ecause U.S. textile mill shipments had fallen for the seventh consecutive year and textile jobs had declined 10 percent from 2002, gaining greater market access for U.S.-made textile products and stopping textile job losses became a dominant quest throughout 2003.
Realizing the increasing influence of trade policy and trade agreements on U.S.cotton’s future, industry leaders authorized a major initiative at the National Cotton Council’s 2003 Annual Meeting. They asked the NCC to direct greater leadership toward bringing the entire fiber and textile industries to a consensus on major textile policy. The NCC’s leadership was instrumental in reaching consensus on major provisions for a Central American Free Trade Agreement (CAFTA) early in the year and communicating that common policy to the Administration and Congressional leaders. Subsequently, agreement was reached and an action plan developed to counter China’s failure to comply with its World Trade Organization (WTO) commitments.
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The NCC joined with other U.S. textile and fiber industry associations in launching a lobbying campaign to ensure the U.S. textile industry’s survival. The centerpiece of the China initiative was persuading the U.S. government to implement special textile China safeguards in an early and effective way to moderate the massive surge of Chinese exports. Later, the NCC joined with 13 other textile organizations in a coalition effort championing this cause – a concern on which NCC Chairman Bobby Greene joined textile CEOs in briefing the Congressional Textile Caucus.
Throughout the year, the NCC and its textile coalition partners expressed apprehension over China’s taking advantage of ascension to the WTO to flood the U.S. with textile imports. The NCC also helped arrange and participated in orientations with senior textile executives in North Carolina, South Carolina and New York – which resulted in voter registrations and heightened communications with Congressional delegations and the Administration. News briefings in conjunction with these orientation sessions and on Capitol Hill helped focus media attention on the China problem’s seriousness and were instrumental in helping attract 170 Congressional signatures on a letter to the President urging implementation of textile safeguards authorized in China’s WTO accession agreement. The letter also urged the Administration to prevent third country participation in CAFTA and similar trade agreements and to retain U.S. textile tariffs under WTO provisions.
The NCC also registered a concern that China could take advantage of the new U.S.-Vietnam trade agreement by using that country as a transshipment point. The NCC noted that the doubling and tripling of quotas for Vietnam coupled with delays in implementing safeguards to deal with disruptive Chinese textile imports are highly damaging to the U.S. cotton and textile industries.
On November 18, the Committee for the Implementation of Textile Agreements approved the textile/fiber coalition’s China safeguard petitions on knit fabric, brassieres and dressing gowns. Approval of the petitions triggered a consultation process with the Chinese to limit the growth of imports to the United States in these categories. If China will not agree to the limits, the United States unilaterally may limit the growth of Chinese imports to 7.5 percent for the 12-month life of the safeguard.
Work continued with Congress and the Administration concerning China’s continued refusal to implement Tariff Rate Quotas (TRQs) and fully open its markets to U.S. raw cotton imports under its WTO commitment. That included NCC leaders Bill Dunavant, III, and Tom Smith urging U.S. Trade Representative (USTR) Robert Zoellick to raise the market access issue during his February visit to China and to request a WTO dispute panel if consultations were unsuccessful. The NCC also provided the USTR comments for its use in formal comments to China regarding its TRQ administration.
The NCC also weighed in on the plethora of trade agreements negotiated in 2003.
NCC Chairman Bobby Greene’s testimony in the House and Senate outlined the cotton industry’s priorities in a CAFTA. He noted: 1) good farm policy and trade policy are interrelated, 2) U.S. farm subsidies and textile tariffs must not be unilaterally eliminated or reduced, 3) Congress should insist that the Administration aggressively enforce existing agreements before approving new ones and 4) trade agreements negotiated with countries in this hemisphere must include provisions that enhance U.S. cotton’s global competitiveness.
NCC Vice President Stephen Felker and NCC Consultant Gaylon Booker later reiterated those priorities in advance of and during the next-to-last CAFTA negotiation round. That round’s textile discussions focused on rule-of-origin, customs enforcement and safeguard provisions, and included brainstorming on establishing a workable short-supply mechanism. The NCC later joined other organizations in expressing opposition to the inclusion of a “special regime” provision in the CAFTA that would constitute an exception to the yarn-forward rule of origin.
Prior to the final round of CAFTA negotiations in December, U.S. textile and cotton industry leaders built on the short-supply brainstorming session by working with Central American apparel manufacturers to fashion a short-supply mechanism that would be consistent with normal business practices. While details of the CAFTA agreement have not yet been released, most of the principles of that short-supply process are believed to have been incorporated in the agreement. However, a number of disturbing provisions allowing third country sourcing reportedly were included, despite a workable short-supply process that should have made any other third country sourcing avenues unnecessary.
In cooperation with an outside contractor, NCC completed a study to show the impact of a Free Trade Area of the Americas agreement on the U.S. raw cotton and textile sectors. The study confirmed the importance of developing a stronger Western Hemisphere trade platform that can help the U.S. cotton and textile industries compete with Asian cotton and textiles. It also confirmed the need for measures to prevent third country participation in trade agreements negotiated for the Western Hemisphere and revealed a need for certain safeguards to ensure that the U.S. cotton and textile industries are not disadvantaged as 34 nations are merged into a single trading community.
The Senate approved free trade pacts with Chile and Singapore, giving both nations the final Congressional go-ahead and ushering in what Bush Administration officials hope will be a new era in trade negotiations. A coalition of manufacturers, farm groups and high-tech, entertainment, and services companies backed the agreements, which add to existing U.S. free trade deals with Canada, Mexico, Jordan and Israel. The Administration also is negotiating deals with the Dominican Republic, Australia, Morocco and South Africa.
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Regarding the WTO’s ministerial symposium in Cancun, the NCC worked with the Administration to ensure the U.S. did not unilaterally reduce agriculture support. That meeting ended without an agreement on a framework for the rest of the negotiations, putting the Doha Round’s future in jeopardy.
The NCC was active throughout 2003 in responding to Brazil’s assertion that the U.S. cotton program is trade distorting and in violation of U.S. WTO commitments. The NCC assisted the U.S. dispute settlement team in preparation of the second of three rounds of oral hearings. A panel ruling was expected in April 2004.
The NCC also was active in the Sound Dollar Coalition that stressed to the Administration and Congress the damaging effects of China’s devalued currency to the U.S. textile industry.
The NCC addressed another China trade obstacle when it: 1) helped develop a response to China’s intended mandatory testing for short fiber content and nep count in raw cotton as part of its cotton standards and 2) asked the USTR’s office to pursue the matter. China later suspended that testing proposal, and its government developed a new inspection system based on instrument testing.
Among other key activities:
NCC Chairman Greene and NCC President Mark Lange reviewed cotton and textile trade issues in Washington, DC, with a Chinese delegation led by their vice minister of the National Textile Import and Export Corporation.
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Chairman Greene, Vice Chairman Woody Anderson and other industry leaders toured Brazilian cotton farms and gins and met with Brazilian textile manufacturer representatives in an effort to gain a better understanding of that country’s cotton industry and foster relationships between the two countries.
Appointments to the Agricultural Technical Advisory Committee (ATAC) for Cotton, Peanuts, Planting Seeds and Tobacco, which advises USDA on agricultural trade policy matters, included industry members: Kenneth Hood, Gunnison, MS; Tom Smith, AMCOT, Bakersfield, CA; Bobby Weil, Weil Brothers Cotton, Montgomery, AL; Bill Dunavant, III, Dunavant Enterprises, Memphis, TN; Billy Carter, North Carolina Cotton Producers, Scotland Neck, NC; Ott Bean, Gideon, MO; and Chuck Earnest, Steele, MO; along with Kater Hake, Delta & Pine Land, Scott, MS; and NCC staffers Gary Adams and William A. Gillon. NCC Consultant Gaylon Booker was reappointed to the Agricultural Policy Advisory Committee for Trade.
Booker also chaired the American Textile Alliance, which helped broaden support for common trade provisions in the CAFTA and FTAA agreements.
