WTO
The National Cotton Council was visible and vigilant in the World Trade Organization’s (WTO) Doha Round negotiations. NCC leadership and staff continued to work closely with the U.S. Trade Representative’s (USTR) office, USDA, Congress and other U.S. agricultural groups to: 1) counter any efforts to treat cotton inequitably and further isolate it and 2) insist that countries commit to meaningful and permanent market access for U.S. agricultural products commensurate with any reductions in program support.
Early in 2006, NCC Chairman Allen Helms and Vice Chairman John Pucheu met with Administration officials to convey the U.S. cotton industry’s concerns over the Hong Kong ministerial text. They expressed their belief that the general agreement on agriculture should be far more developed prior to any further cotton discussions. Helms later met with officials at USDA, the State Department and with Congressional members to urge resistance of any further efforts to isolate cotton for separate treatment during mid-year meetings aimed at jumpstarting the Doha negotiations.
The NCC joined a coalition of commodity, farm and dairy organizations in a letter which expressed concerns about the Doha round’s status. That coalition’s letter to President Bush, which was shared with USDA, USTR and Congressional members, stated several key points regarding the negotiations. Notably, the letter included a caution that the ambitious U.S. offer to reduce trade-distorting domestic supports is contingent on achieving the U.S. objective of increased market access and reductions in other trade-distorting practices conducted by U.S. trading partners.
That message was conveyed directly to WTO Director General Pascal Lamy by Helms who was among a group of leaders representing 11 U.S. farm and commodity organizations.
Throughout 2006, NCC leadership and staff, including Helms and Pucheu, participated in numerous meetings in Geneva where they were briefed on the Doha negotiations and were able to reiterate U.S. cotton’s position to key trade ministers. Following the submission of draft modalities on the negotiations’ agricultural text, Helms said the NCC would continue to work closely with Congress and USTR to ensure that a balanced and ambitious agreement is reached. His statement, following a meeting of WTO ministers in Geneva, called for a renewed focus on trade liberalization as a path to a successful agreement.
| “Any agreement must achieve significant and commercially meaningful increases in market access in both developed and developing country markets.” ... NCC Chairman Allen Helms. |
Helms commended the Administration and Congress for not allowing deadlines to undermine the nation’s sound negotiating position. He also publicly thanked Senate Agriculture, Forestry and Nutrition Committee Chairman Saxby Chambliss (R-GA) for his support of U.S. negotiators in the face of continued grandstanding by the European Union during those ongoing negotiations. Agriculture’s concerns were repeatedly echoed by Senator Chambliss (R-GA), including his statements following the Asian-Pacific Economic Cooperation meeting in Vietnam.
After the Doha Round was suspended, Helms commended Ambassador Susan Schwab and Agriculture Secretary Mike Johanns for continuing to demand an ambitious result in the negotiations.
| “Let me be clear, the United States offer on domestic support must be calibrated to reflect the market access offers on the table or a final agreement will not pass the U.S. Congress.” ... Senate Agriculture Chairman Saxby Chambliss (R-GA) |
In other WTO-related activity:
- NCC President/CEO Mark Lange sent a letter to Ambassador Schwab and Agriculture Secretary Mike Johanns urging them to call on China to participate fully in market access commitments and for those officials to reject calls for further concessions by the cotton industry. The letter pointed out that when combined with the elimination of Step 2, modifications of GSM export credit programs and the U.S. proposal on reduction in trade distorting domestic supports, the Cancun and Hong Kong ministerial’s reference to “expeditious and ambitious” treatment for cotton already has been met.
- Lange also told “The Next Steps for Africa” conference participants that it was unfortunate that a number of non-governmental organizations encouraged the West African C-4 to walk away from the Doha negotiations.
- Earlier in the year, Helms conveyed industry concerns with a C-4 proposal for disciplines on domestic cotton support in the Doha negotiations. He reiterated the NCC stance that “a single commodity focus is misplaced if gains for the majority of the world’s farmers are a standard for success” and that no one has yet matched U.S. ambition on agricultural market access.
- The NCC continued its work with the USTR and USDA in developing a defense against Brazil’s charges that the United States had not complied with the previous ruling of the WTO Dispute Settlement Body regarding certain aspects of the U.S. cotton program. That action came after a WTO Compliance Panel was named to hear Brazil’s charges that the U.S. measures were inadequate.
China
Will Coley, a Savannah, GA, warehouseman, told the Joint Subcommittees of the House Small Business Committee that China maintains barriers to fair trade and engages in practices that provide unfair advantages to its textile manufacturers. He said it was critical that the U.S. cotton industry work with Congress and the Administration to insist that China be held accountable to the rules and commitments of WTO membership.
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| Warehouseman Shane Stephens was part of a delegation of U.S. cotton leaders that toured Chinese cotton farms as part of an orientation to that country’s cotton production and processing. |
A Memorandum of Understanding was signed by NCC and China Cotton Association officials in Memphis. The two organizations pledged cooperation between their countries’ cotton industries.
FTAs/Textiles
The NCC sent a letter to USTR Ambassador Rob Portman and Secretary of Commerce Carlos Gutierrez seeking their assistance in alleviating the effects of “rolling” implementation of the U.S.-Central America Dominican Republic free trade agreements (DR-CAFTA). After Ambassador Portman recommended CAFTA implementation for El Salvador, the NCC pointed out that if a rolling implementation did not fully reflect and accommodate the current range of regional partnerships and trade patterns, U.S. textile and apparel companies could face millions of dollars in excess duties and lost export sales.
Provisions of the Pension Protection Act of 2006 helped alleviate some DR-CAFTA concerns. Under the changes, the material for pockets going into apparel made in the DR-CAFTA region will have to be made in the United States or in DR-CAFTA countries for the product to enter the United States duty free. Also included was a change to the rule of origin for pocketing fabric and a provision of authority to U.S. Customs and Border Protection to effectively enforce the tariff-preference level for Nicaragua.
The NCC, in concert with delegate-approved resolutions, expressed support for Congressional approval of free trade agreements with Peru and with Colombia. The United States finalized a FTA with Colombia that called for immediate duty-free trade in cotton and a yarn forward rule for textile products with no Tariff Preference Levels.
Numerous other FTA talks were initiated, including ones with Malaysia and the Republic of Korea – which are important U.S. cotton customers. The House approved a FTA with Oman, which was opposed by the National Council of Textile Organizations (NCTO) because it included exceptions to the yarn forward rule of origin.
NCTO also expressed opposition to a U.S.-Vietnam bilateral agreement because it did not include an adequate safeguard mechanism to replace current quotas. The industry provided evidence that Vietnam heavily subsidizes its textile industry. They asked that import restrictions remain in place until the subsidies are eliminated. Subsequently, NCTO leaders voted to oppose the agreement and work with Congress to modify the accord or work to defeat extending permanent normal trade relations status to Vietnam.
The NCC also joined textile and apparel groups in asking Congress to act to ensure that there is no interruption in preferential access for products produced in the Andean region containing U.S. cotton, yarn and fabric.
The NCC joined NCTO in asking key Republican Congressional members to express their concern about scheduling floor consideration of legislation that would have extended the Generalized System of Preferences and certain provisions of the Africa Growth and Opportunity Act. Among other effects, that bill would have extended and gradually terminated a provision which allows Sub-Saharan African countries to use textile components from non-African, non-U.S. suppliers to produce products which then receive preferential access to the United States.
In other activity, the NCC:
- Joined NCTO and American Apparel and Footwear Manufacturers Association in conveying support for legislation that would restore the rank of Ambassador to the U.S. Trade Representative’s Special Textile Negotiator and re-designate the title as Chief Textile Negotiator and
- Applauded legislation that bolstered the U.S. Customs and Border Protection Department by providing additional personnel in order to escalate seizures and crack downs on textile fraud and transshipment.