Early in 2010, the National Cotton Council joined a broad coalition of food and agriculture organizations in a communication urging Senate leaders to act promptly on the nominations of Isi Siddiqui to be chief agricultural negotiator at the U.S. Trade Representative’s office and Michael Punke to be deputy USTR based in Geneva. The letter cited the exceptional qualifications of both candidates, who were approved by the Senate Finance Committee. The letter also pointed out that there were a number of critical trade disputes and negotiations requiring immediate attention and that a complete USTR team needed to be in place.
A Presidential Memorandum affected future participation by some NCC staff in several agricultural advisory committees, including the Agricultural Policy Advisory Committee for Trade (APAC) and six Agricultural Technical Advisory Committees for Trade (ATAC). To be considered for advisory committee membership, the memorandum stipulated that nominees had to submit an affirmative statement that the applicant was not a federally registered lobbyist. Previously, key staff members of commodity organizations, including the NCC, served on these panels.
World Trade Organization
Late in the year, key World Trade Organization (WTO) members agreed to seek agreement on a Doha Round package covering all major sectors during 2011. Representatives from the United States, the European Union, China, India and Brazil agreed to launch intensified negotiations in early 2011.
Regarding the WTO Brazil-U.S. trade dispute, Brazil published a list of 102 products that were to be subjected to increased tariffs as a result of the ongoing dispute concerning certain provisions of the U.S. cotton program and the export credit guarantee program. The U.S. cotton program’s share of the retaliation awarded to Brazil by the WTO was relatively small and fixed at $147 million. The remaining damages of $682 million were associated with the export credit guarantee program and determined annually using a formula developed by the arbitration Panel. In response to Brazil’s announcement, the NCC stated that Brazil’s latest actions were imposing unwarranted harm on Brazilian and American interests in times of economic hardship for all. The NCC also stated that it is unfortunate that Brazil was taking retaliatory steps even though world cotton prices in early 2010 were more than 50 percent higher than 2005, the year that was the basis for the original Panel ruling.
NCC Vice Chairman Charles Parker, far left, led a U.S. cotton industry delegation on a nine-day tour of China’s cotton and textile industries.
After Brazil published a list of 21 items under consideration for cross-retaliation in the ongoing dispute, NCC staff continued discussions with the U.S. Trade Representative, USDA and key Congressional offices. A negotiated Framework Agreement was hailed by NCC Chairman Eddie Smith as “a positive development” in the long WTO case. “The two critical aspects of the agreement are that it avoids the immediately harmful economic effects of trade retaliation and it puts the serious discussion concerning changes in the U.S. cotton program before Congress in the 2012 farm bill, which is where that discussion belongs,” Smith said in the NCC response. Then, the NCC signaled its support of progress in the ongoing efforts to resolve the trade dispute with Brazil after U.S. officials announced the signing of a Memorandum of Understanding between the two governments.
In June, Chairman Smith said in a statement that the U.S. cotton industry would work with Congress and the Administration on the 2012 farm bill in order to develop cotton policy that will continue to provide the safety net needed by U.S. farmers while helping assure trading partners that U.S. cotton programs do not cause unfair trade distortions in the world cotton market. That promise came following the United States’ and Brazilian officials’ announcement that the two countries concluded a Framework Agreement with respect to the WTO dispute involving the export credit guarantee programs and certain provisions of the upland cotton program. Chairman Smith, along with NCC President Mark Lange and Senior Vice President John Maguire, also were briefed by high level Administration officials and given additional details and background regarding that Framework Agreement.
The Export Credit Working Group, comprised of agricultural trade associations, including the NCC, heard an update from the Administration on the long-running trade dispute that includes the export credit guarantee programs, in addition to certain upland cotton program provisions.
NCC Vice Chairman Charles Parker led a U.S. cotton industry delegation on a nine-day tour of China’s cotton and textile industries. Also participating were producers Shawn Holladay, Lubbock, TX; Richard Kelley, Burlison, TN; and David Dunlow, Roanoke Rapids, NC; ginner Kirk Gilkey, Corcoran, CA; cooperative official Michael Quinn, Garner, NC, and Harrison Ashley, the NCC’s vice president of Ginner Services. The delegation was the fourth to visit China since the establishment of the U.S.-China Cotton Leadership Exchange Program by the NCC and the China Cotton Association.
NCC Vice President Andy Warlick, a North Carolina manufacturer, emphasized the importance of enhanced U.S. trade law enforcement at a press briefing announcing the Textile Enforcement and Security Act of 2010.
In other trade activities, the NCC:
- Emphasized to Congressional leaders the importance of enhanced US trade law enforcement -- through NCC Vice President Andy Warlick’s statement at a press conference announcing the Textile Enforcement and Security Act of 2010;
- Joined the National Council of Textile Organizations (NCTO) in working with relevant agencies and Congressional Members to promote programs that could be utilized by U.S. spinners to facilitate their export business -- including urging EX-IM and the Small Business Administration to make modifications in their credit guarantee programs so they can be better utilized by the textile industry;
- Coordinated with other organizations representing US textile manufacturers, fiber suppliers and employees on a letter to Secretary of State Hillary Clinton and USTR Ambassador Ron Kirk conveying strong opposition to a proposal to expand Reconstruction Opportunity Zones in Pakistan and Afghanistan – a move that would cause irreparable damage to the U.S. textile industry and result in significant job losses;
- Participated with representatives of NCTO, the American Cotton Shippers Association and AMCOT in meetings with Administration officials to raise concerns regarding India’s ongoing restrictions on cotton exports – a move that had added to the volatility and uncertainty in the world cotton market.