NCC Lauds Cochran’s Declaration on WTO Ag Trade Negotiations

A letter from Sen. Thad Cochran (R-MS) to U.S. Trade Representative Robert Zoellick says that a sectoral initiative, separate from the multilateral WTO negotiations, focusing solely on global cotton subsidies and the U.S. cotton program will be too limited in scope and would distract from meaningful progress towards multilateral reform of agricultural trade.

September 9, 2003
Contact: Marjory Walker or T. Cotton Nelson
(901) 274-9030

MEMPHIS – A sectoral initiative, separate from the multilateral negotiations, focusing solely on global cotton subsidies and the U.S. cotton program will be too limited in scope and would distract from progress towards multilateral reform of agricultural trade that could lead to increased market access and further discipline of domestic support and export subsidies.

That’s the charge of a letter to U.S. Trade Representative Robert Zoellick and Agriculture Secretary Ann Veneman (94k PDF file) from Sen. Thad Cochran (R-MS), chairman of the Senate Agriculture Committee.

The letter, also signed by Sens. Blanche Lincoln (D-AR), a member of the Agriculture and Finance Committees and Saxby Chambliss (R-GA), a member of the Agriculture Committee, conveyed what the lawmakers would like to see accomplished in agricultural negotiations about to take place at the World Trade Organization’s 5th Ministerial in Cancun, Mexico. Among those accomplishments, the letter stated, would be a comprehensive and constructive discussion, which would include all programs, practices and policies that cause low fiber prices and distortions in the world textile and fiber markets.

The Senators’ letter acknowledged the tremendous effort put forth by the U.S. agricultural negotiators to date and were encouraged to see many of the key concepts developed in the U.S. European Commission framework paper were included in the General Council’s draft Ministerial text.

They are concerned with the proposal calling for a separate discussion about global and U.S. cotton subsidies, introduced by Burkina Faso, Benin, Chad and Mali. That proposal calls for complete elimination of global cotton subsidies within three years as well as transitional compensation to be paid to the countries.

"We are sensitive to the economic difficulties of these countries but the sharp decline in cotton prices since the mid-1990s is not due to the U.S. cotton program," the letter stated.

The letter also pointed out that USDA data shows U.S cotton production actually has declined by 3.2 percent – 18.8 million bales average from 1994-1996 to 18.2 million bales average from 2000-2002. U.S. share of world cotton production fell from 21 percent to 19.9 percent.

Eliminating U.S. cotton subsidies, the lawmakers said, would have no long-lasting positive effect on these four countries – but would severely harm U.S. producers.

In separate documents provided to U.S. negotiators the National Cotton Council called attention to world fiber consumption trends. According to the NCC studies, while West African countries increased their production and exports by more than 2 million bales from 1990-2003 world consumption of cotton outside the U.S. was unchanged at 72 million bales and U.S. consumption increased by more than 8 million bales making the U.S. the only source of growth in retail purchases of cotton.

Clearly U.S. and African farmers have a common interest in increasing world consumption of cotton, which will be much more productive than time spent debating subsidies.

The letter further stated that the current round of multilateral trade negotiations offers the world the opportunity to increase market access and further discipline trade distorting domestic support and export subsidies but the sectoral initiative focusing specifically on the U.S. cotton program "is counterproductive to U.S. cotton’s interest and distracts from multilateral reform of agricultural trade."

National Cotton Council Chairman Bobby Greene said the U.S. cotton industry appreciates the Senators’ voice as these WTO agricultural negotiations get underway. "Senators Cochran, Lincoln and Chambliss understand U.S. cotton’s importance," Greene said. "They know how devastating it would be to undermine the successful government-industry partnership that supports this nation’s No. 1 food and fiber crop, its vast infrastructure of jobs and its contributions to the economy," Greene said.