U.S. cotton producers may be taking it on the chin in the World Trade Organization’s Doha Round, but it might be even worse if they didn’t have strong, articulate spokesmen to defend them.
That’s the impression farm editors took away from listening to National Cotton Council Chairman Larry McClendon lay out its position on the Lamy text. The NCC is concerned the Lamy text, which calls for more drastic cuts in U.S. farm programs, could be the starting point when the Round resumes.
McClendon, an Arkansas producer and ginner, gave an update on the current status of the negotiations and fielded questions during an hour-long press briefing at the Council’s Beltwide Cotton Conferences in San Antonio.
Over the last 10 years, the United States has lost 60 percent of its mill business due to market access agreements with China and other textile exporting countries. The result: U.S. producers must export 70 percent of their cotton.
Until fairly recently, the United States textile industry used 10 million bales of cotton or 10 percent of world production annually. That has dropped to 3 percent of the world market while China, which had 20 percent of the world’s textile mill business, now has 40 percent.
“Today, 40 percent of the world’s textiles are milled in China, but in the Doha Round it never gets on the radar screen because China is considered to be a developing country. That means it is exempt from all the rules and regulations and even the conversations,” McClendon said.
NCC leaders are also concerned about the issue of “flexibilities.” Developing countries, including India and Brazil, can exempt 5 percent of the products that come into their country from the more liberal tariff rules expected in Doha.
“It just so happens that cotton and most ag products fall in this 5 percent,” said McClendon. “Although they’re only exempting 5 percent of the goods, that could include 100 percent of the cotton because cotton gets lumped into that 5 percent.”
As a result, he said, “We saw zero market access,” in the proposals being floated by the developing countries last July. “What we did see were words like flexibilities, which basically means never having any market access. So we’re sitting here with the United States ratcheting down support and getting zero in return on market access.”
Cotton has been taking the brunt of the “bashing” in the Doha negotiations to this point but the focus could easily shift to other commodities.
“If we don’t have fair trade or access, what is happening to cotton will happen to the rest of U.S. agriculture,” he said. “Obviously, we want to protect the cotton industry, but we also want to send a signal that no commodity will be bullet proof when it comes to trade agreements. If they fall in line with the Lamy text, we will have to live with it for the next 10 to 20 years.”