The continuing efforts of the World Trade Organization to single out cotton from broader agricultural negotiations is a concern for U.S. cotton, says Woods Eastland, chairman of the National Cotton Council.
“We were extremely disappointed” with the declaration approved by participants of the WTO ministerial meeting held in Hong Kong last month, he told those attending the annual Beltwide Cotton Conferences at San Antonio, Texas.
“The Council believes the declaration text is not consistent with the concept of a single undertaking for agriculture and establishes an unwise precedent for WTO trade negotiations,” said Eastland, who is president of the StaplCoton cooperative at Greenwood, Miss.
Council leadership will continue to meet with U.S. Trade Representative and U.S. Department of Agriculture officials to assess the current text and evaluate future implications, he said.
Council leaders have been intensively involved in the WTO Doha negotiations in Washington, Geneva, and Hong Kong in efforts to reinforce the U.S. position regarding a comprehensive agricultural agreement and to ensure that the U.S. cotton program isn't singled out for separate treatment from other commodities.
“Our meetings in Geneva also provided us an opportunity to review with U.S., WTO, and West African officials the Council's cooperative efforts with the USDA and US-AID in helping the Africans to address their rural quality of life and cotton production problems,” Eastland said.
Charges that small acreage cotton growers in African nations are being deprived of marketing opportunities because of government subsidies to U.S. growers has been an ongoing issue of contention in the WTO discussions.
The “unpredictability and unwillingness” of China to fully comply with all its trade obligations continue to be a concern to the Council, he said.
China has become the world's largest importer of U.S. cotton, with 5.1 million bales of American cotton already sold in the 2005 marketing year.
“We've worked with the administration in conducting numerous meetings with Chinese officials about the way that country allocates its import quotas,” Eastland said. “An additional concern is the variable duty announced by China on imports in excess of their WTO commitment.”
The duty, he noted, pushes the price of imported cotton higher than that of Chinese domestic polyester.
While farm program defense and trade issues have been a primary focus in 2005, the Council has continued to be active in several regulatory areas to ensure that the U.S. cotton industry isn't burdened with rules or denied access to products that would compromise its ability to compete in the world marketplace, Eastland said.
Based on research sponsored by the Cotton Foundation and testimony by the cotton industry, the Council's proposed changes to the International Code Council's fire code were approved. “As a result of these efforts, densely-baled cotton is no longer listed as a high hazard, and ginning is considered an agricultural process and not a commercial or industrial operation.”
Following a cotton industry orientation on cotton bale phytosanitary issues conducted by the Council for APHIS personnel, a national compliance agreement was developed in an effort to harmonize the phytosanitary and accreditation process.
Eastland pointed out that 2006 marks the 50th anniversary of the creation of Cotton Council International and its successful programs for developing international markets for U.S. fiber and cotton products.
“For the 2005-2006 marketing year, the U.S. is projected to export 16 million bales — about 70 percent of this country's production. This is a huge change from the 2.2 million bales and 15 percent of exports in the year CCI was founded,” he said. “U.S. exports of cotton yarn and fabric have also grown strongly during the period, thanks to the promotion efforts of CCI, Cotton Incorporated, and the U.S. mills.”
Despite those gains, however, Eastland said cotton's market share in the U.S. has experienced a decline due to intense competition from man-made fibers.
Though the last few years have shown improvement, “Our efforts for global cotton promotion must continue and must be further strengthened.”
CCI programs got a boost late last year with the announcement of an additional market access program (MAP) allocation that boosted its 2005-06 MAP funding to $15.2 million, well above the previous year's $11.5 million.
“If we had been able to hold our global market share at the 1990 level, the world would be consuming an additional 26 million bales annually, according to USDA baseline data,” Eastland said. “That translates into an extra 20 percent in demand — think what that would mean to U.S. cotton growers and to prices worldwide.”