Compliance Panel’s Ruling Disappointing

The NCC expressed disappointment with a decision, as reported by the news media from USTR Office statements, that a WTO compliance panel maintained the findings of the interim report released in July regarding a ruling in the case brought by Brazil against U.S. cotton.

October 15, 2007
Contact: Marjory Walker
(901) 274-9030

MEMPHIS, TN – According to reported statements by the Office of the U.S. Trade Representative, a World Trade Organization (WTO) compliance panel confidentially released the official version of its ruling in the case brought by Brazil against U.S. cotton. Press reports indicate that today’s release maintained the findings of the interim report released in July. In response, the National Cotton Council expressed disappointment with today’s reported decision.

We reiterate our concerns expressed when reports regarding the interim report surfaced. If the Panel ruled for Brazil on its serious prejudice claims, we believe that it would be contrary to the facts in the world cotton market both then and now.

U.S. actions already taken to comply with the first WTO Panel ruling have had a significant impact on U.S. cotton and U.S. cotton producers. Since the United States eliminated cotton’s Step 2 program, U.S. cotton acreage is down 29 percent for 2007 and the lowest since 1989. In addition, U.S. exports have declined significantly.

It is incomprehensible that a WTO panel could make a finding of serious prejudice against the United States when the international cotton market is strong. World prices are up, and production outside of the United States is estimated to be a record high of 102 million bales, including record crops in Brazil and India. In the face of these facts, the U.S. cotton industry is left to puzzle the basis of such a decision.

The National Cotton Council of America represents all seven segments of the U.S. cotton industry and serves as the central forum for consensus-building among those segments. Its mission is to ensure the ability of the U.S. cotton industry to compete effectively and profitably in the raw cotton, oilseed and U.S.-manufactured product markets at home and abroad. The Council is the unifying force in working with the government to ensure that cotton’s interests are considered.