In this paper, we construct the first country specific CGE model for Mali with a micro-simulation component to
analyze the poverty and inequality changes of removing cotton subsidies in developed countries. We used the
macro-accounting approach proposed by Chen and Ravallion (2004). This issue has attracted significant attention as
is has contributed to stall the broader trade agenda. Research on the issue has been mainly done with partial
equilibrium analysis with a few exceptions. We use the first CGE-micro-simulation model to investigate. A 17
sectors CGE model with almost 5000 households is used to demonstrate that removal of subsidies on cotton will
contribute to significant decrease in poverty in Mali. Our results show that combining the cotton subsidies removal
to other agricultural subsidies does not attenuate the positive effects observed. We also show that the subsidies
removal would marginally contribute to decrease inequality in Mali.