U.S. Cotton Wants Positive Doha Outcome; But NCC Opposes Singling Out Cotton

NCC President/CEO Mark Lange told the International Cotton Association in Liverpool that the US cotton industry will contribute to a positive outcome in the WTO’s Doha negotiations.

September 30, 2005
Contact: Marjory Walker
(901) 274-9030

LIVERPOOL, ENGLAND - The U.S. cotton industry will contribute to a positive outcome in the World Trade Organization’s Doha negotiations – an outcome that must stretch across all agricultural sectors and all trade-distorting policies while providing more liberalized trade to everyone.

This was one of two key messages delivered by NCC President/CEO Mark Lange to a meeting of the International Cotton Association here today.

Lange reiterated the NCC’s position that “U.S. cotton does not and will not support being singled out for an early harvest in the Doha Round. We have relayed to Congress and the Administration in clear terms that we are fully prepared to work toward an overall, beneficial agricultural agreement and cotton is prepared to make an equitable contribution toward that positive result. We will, however, oppose any agreement that singles out cotton for unfair, special treatment.”

He said the U.S. government has offered an aggressive and comprehensive initiative in the WTO special cotton sub-committee to examine all sources of price distortion in the world cotton market including subsidies to man-made fiber manufacturers, industrial trade policies affecting the flow of apparel and textile products, currency manipulation, and loan repayment practices.

In conjunction with addressing WTO policy issues, Lange noted U.S. cotton’s contribution to addressing developmental concerns of cotton-producing African countries. Via its partnership with the U.S. government, that includes bringing technologies and systems to Africa that will help improve lives in that rural population.

“We are addressing those aspects of the cotton systems in these countries that will yield long-term benefits and definite improvements in their ability to market and compete in the international cotton market,” he said.

Lange also provided an update on the United States’ response to the Brazil Panel Report on the Brazil-U.S. cotton dispute and what he termed “significant, unprecedented actions by the U.S. Congress.”

First, he said many commodity organizations believe USDA has gone too far in creating a more risk-based system for the U.S. export credit guarantee program, including seeking of legislation to remove a statutory cap on premiums it can charge users. Second, the NCC also has questioned the wisdom of ending the Step 2 component of the U.S. cotton program in the middle of a marketing year and is of the opinion that “compliance measures and timeframes within agriculture must keep in mind the cyclical nature of farming and of marketing crops. Dramatic program changes should not be forced on farmers in the middle of their marketing year for their crops – neither in the United States, nor anywhere else.”

Lange also noted that there were some aspects of the Brazil Panel’s decision that do not correspond to the official U.S. interpretation of the Uruguay Round Agricultural Agreement – an interpretation that was relied upon by the U.S. Congress when it approved that Round’s agreements. He said he also believed that:

  • The Panel linked the Peace Clause and the Subsidies Code in an unexpected manner, and the Brazil Panel produced vague deliberations on the concept of serious prejudice in that Code.
  • The United States is still concerned about the degree to which the dispute Panel seemed to ignore trends toward more decoupled programs in the United States.

“By essentially telling the U.S. that it does not matter what the U.S. interpretation of the agreement was, the Panel has ensured that any new agricultural agreement will face a more critical and suspecting U.S. agricultural community and U.S. Congress,” Lange said. “The next agreement will not be taken at face value by agricultural groups or the Congress – requiring negotiators to bring home an agreement with very few, if any, ambiguities remaining.”

Lange noted that as WTO Members push forward on the Doha Round they will face situations involving language containing “diplomatic ambiguity,” which could enable countries to take away their preferred interpretation and, thus, result in a detrimental interpretation for U.S. agriculture.

“I see it as the job of the National Cotton Council and every other agricultural organization in the United States to be diligent in our review of negotiating drafts and also to be vocal about our concerns,” he said.