Bill Would Prohibit Brazil Payments

NCC Testifies on China Policies

WTO Director General Candidates Unveiled

Baucus Pushing TPA, TAA

ESA Consultation Lawsuit Dismissed

Labeling Bills Introduced

Inaugural Emerging Leaders Class Chosen

COTTON USA Connects With Peruvian Textile Industry

Sales, Shipments Stay Strong

Reps. Kind (D-WI) and Blumenauer (D-OR) reintroduced legislation (H.R. 1644) that would prohibit USDA from making payments as required by the US-Brazil Framework Agreement.

According to the statement accompanying the introduction of the legislation, they said that by seeking to stop the payment, they are trying to put pressure on Congress to reform domestic subsidies through the next farm bill so that the US is in compliance with the World Trade Organization (WTO) ruling.

"Spending millions upon millions of taxpayer dollars to subsidize Brazil's cotton industry is absurd public policy," Kind said in the statement. "Congress needs to get its priorities straight to ensure a fiscally responsible, smart food and farm bill for the 21st century."

The legislative proposal is identical to language included in an FY12 agriculture appropriations bill, which was never enacted. The legislation also was introduced in '12 by then-Rep. Flake (R-AZ), who now serves in the Senate. A member of Rep. Kind's staff said that he is evaluating possible legislative vehicles.

The latest USDA budget proposal did not include the $147 million payment for '14, indicating that the administration believes the next farm bill will include provisions that resolve the longstanding dispute over the cotton and export credit guarantee programs.

The NCC has proposed an area wide, voluntary crop insurance program as a replacement for the counter-cyclical program that was ruled as non-compliant by the WTO. The industry also has proposed a modification to the marketing assistance loan to address the WTO ruling. Both the House and Senate included versions of the industry's proposal in their farm bills last year and the industry has urged the respective agriculture committees to again include the insurance program in new comprehensive farm legislation expected to be considered by the House and Senate agriculture committees in May.

At a hearing held by the US-China Economic and Security Review Commission in Ames, IA, NCC President/CEO Mark Lange presented testimony on the current situation regarding cotton trade with China and the impacts of China's cotton policies.

During a hearing covering a range of agricultural products, Dr. Lange stressed the importance to US cotton of open and transparent market access. He noted that China stands in stark contrast to other cotton-importing countries by closely controlling their imports. The testimony also described China's current policies for supporting prices and building government reserves. While the build-up of government stocks has provided some short-term support to world prices, the longer-term implications of the policies are very concerning.

Dr. Lange testified that by supporting cotton prices at levels well above manmade fiber, China's policies are having a detrimental effect on demand as cotton is losing market share to polyester and other synthetic fibers. He concluded by cautioning the Commission that the "uncertainty with Chinese policy has the entire cotton world on edge." The full NCC testimony is on the NCC's website at www.cotton.org/issues/2013/upload/13langetestuscc.pdf.

The Commission was created by Congress in '00 with the mandate to monitor, investigate and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.

According to reports from Geneva, Ambassador Roberto Azevedo of Brazil and Ambassador Herminio Blanco of Mexico are the finalists in the selection process for World Trade Organization (WTO) Director General.

Amb. Azevedo always has been considered a strong candidate but many observers thought Mari Pangestu of Indonesia would be in the final round while few predicted Blanco would make it to the final round. Also eliminated from the running were Tim Groser of New Zealand and Bark Taeho of South Korea. In a critical development for Blanco, all European Union member states supported him and Azevedo for the director general slot, according to a British minister.

In the second round, member countries were asked to identify their top two choices of the four remaining candidates. WTO officials now will attempt to determine which candidate is supported by all of the organization's members as WTO decisions are made by consensus. The final selection must be made by May 31, three months before current WTO Director-General Pascal Lamy is scheduled to step down.

Azevedo is Brazil's current ambassador to the WTO and has served the Brazilian government in Geneva since the beginning of the Doha round. Blanco is a former trade minister who was the lead negotiator for Mexico during talks for the North American Free Trade Agreement, and has been in the private sector for more than a decade.

During a hearing on the Trans-Pacific Partnership (TPP) negotiations, Senate Finance Committee Chairman Baucus (D-MT) announced his intention to push legislation to provide Trade Promotion Authority (TPA) (fast-track), and said he wants Congress to renew the Trade Adjustment Assistance (TAA) program this year.

"I would like to see a bipartisan TPA bill introduced by June," Baucus said in his opening statement. "I am also looking forward to working with all of you to renew ... Trade Adjustment Assistance this year."

Both Baucus and Committee Ranking Member Hatch (R-UT) argued that TPA renewal would help the United States to conclude the TPP talks. Sen. Hatch went even further in his opening statement saying the lack of TPA is one reason why it is still unclear whether the TPP talks will be concluded successfully.

"Unfortunately, after 16 rounds and roughly 37 months of negotiations, it is still not clear whether the agreement will ultimately live up to the lofty expectations," Sen. Hatch said. "I believe one reason for this uncertainty is that our negotiators simply lack the tools necessary to complete the job."

The Northern California District Court dismissed the most recent and far reaching lawsuit on Endangered Species Act (ESA) consultation. Under the ESA, EPA is required to consult with the Fish and Wildlife and the National Marine Fisheries Service (the "Services") when registering pesticides. Litigation has been active in this area since the Washington Toxics case in '04, creating regulatory confusion and obstacles for registrants and users alike.

In Jan. '11, the Center for Biological Diversity and the Pesticide Action Network (Plaintiffs) filed suit against EPA for failing to consult with the Services regarding the effects of 306 registered pesticides on 216 endangered species throughout the United States (hence the name "Megasuit"). Of the listed pesticides, 17 are the most commonly used agricultural pesticides, such as 2-4D, aldicarb, atrazine, methyl bromide and its alternatives.

Plaintiffs asked the court to 1) require EPA to initiate and complete the consultation process and 2) compel EPA to restrict pesticide uses that may result in their entering endangered species' occupied or critical habitat until the consultation process is complete. This action would have disrupted every type of agriculture – from row crops to specialty crops – nationwide.

Because of this potential impact on agriculture, the NCC, American Farm Bureau Federation, the National Alliance of Forest Owners, the National Corn Growers Assoc., the National Agricultural Aviators Assoc., the Washington Farm Forestry Assoc., USA Rice, the National Council of Farmer Cooperatives and CropLife America were all granted status as interveners in order to participate in settlement discussions.

The order granting the motion to dismiss was important for several reasons. The court found that plaintiffs must show a specific agency action – not just the ongoing agency discretion underlying pesticide registration – for each of the 382 pesticides.

The court rejected the plaintiff's assertion that the statute of limitations does not apply, finding that the six-year statute does apply to each affirmative act alleged to each pesticide. Perhaps most importantly, the court held that where pesticide registrations are at issue, the Federal Insecticide, Fungicide & Rodenticide Act applies with regard to subject matter jurisdiction and that plaintiffs need to make specific pleadings supporting district court versus federal court as the proper venue. Again, these pleadings would need to be specific to every pesticide in question. Plaintiffs can appeal this decision or file an amended complaint within 30 days.

Legislation requiring the Food and Drug Administration (FDA) to label genetically engineered (GE) foods was introduced in both chambers of Congress by Sen. Boxer (D-CA) and by Rep. DeFazio (D-OR). The bills are co-sponsored by 31 members of both houses, mostly Democrats with the exception of Alaskan Republicans Sen. Murkowski and Rep. Young.

The Genetically Engineered Food Right-to-Know Act would require labels for GE whole foods, processed foods, fish and seafood and directs the (FDA) to write new labeling standards. FDA has a long-standing policy which requires labeling of GE foods only if the food is significantly different in nutritional property, includes an allergen, or contains safety risks for the consumer.

The bill is the result of the defeat of Proposition 37 in California last year. A similar referendum is underway in Oregon.

Labeling proponents claim that people have the right to know what ingredients are in the food that they consume. Groups supporting new labeling requirements include the Center for Food Safety, the National Farmers Union, Consumers Union and the Environmental Working Group.

Most agricultural groups, technology providers, food processors and grocery manufacturers are opposed to labeling, which is certain to drive up food prices. Opponents also believe that most Americans do not have accurate information about the technology and that anti-biotech groups will use the label as a scare tactic to drive consumers away from purchasing labeled products.

The NCC has selected the first class of its new Emerging Leaders Program -- an effort aimed at ensuring the US cotton industry benefits from a continuity of sound leadership.

Sponsored by a grant to The Cotton Foundation from Monsanto, the Emerging Leaders Program not only will provide class participants with an in-depth look at the US cotton industry infrastructure and the business and political arenas in which it operates, but also give them intensive professional development training, including communication skills enhancement. (see 10/12/12 Cotton's Week)

The 11-member '13-14 class is comprised of Marvin Beyer, Jr., a Taft, TX, producer; Lee Cromley, a Brooklet, GA, producer; Ben Evans, a ginner with Coffee County Gin & Four Corners Gin, Douglas, GA; Matt Hyneman, a Jonesboro, AR, producer; Jeff Johnson, a merchant with Allenberg Cotton Company, Cordova, TN; Jon Jones, a Floydada, TX, producer; Erin Langston, a ginner with Langston Enterprises, Blytheville, AR; Johnie Reed, a Kress, TX, producer; Matt Simpkins, a warehouseman with Lov-Cot Warehouse, Lubbock, TX; Kent Smith, a Rocky Mount, NC, producer; and Davis Warlick, Jr., a manufacturer with Parkdale Mills, Los Angeles, CA.

Class members will participate in three sessions. The first session, set for the week of June 9 in Memphis and St. Louis, will provide a NCC orientation, professional development/communication skills training and an agribusiness briefing. Class members will see policy development at the NCC's '14 Annual Meeting in February during the second session while the third session in Washington, DC, will provide a focus on policy implementation and international market development.

There is no age limit for Emerging Leaders candidates whose primary livelihood must be derived from at least one of the seven raw cotton industry segments. Nominations are made by one of the following: a certified interest organization, NCC officer or NCC director. Selections are made by the NCC chairman in consultation with the NCC President's office and NCC Member Services.

Council International (CCI) sponsored the Ninth Textile Forum in Peru, organized by the Peruvian Exporters' Association (ADEX), for attendees to discuss current textile market issues and opportunities.

CCI highlighted the COTTON USA Mark throughout the event to 225 attendees, including many of US cotton's key Peruvian customers. Participants discussed Peru's current textile market situation and analyzed the largest US apparel brands, European market opportunities and other topics. A panel of experts also discussed the Peruvian retail brand Michelle Belau.

The ADEX website featured the COTTON USA Mark after the event, and the ADEX magazine also published an interview with CCI.

Net export sales for the week ending on April 18 were 252,400 bales (480-lb). This brings total '12-13 sales to approximately 12.6 million bales. Total sales at the same point in the '11-12 marketing year were approximately 12.0 million bales. Total new crop ('13-14) sales are 1.4 million bales.

Shipments for the week were 361,200 bales, bringing total exports to date to 9.6 million bales, compared with the 8.0 million bales at the comparable point in the '11-12 marketing year.