incoherence between the trade and development policies of the European Union and the United States. The EU Common Agricultural Policy and US farm bills have maintained support systems for cotton farmers, ginners and traders that have led to increases in the global supply of lint and in the amount of cotton traded internationally. These policies have consequently exacerbated the general downward trend in the average world price offered for cotton lint and amplified the volatility of this price.