Despite intensifying competition from China and concerns about trade issues and agreements, the chairman of the National Cotton Council says “our industry has excellent prospects for achieving profitable cotton production and processing.”
Woody Anderson, Colorado City, Texas producer, outlined industry issues for several thousand producers, researchers, and industry leaders attending the annual Beltwide Cotton Conferences at New Orleans this week.
While acknowledging that China “has become a very good market for our exports,” he says its unpredictability and unwillingness to fully comply with all of its trade obligations “requires the Council to make sure that China complies with its World Trade Organization commitments.
“We've worked closely with the U.S. textile industry to insure that appropriate safeguards are imposed against surging textile imports from China. In recent months, nine threat-based China textile safeguard petitions were filed, and seven of those have been accepted for review by the Committee for the Implementation of Textile Agreements.”
Council President Mark Lange participated last year in a number of meetings in China to promote the use of U.S. cotton and, as a member of the U.S. textile and apparel delegation, had an opportunity to present the U.S. cotton industry's concerns about China's implementation of its WTO commitments.
He also discussed the need for China to open its markets and its economic system, and pointed out that U.S. manufacturing is being swamped by unfairly priced made-in-China apparel.
Anderson and Council Legislative Director John Maguire also visited China to participate in several meetings with that country's officials and to reiterate the importance of free trade between the U.S and China.
Although the Council has policy that opposes the Central America Free Trade Agreement (CAFTA) in its current form, he says “We will continue to look for opportunities to negotiate improved textile provisions” in the agreement to be presented to Congress.”
CAFTA, as presently structured, contains several provisions that would grant benefits to non-signatory countries.
Also at the top of the Council's list of concerns, Anderson says, is the ruling late last year by the World Trade Organization in favor of Brazil's complaint about the U.S. government cotton program.
“Very simply, the facts in this case, the economics, and the existing WTO agreements don't support the dispute panel's primary decisions. We will continue to work closely with the U.S. attorneys involved in the case to pursue an aggressive appeal of the panel's findings.”
That process, Anderson says, will take several months, but “we remain hopeful it will result in substantial revisions to the initial ruling.”
Council leaders are also involved in the Doha Round of World Trade Organization negotiations, which were renewed last July and have resulted in the development of an agricultural framework agreement.
While the agreement is an improvement from earlier versions, Anderson says, “it still contains specific references to cotton and includes the establishment of a special subcommittee that will meet periodically and report to the agricultural negotiating group.”
The Council has met with senior U.S. Trade Representative officials about the special subcommittee's duties and the timetable for further WTO talks.
“Overall, the framework agreement seems to contain sufficient structural flexibility to maintain an effective farm program, but we've urged U.S. negotiators to insure that any domestic support reductions beyond the initial year continue to move global subsidies toward harmonization and that they are not unfair to U.S. agriculture.
“We've also expressed strong support for a comprehensive agreement that involves all member countries and all commodities, and does not single out the U.S. cotton program.”