DR-CAFTA Will Strengthen Southeastern Cotton Producers

The NCC says that a DR-CAFTA will bolster Southeastern U.S. cotton producers and help sustain one of their most reliable markets – the U.S. textile industry.

July 27, 2005
Contact: Marjory Walker
(901) 274-9030

MEMPHIS - A Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) will bolster Southeastern U.S. cotton producers.

The trade pact also will help sustain one of Southeastern cotton producers’ most reliable markets – the U.S. textile industry. Those benefits would come in the form of increased cotton yarn and fabric exports to an already healthy export market comprised of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

National Cotton Council economists say the DR-CAFTA market currently imports 13 percent of the U.S. cotton crop or 2.7 million U.S. bales. That is a combination of 200,000 bales of raw cotton and 2.5 million bale equivalents purchased as yarn and fabric manufactured by the U.S. textile industry. The CAFTA region is the second largest market for U.S. yarns and fabrics. Furthermore, cotton apparel imported by the U.S. from this region has a much higher content of U.S. fiber than product coming from Asia.

That’s why the NCC’s board of directors adopted a resolution earlier this year that urged Congress to endorse the current DR-CAFTA. The board recognized that the agreement should provide the United States the best opportunity for supplying apparel manufacturers and other end-use manufacturing industries in the Western Hemisphere with U.S. cotton fiber and U.S.-produced cotton textile products.

The NCC resolution was passed on the contingency that the “adverse effects of 3rd-country participation” on the U.S. cotton and textile sectors were addressed in the treaty.

“We are satisfied that this DR-CAFTA, with the improvements to be made as a result of cooperation between the administration and a number of Congressional members from the Southeast, will benefit cotton producers and their textile customers,” said Southern Cotton Growers President Sam Spruell, a Mt. Hope, AL, producer. “The treaty also will benefit the region’s economy because cotton is important to all Southeastern states.”

Jimmy Webb, a cotton farmer from Albany, GA, said, “cotton farmers are extremely appreciative for the work by our Representatives and the textile industry to identify creative solutions to address concerns with the DR-CAFTA, which if uncorrected, could have under-mined the potential benefits of the agreement for domestic mills and cotton farmers. We also extend our appreciation to Ambassador Portman and others in the Administration who have worked with Congress and the industry to address our concerns. Cotton farmers are pleased to join our domestic customers in urging House members to approve this important agreement so we can expand markets for U.S. cotton and cotton products in the region.

Spruell and Webb cited the latest U.S. Census of Agriculture statistics that show there are 7,700 cotton farms in North Carolina, South Carolina, Georgia, Florida, Alabama and Virginia producing more than 4 million bales of cotton annually with a farm-gate value estimated at roughly $1 billion. Cotton in the region supports more than 180,000 jobs and generates close to $20 billion in business revenue.

“This treaty also will help stabilize the U.S. textile industry which traditionally has been the best customer of Southeastern cotton producers’ cotton,” Spruell said. “There’s a good deal of risk in cotton farming but it helps knowing our producers will have access to both a viable domestic textile industry and growing export markets.”