Trade

World Trade Organization

Early in 2009, in testimony before the U.S. International Trade Commission (ITC), the NCC said India’s cotton subsidies, coupled with its failure to notify the WTO of those subsidy levels, are a major impediment to cotton trade. Dr. Gary Adams, the NCC’s vice president of Economics & Policy Analysis, told that panel that the NCC is “very concerned with the ongoing and expanded subsidies for cotton that Indian farmers are receiving in violation of their WTO commitments. We are also concerned that India's stance in the Doha Round negotiations would result in no increased market access for cotton fiber into India. Further, its textile policies unfairly enhance its textile competitiveness, while contributing to a low level of U.S. imports into India.”

NCC Vice Chairman Eddie Smith was joined by NCC President/CEO Mark Lange and NCC Senior Vice President of Washington Operations John Maguire in a meeting with U.S. Trade Ambassador Ron Kirk. Industry concerns with the continuing WTO Doha negotiations were discussed along with the ongoing WTO Brazil case and issues with market access in China.

The NCC sent  a letter to U.S. government officials – supported by a background paper – expressing disappointment that the West African C-4 country ministers continue to use outdated arguments in seeking an elimination of U.S. cotton subsidies through the WTO -- a solution that simply will not address their farmers’ needs. That information was reiterated by NCC President/CEO Mark Lange at a Washington, DC, symposium held in conjunction with the C-4 ministers visit. The NCC also distributed information to news media attending the event, and to Congressional members from cotton growing districts and states as well as to USDA and the USTR.

The NCC distributed information regarding the WTO Doha negotiations to news media attending this briefing at the National Press Club in Washington, DC, and to Congressional members from cotton growing districts and states, to USDA and the USTR.

Brazil-U.S. WTO Case

Throughout 2009, the NCC stressed that the current cotton market was much different than the time of the original Brazil-U.S. dispute period of 2002-05 – and that given changes in U.S. production and farm programs, there is no credible evidence to support a finding that the U.S. cotton program is causing economic injury to Brazil.

After the Arbitration Panel findings release was delayed for the third time, the NCC responded to inaccuracies in a letter sent by the U.S. Chamber of Commerce to members of the Senate finance and agriculture committees, and met with Chamber officials to discuss the case.

Following the Panel’s findings release, the NCC issued a statement saying it was pleased that the arbitration award was far less than requested by Brazil, that no award was provided with respect to the Step 2 cotton program, and that Brazil was not authorized to cross-retaliate at that time. The NCC joined with five other agricultural organizations in expressing disappointment that the panel based its decision on the GSM program as it existed in 2005. The groups also urged the U.S. government to request a new Compliance Panel to update the ruling.

Late in the year, the WTO Dispute Settlement Body officially recognized the August 2009 Arbitration Panel finding in the case brought by Brazil against the U.S. export credit guarantee program and portions of the U.S. cotton program. The NCC responded by issuing a statement saying it would “continue to work with the USTR, USDA and Congress to ensure that the many changes previously made to the U.S. cotton program and the export credit guarantee program are fully understood and considered by the WTO."

China

In a letter to USTR Deputy Ambassador Demetrios Marantis, the NCC conveyed the U.S. cotton industry’s concerns with China’s trade restrictions and policies for cotton fiber. The NCC also asked USTR to raise with Chinese officials the problems posed by the new registration requirements enacted in March.

The NCC also reminded Agriculture Secretary Tom Vilsack in advance of the U.S.-China Joint Commission on Commerce and Trade of the continuing market access issues that U.S. raw cotton faced with China and thanked USDA for the excellent work of its Agricultural Marketing Service Cotton Division in harmonizing Chinese cotton standards.

China Cotton Association leaders toured the U.S. Cotton Belt to learn more about the U.S. cotton industry under a 2006 Memorandum of Understanding signed between China and the United States.

China Cotton Association leaders toured the U.S. Cotton Belt to learn more about the industry under a 2006 Memorandum of Understanding signed between the two countries. The visit was sponsored by the NCC, Cotton Council International and The Cotton Foundation.

The NCC joined various textile, fiber and apparel coalitions in: 1) conveying concern to the USTR about a proposal to expand the provisions of the Afghanistan/Pakistan Reconstruction Opportunity Zone legislation to include cotton knit shirts, blouses and trousers – products that account for a significant portion of U.S. yarn and fabric exports to the Western Hemisphere which are converted to apparel and exported to the United States; 2) warning in a second letter to Secretary of State Clinton of the billions of dollars in textile and apparel trade between the United States and Honduras that was being seriously jeopardized by the continuing political crisis; and 3) urging Congress to take expeditious action to renew the Andean Trade Preference Act, which was set to expire on December 31, 2009.

In other trade activities, the NCC: 

• thanked China Fiber Inspection Bureau (CFIB) officials for their cooperative efforts with USDA’s Agricultural Marketing Service. The CFIB and USDA signed a memorandum of understanding to establish a framework for collaboration on cotton classification methods and standards.
• applauded the China Cotton Association’s launch of a cotton promotion program during its 2009 China International Cotton Conference.
• joined a broad coalition of commodity, livestock and general farm organizations in supporting the confirmation of Dr. Isi Siddiqui, nominated to serve as chief agricultural trade negotiator in the Office of the U.S. Trade Representative, and Michael Punke, nominated to serve as U.S. ambassador to the WTO and deputy U.S. trade representative.