EU Abandons Single Undertaking, Jeopardizing Doha Round
NCC Chairman Woods Eastland expressed disappointment at posturing by the European Union concerning the Doha Round Negotiations saying, “the EU Trade Commissioner’s call for cotton’s early harvest is divisive and holds the potential to send the Doha round into a chaotic free-for-all.”
National Cotton Council Chairman Woods Eastland today expressed disappointment at posturing by the European Union (EU) concerning the Doha Round Negotiations.
“The EU Trade Commissioner’s call for cotton’s early harvest is divisive and holds the potential to send the Doha round into a chaotic free-for-all,” Eastland said. “The widely accepted single undertaking approach avoids country-by-country sensitivities and limits the potential for brinksmanship in negotiations. Any move away from this approach will seriously damage whatever confidence the U.S. cotton industry currently has in the WTO system.”
Chairman Eastland was responding to a speech given by Peter Mandelson, European Commissioner for Trade, in which the Commissioner stated the EU has changed its policy concerning a comprehensive, all embracing deal in agriculture. In announcing the EU’s abandonment of a single undertaking process, the Commissioner singled out cotton for a separate, sectoral agreement with a focus on early harvest. Speaking in Bamako, Mali, the Commissioner denied the EU contributed in any measure to the difficulties of West African cotton farmers while noting the intention of the EU to provide development assistance.
NCC President and CEO Mark Lange expressed frustration at the announcement.
“The EU subsidizes virtually every agricultural sector and annually outspends the U.S. by a factor of three, yet it does an excellent job of trying to talk like a reformer,” Lange said. “The EU is attempting to leverage the developing world as it did in Cancun. Before the EU announcement, the latest reports from Geneva indicated that progress was being made in agriculture and that it was possible for there to be significant achievements prior to the Hong Kong meeting. Abandoning the single undertaking approach at this stage could upset further negotiations.”
Lange stated that the idea of dramatically changing the terms and conditions affecting one agricultural sector while leaving all other crops unchanged is naïve at best and crippling to other commodities at worst.
“Farmers do not operate in a vacuum,” Lange said. “Isolating specific crops can upset the balance in commodity markets and is a short-sighted trade remedy.”
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. This system fails to provide competitive markets for growers, charges inflated prices for inputs and fails to use internationally accepted grading standards and marketing practices. The result is incomes for African cotton farmers that are below reasonable expectations. Further, the EU’s failure to join with US farmers in promoting increased consumption of cotton products worldwide has resulted in per capita cotton consumption in Europe well below U.S. levels. Instead, the EU consumers disproportionately purchase man-made chemical fiber textiles and apparel.
African farmers need assistance in improving agronomic practices, establishing a reliable classing system, improving infrastructure and ginning, privatization of marketing and distribution, and assistance 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 results. The U.S. also has called for a comprehensive, sectoral negotiation to address inequities and unfair trading practices that exist throughout the fiber, textile and apparel complex following conclusion of the Doha round.