National Cotton Council leaders have looked at a schedule of upcoming WTO events and decided they do not bode well for U.S. cotton.
The NCC says the WTO has slated a compliance panel to hear oral arguments in the Brazil-United States Cotton Compliance dispute Feb. 27-28. Hard on the heels of that will be a “high profile” March session on cotton at the WTO headquarters in Geneva.
The two meetings focus too much attention on U.S. cotton at a time when WTO leaders obviously are trying to restart the suspended Doha Round negotiations, according to Jay Hardwick, chairman of the American Cotton Producers, the producer arm of the NCC.
The timing of the sessions is “an unfortunate turn of events that can severely undermine the credibility of the WTO dispute settlement process,” says Hardwick, a cotton producer from Newellton, La.
Hardwick, former NCC Chairman Woody Anderson, Cotton Council International President David Burns and former NCC Chairman Woods Eastland, discussed what they called the “troubling” confluence of events scheduled by WTO Director-General Pascal Lamy.
“The U.S. cotton industry is concerned that this session’s timing and the coverage of it can create a bias in the Compliance Panel’s deliberations as well as the Doha Round trade negotiations that are under way,” Hardwick said.
“We are concerned that these actions at this time are trying to produce an even more inequitable Doha Round Agreement for U.S. cotton – one that unfairly targets U.S. cotton producers and the U.S. cotton program. If the Secretariat continues this type of process, it increases the chance that the Doha Round of negotiations will be held hostage by Oxfam and several African countries.”
Oxfam has been a thorn in the side of the U.S. cotton industry almost from the beginning of the latest round of WTO trade agreement negotiations in Doha, Qatar, in 2001. Oxfam has repeatedly blamed the U.S. cotton program for “impoverishing African cotton farmers.”
Anderson, a NCC board advisor and producer from Colorado City, Texas, also took issue with comments by French President Jacques Chirac who recently made similar claims about the U.S. cotton program.
“When the president of France hypocritically blames African poverty on the U.S. cotton program, he blindly ignores decades of colonialism administered by France and a monopolistic economic structure in Africa established by French-parastatal corporations – corporations that profit from the plight of African agriculture,” he said.
“French parastatal corporations are partnered with almost every government in West Africa. This deprives African farmers of choices and continues to ensure they receive only about 40 percent of actual world prices for their cotton.”
Anderson noted that the discussions held within the WTO “consistently ignore the dramatic change in world cotton and textile markets; they ignore the decimation of the U.S. textile industry and the thousands of lost jobs in the United States; yet they demand even more liberalization from the United States and more and more exemptions for most of the rest of the world.”
Eastland, CEO of the Greenwood, Miss.-based Staplcotn cooperative, said the U.S. government has already taken steps to respond to an earlier ruling in a complaint brought by Brazil. The response includes the elimination of Step 2 payments to merchants and textile mills.
“Despite the changes in the U.S. program that have caused lower exports and will contribute to lower U.S. production in 2007, world prices have not significantly rebounded,” said Eastland. “They have not rebounded because production in India and Brazil and China will supplant any shortfall by the United States and man-made fiber stands ready to fill any shortfall in natural fiber production.”
Eastland noted that Africa’s woes also can be attributed to the increased competition from man-made fibers and the fact that Africa is unable to create a domestic yarn spinning and textile industry due to the flood of inexpensive exports from China and India.
“The U.S. has called for consultations with China under the auspices of the WTO on possible illegal subsidies on exports of Chinese manufactured products,” Eastland said. “The Chinese currency valuation problem still remains and also must be addressed. The fact is that cotton prices cannot rebound to the levels desired by West African producers – at least not with market conditions as they exist today.”
Burns, a Laurel Hill, N.C., cotton producer who serves as board chairman of the NCC’s export promotions arm, Cotton Council International, said the U.S. cotton industry always has supported the WTO Doha Agreement’s dual aim of liberalizing world trade and lowering trade distorting subsidies.
“But, we have also called for reciprocal market liberalization and the maintenance of a safety net for U.S. farmers,” Burns said. “The administration tabled proposals to reduce U.S. subsidy ceilings by 60 percent and the U.S. cotton industry supported those cuts provided we would receive commensurate increases in market access.
“Today, we see the rest of the world calling for more cuts by the United States, but U.S. cotton farmers have seen absolutely no commitment by the biggest cotton market in the world – China – for an increase in market access. In fact, China is asserting it should be exempt from further liberalization.”
A Doha Agreement based on inequitable cuts for cotton and no corresponding increases in cotton market access will be devastating to U.S. cotton producers and to southern agriculture, he said.
No U.S. benefits
“U.S. cotton producers are asking for fair and unbiased treatment from the WTO. Instead, we are asked to contribute more and more and receive no benefits in return. Instead, we are consistently seeing the director general acquiesce in a plan to single out cotton for more unfavorable treatment and potentially to bias a WTO dispute settlement panel. They will not let an agreement happen unless they get what they want on cotton.”
Delegations from the so-called C-4 countries – Benin, Burkina Faso, Chad and Mali – have stonewalled at Doha negotiating sessions in Cancun, Geneva and in Hong Kong until they received inequitable cotton language and will continue to do so, said Burns.
“They will not let an agreement happen unless they get what they want on cotton. We consider this pattern to be unfortunate for the WTO as an institution, and we also believe it misses the mark for Africa. We hope the director general will reconsider this course of action and will refocus efforts on an agreement that will be beneficial to all participants.”