In 2003, Council leaders put defense of the U.S. cotton program and attaining sound trade policy at the very top of the Council’s action agenda.
The cotton program was under continuous attack from foreign competitors, from certain members of Congress, from the media, both U.S. and foreign, and from special interest organizations dedicated to misrepresentation of economic data-especially those that relate to farm programs.
Make no mistake, our industry and our programs are under assault. The entire cotton industry experienced a growing sense of frustration as one media outlet after another, without regard for truth, blamed our cotton program for driving down world prices and for the plight of poor African farmers. In fact, a recent article in the Economist would have the reader believe that cotton lies behind virtually every adverse turn in the history of mankind.
In Congress, the Council defended the farm bill throughout the budget debate and the appropriations process. We joined others who shared our views in testimony before the Payment Limit Commission about the extraordinary damage that will occur with additional restrictions on program benefits.
Meanwhile, the wide array of trade initiatives underscored the importance of the charge the Council was given during the 2003 Annual Meeting for finding consensus among textile and fiber organizations on key trade issues.
Repeated appeals for assistance on a number of important issues were answered by industry leadership. During last year’s budget debate, Council members were energized in response to an action alert, while the Council worked with a coalition of over 80 other agricultural groups to maintain spending levels consistent with the 2002 farm bill.
Throughout the drawn out consideration of agricultural appropriations, industry leaders continually answered the call with numerous Congressional contacts. In a departure from usual communication practice, the Council delivered a letter signed by 25 member farm families. The simple message that the current farm law must remain intact resonated with House cotton belt members.
In the face of our many challenges we responded with a record level of support to the Committee for the Advancement of Cotton. Today’s political environment demands that we keep CAC funded to ensure access for cotton’s voice. 2004 finds us with no fewer challenges, or perhaps I should say – no fewer enemies, and we are in need of no less support than that achieved in 2003.
Consensus-building continued as the Council helped establish strong support for three China-related initiatives, covering textile safeguard implementation, the denial of 3rd country participation in CAFTA and similar trade agreements, and the retention of U.S. textile tariffs under the WTO.
Throughout all of last year, the Council has applied industry leadership and staff resources to Brazil’s WTO challenge of the U.S. cotton program. With the Council’s assistance, lawyers and analysts at USDA and USTR have met every challenge in the case and presented an extraordinarily strong defense of the U.S. cotton program.
Other interests were also hard at work to dismantle the cotton programs of the U.S. and other developed countries. The African initiative within WTO to immediately eliminate our cotton program and receive compensatory payments was encouraged by a number of European interests and driven by the international aid organization, Oxfam.
The Council worked with USTR and our friends in Congress to ensure cotton was not singled out during the WTO general agricultural discussions at the Cancun ministerial. Council-developed materials helped foster a clear understanding of the many forces at work in the global cotton and textile markets. The U.S. countered the WTO cotton initiative with a broad proposal to examine all trade distorting practices relating to fiber and textile production and trade.
Unfortunately, the media followed the lead of those driving the African cotton initiative, releasing a relentless barrage of biased attacks on U.S. cotton. The Council responded strongly to these seriously flawed claims at every opportunity. The foundation of our response was educating and equipping our friends in Congress.
The Council’s media plan for the African challenge was used to the fullest extent possible and served to equip our members who received calls and participated in interviews.
While defense of our farm program...promotion of effective trade policy...and maintenance of a viable textile industry were top priorities in 2003, we also identified other opportunities to enhance our industry’s competitiveness.
Continued financial backing from the cotton industry allowed Cotton Council International to leverage industry funding at a five-to-one rate for its vital programs of strengthening our markets in Europe, Asia, Latin America, the Middle East and Africa.
The Council’s mission of providing the U.S. cotton industry with a world marketplace advantage was a guiding objective of the Cotton Foundation. The Cotton Leadership Program, which has the distinction of being the Foundation’s longest running special project, has provided highly effective training to over 160 leaders in our industry.
To more fully report on the wide scope of Council activities this past year, I invite your attention to a special video presentation. In preparation for this, I will ask the platform group to move off the stage to my left.
As the cotton industry develops strategy for 2004 and beyond, defense of the U.S. farm program and influencing the outcome of trade negotiations will continue to be positioned at the top of the Council’s priority list. The Council must also take advantage of other opportunities to enhance industry profitability and competitiveness.
Budget and appropriations measures for next year will be crafted in a partisan environment, and election year politics will dominate debate on every issue considered by Congress.
The cotton industry is very fortunate to have members of Congress who understand our industry and are willing to address key issues. But we must be prepared to adapt to change with several pending retirements in the Senate and re-districting issues in the House.
Growing budget deficits will generate pressure for change in 2004. When Congress begins debating the new budget, there will be proposals to save money by modifying programs or reducing benefits. Others in Congress will work to cut funds from production agriculture in favor of conservation, nutrition or other more politically attractive programs.
The Council will continue to work with all agriculture and allied organizations to effectively defend commodity programs and other key provisions of the farm law. We will build and maintain coalitions that remind Congress the current farm law is balanced in its approach to production, conservation and nutrition program funding.
The Council’s trade agenda stands virtually shoulder-to-shoulder with farm policy in determining the ultimate success of the cotton industry.
In response to Ambassador Zoellick’s recent efforts to jumpstart WTO talks, the Council will continue discussions with USTR to ensure that negotiations concerning the U.S. cotton program will be conducted in the context of the overall agricultural negotiations, while reiterating our concerns about the elimination of U.S. textile tariffs.
The National Cotton Council has continually stated that a good Central American Free Trade Agreement is essential to preserving a viable U.S. cotton and textile industry. A good CAFTA agreement assures that the benefits accrue to the signatory countries and denies unnecessary benefits to non-signatory countries. The Board of Directors has approved a resolution stating that the Council opposes the CAFTA agreement in its current form and urges Congress to defer consideration of CAFTA until such time as the textile provisions are thoroughly reviewed and significantly improved. The Council will continue to expend every effort to obtain improvement in the textile provisions of CAFTA. In addition, we will work to ensure that the extraordinary damage --already done to our industry from the market disruptions generated by China-- is addressed by the administration and Congress.
The findings in the Council’s Free Trade Area of the Americas analysis will help guide the industry in determining which provisions can be helpful and those that are most likely to be harmful. Likewise, we can expect USTR to step up the number of new bilateral trade initiatives. The Council must study each proposal carefully to assure it will benefit the U.S. cotton industry and not non-signatory 3rd countries.
Brazil’s WTO challenge ultimately extends well beyond the U.S. cotton program, and fundamentally threatens all U.S. domestic agricultural policy. The Council will continue to work with USDA and USTR to ensure that every effort is made to successfully defend our program.
While defense of the farm bill and promotion of effective trade policy remain top Council priorities for the coming year, we must be prepared to meet a number of other important challenges.
The Cotton Research and Promotion Programs are crucial to the industry’s future. In response to current legal challenges, I am pleased that the industry is taking a direct role in its defense. The Council, as appropriate, will assist in these efforts and work to maintain the vital research and promotion programs that have served us so well for the past 40 years.
Continued industry support and leadership for CCI are critical, given that 65 percent or more of U.S. cotton fiber -and in excess of four million bale equivalents of additional cotton yarn and fabric are now moving through export channels.
We must build on last year’s record contributions to CAC with a strong commitment from every industry leader to make sure that everyone with a stake in our industry is helping fund cotton’s political action committee. Along with our CAC support, I encourage each of you to be politically active and know your Senators and Representatives and their aides. Our very livelihood depends on it.
It will be essential for meeting the Council’s near-term budget goals, to continue and strengthen the industry partnerships like those with Cotton Foundation members that help the Council underwrite important activities.
Kenneth Hood, in his chairman’s report to Council delegates last year, reviewed the work of a special committee that studied the future role of the Council in view of income prospects and member expectations. That committee re-convened here in New Orleans to review the results of their work and to determine if other adjustments are necessary. Of course, budget adjustments in concert with the Committee’s earlier recommendations, resulted in a $2 million reduction in expenditures over two years. However, to maintain the Council’s priority services and programs, the Committee recommended updating the Council’s finance plan. In line with the Committee’s recommendations, industry leadership will develop a detailed implementation plan to take effect with the 2006 crop. Our current finance plan was implemented with the 1984 crop and will have served the industry for 22 years by the time a new plan takes its place.
In closing, I want to express my sincere appreciation for the opportunity to serve as Chairman of the Council. I am especially grateful for the industry’s outstanding support for Council programs and the excellent response to action alerts and other initiatives when we asked for your help. We are a unique industry and a unique organization. When I reflect on the Council’s past successes and consider our future challenges, I am encouraged by the industry’s ability to marshal its STRENGTH and work together through the Council to find the necessary SOLUTIONS that will ensure future success.