MEMPHIS - National Cotton Council Chairman Woods Eastland expressed concern over the reported U.S. offer to allow upland cotton produced in certain less developed countries to enter the United States duty and quota free.
U.S. Trade Representative Rob Portman reportedly made the announcement about the duty-free, quota-free offer to West African states during a news conference today at the World Trade Organization (WTO) in Hong Kong. He urged major cotton purchasers, such as China and India, to waive their own tariffs for cotton shipments from the West African states while arguing that cutting global tariffs and helping the West African countries increase their productivity could be at least as important as cutting subsidies.
Eastland said, “This appears to be unilateral action by the U.S. in what should be multi-lateral negotiations. If improved market access for cotton produced in the truly least developed countries will provide meaningful economic gains then all cotton importing countries should be expected to match the reported U.S. proposal.”
Eastland also called on importing countries to ensure their market access commitments are administered in a transparent, predictable manner unlike the current practices of some of the world’s largest importers. He noted that U.S. farmers operate an effective, self financed market promotion program and that the United States is a net importer of cotton because U.S. consumers are the world’s leading consumers of cotton and cotton products on a per capita basis.
Pointing to the continued unfoundedchallenges by West African representatives that U.S. cotton subsidies are responsible for poverty in Africa, Eastland stated that, “Today, a Brazilian or Australian cotton farmer can sell cotton for 50 cents per pound while the West African farmer receives 32 cents per pound. This differential does not arise as a result of any U.S. safety net program. Rather, it exists from the vestiges of European colonial institutions that must be reformed by African leaders. The West African farmer has virtually no choices when acquiring inputs or selling the product of their efforts. The situation is now bearing down on West African farmers in the forms of significantly lower cotton yields, higher costs and lower returns.”
Eastland also noted the impact of all subsidies from all countries has been independently analyzed.
“Recent studies from respected international organizations such as the International Monetary Fund and the Food and Agriculture Organization of the United Nations have concluded that the cumulative effect of all subsidies by all countries amounts to as little as 2 percent to 4 percent price suppression in the world cotton market,” Eastland said. “Additionally, these studies note that improved market access is the vehicle for significant economic gains.”
Concerning the WTO agricultural negotiations, Chairman Eastland said, “The U.S. has tabled an aggressive, comprehensive proposal that significantly reduces trade distorting domestic support while opening world markets for agricultural products. Now, that has been supplemented by a unilateral offer of unprecedented market access unmatched by any other cotton importing country. If the developing world wants to see progress in agricultural markets, it should support the U.S. efforts in the WTO.”