MEMPHIS - National Cotton Council Chairman John Pucheu says an upcoming WTO cotton session coupled with other WTO activities “is an unfortunate turn of events that can severely undermine the credibility of the WTO dispute settlement process.”
Pucheu, a Tranquillity, CA, producer, was referring to World Trade Organization Director General Pascal Lamy’s scheduling of a “high profile session” on cotton in Geneva on March 15-16 within two weeks of oral arguments in the Brazil-United States Cotton Compliance dispute. “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 underway.”
Jon Hardwick, chairman of the American Cotton Producers and a Louisiana cotton producer 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.”
Woody Anderson, a NCC Board Advisor and Texas cotton producer, took issue with French President Chirac who last week called for abolishment of 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.”
Woods Eastland, a Mississippi cooperative official and NCC Board Advisor, said that, “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. 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 must also 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.”
David Burns, a Laurel Hill, NC, 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.”
Burns stated that 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.
“U.S. cotton producers are asking for fair and unbiased treatment from the WTO,” Burns said. “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.”Burns stated, “The African delegations held out in Cancun; they held out in Geneva until they achieved cotton specific language; they held out in Hong Kong until they received even more inequitable cotton language; and they will hold out again for more inequitable cuts. 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.”