NCC Responds to African WTO Cotton Proposal

MEMPHIS - In response to a recent proposal by a group of African countries to treat cotton differently than other agricultural commodities within the ongoing World Trade Organization (WTO) negotiations, National Cotton Council President/CEO Mark Lange said, “A move away from the single-undertaking approach to the WTO agricultural negotiations would be a serious mistake for the Doha Round.”

Lange said the proposal of several African countries calling for an early harvest of the U.S. cotton program is “a rehash of earlier proposals and is out of place in the cotton subcommittee. To focus on this proposal would prevent the subcommittee from truly discovering what is happening in world cotton markets. 

“The proposal is based on a faulty assumption that their current economic troubles are due to the presence of the U.S. cotton program, even though a number of independent analyses have attributed only marginal price impacts of two percent or less to the U.S. program. The proposal does nothing to address serious distortions that exist in international trade in textiles and apparel which are at the center of the low prices faced by the world’s cotton producers. There is no meaningful textile proposal in the document.”   

Lange said the proposal also does not address the surge in manmade fiber production and its impact on cotton prices.

“The major challenge facing all cotton farmers is to promote increased consumption of cotton and cotton products,” he said. “U.S. farmers fund a successful program to encourage consumers to buy more cotton. We know it is working because U.S. consumers purchase more cotton per capita than any other country. If each consumer in Western Europe purchased the same volume of cotton textile and apparel products as the U.S. consumer, world consumption would be increased by 15 million bales.”

Lange noted the United States has indicated it is committed to reform in the disciplines governing agricultural subsidization, “a commitment that is broad-based and stretches beyond cotton as part of the ‘single-undertaking’ approach that is critical to success in the Doha Round. Farmers do not operate in a vacuum. Isolating specific crops can upset the balance in commodity markets and is a short-sighted trade remedy.”

The NCC executive said the proposal would introduce more subsidies into the system – a new internationally funded subsidy program to be provided only to certain African countries. He said there is no place in the WTO for a new agricultural subsidy program, and the U.S. cotton industry also supports the U.S. position that a new international subsidy program governed by the WTO is not an acceptable answer. 

“The U.S. cotton program is not the source of economic hardship for farmers in African countries; rather their continued reliance on a monopolistic, parastatal ginning and marketing system,” Lange stated. “African farmers need assistance in improving agronomic practices, establishing a reliable classing system, improving infrastructure and ginning, privatization of marketing and distribution, and assistance in building expanded markets in order to improve farm income. The U.S. cotton industry, working cooperatively with USDA and US AID, has initiated several development programs designed to assist African farmers in achieving these goals.”