World Trade Organization
Early in 2012, an NCC statement issued in response to farm policy criticisms by Brazil, said the Stacked Income Protection Plan represents a positive step forward in efforts to resolve the longstanding trade dispute between the two countries. The statement noted that moving upland cotton's support into an insurance program is entirely consistent with the World Trade Organization (WTO) panel's findings regarding trade and market distortions. It said that while the United States is seeking lower overall support "it is unfortunate that Brazil seeks to criticize the progress of writing new U.S. farm policy while Brazil simultaneously maintains a minimum support price for cotton higher than current U.S. support levels."
NCC Chairman Chuck Coley and Vice Chairman Jimmy Dodson, accompanied by NCC President/CEO Mark Lange and other staff, met with Congressional staffers, as well as with officials from USDA and the Office of the U.S. Trade Representative to discuss: 1) Brazil trade dispute developments, 2) the 2012 farm bill development and 3) options to resolve the WTO dispute with Brazil as part of the farm bill process.
A Brazilian cotton leadership delegation met with a Coley-led U.S. delegation to review issues of mutual interest, among them risk management, cotton's sustainability and international promotion. The NCC and ABRAPA, Brazil's national cotton producer organization, then issued a joint statement that pledged greater cooperation in these arenas.
NCC Farm Policy Task Force Chairman Woody Anderson and Cotton Incorporated Chairman Jay Hardwick, both former NCC chairmen, traveled with NCC President/CEO Mark Lange to Geneva, Switzerland, for meetings with trade ambassadors from China, India, Brazil and West Africa. The group also met with U.S. Ambassador Michael Punke, WTO Deputy Director Harsha Singh and WTO Deputy Chief of Staff Doaa Motaal. The trip was timed to allow participation in the annual WTO Cotton Development assessment. While in Geneva, the NCC delegation also met with the trade ministers of Burkina Faso and Benin. In other meetings, the NCC delegation pointed out that China's choice of policy structure to support prices to their growers was pushing up Chinese mill prices and encouraging the use of polyester in that country. The delegation also reported that cheap yarn prices coming out of India was disrupting raw cotton sales in world markets.
The NCC reiterated its support for the continuation of the USAID outreach program for West African growers and continued funding for the West African Cotton Improvement Program. The NCC hosted a meeting in Washington, DC, with a special delegation of West and Central African ministers, ambassadors and other distinguished officials. The discussions focused on building a foundation for enhanced communication and establishing the necessary groundwork for cooperation on issues of mutual interest.
After indications of possible re-engagement of the Doha negotiating agenda, the NCC emphasized that the U.S. cotton industry would continue to push that any changes to the cotton program must be part of and not in advance of an overall, comprehensive agreement.
The NCC also worked for a successful outcome on a countervailing duty case in Peru. The Peruvian commission – the National Institute for the Defense of Competition and the Protection of Intellectual Property -- launched an investigation into claims that U.S. subsidies have caused injury to Peruvian cotton growers. The NCC was involved in every aspect of the case and hired a leading law firm in Lima to represent U.S. cotton's interests in the proceedings.
Free Trade Agreements
A new global coalition of fiber, textile and apparel groups, that included the NCC, wrote to Ambassador Ron Kirk of the U.S. Trade Representative's (USTR) office urging that the Trans Pacific Partnership (TPP) negotiations include pro-job, pro-private industry and pro-export rules in the ongoing textile talks in the final TPP agreement. The coalition, the Textile and Apparel Alliance for TPP (TAAT), was formed because one TPP partner country – Vietnam – was demanding new rules on textiles that would put U.S. jobs, factories and exports in jeopardy. The Alliance represents nearly two million agricultural and manufacturing workers from 30 countries and a supply chain that exports $25 billion in two-way textile and apparel trade each year.
The TAAT expressed deep appreciation to the 76 U.S. Representatives who sent a letter to USTR Ambassador Kirk stressing the need for job-creating textile rules in the TPP. Led by Representatives Trey Gowdy (R-SC) and Larry Kissell (D-NC), the signatories -- many from Cotton Belt states -- pledged to work with USTR to ensure a positive outcome for the textile and apparel sectors in the negotiations. In a statement to news media, NCC President/CEO Lange noted that the NCC consistently has pursued a yarn forward rule of origin for textile and apparel products. He said the overall goal was stemming the losses in the U.S. cotton spinning industry, as textile import quotas were phased out beginning in 1995 and China was granted full accession rights to the WTO in 2001.
The House and Senate approved NCC-supported legislation (H.R. 5986, S. 3326) extending the third-country fabric provisions of the Africa Growth and Opportunity Act and sanctions on Burma. The legislation also included technical modifications to the U.S.-Central America-Dominican Republic Free Trade Agreement.
Under the U.S.-Korea Free Trade Agreement that went into effect in March, almost two-thirds of U.S. agricultural exports to Korea became duty-free.
Throughout the year, cotton industry leadership and staff of the NCC, the American Cotton Shippers Association (ACSA), AMCOT and the National Council of Textile Organizations (NCTO) had meetings with Congressional Members and officials from USDA, the Office of the USTR, and the U.S. State Department to convey concerns about the serious situation facing the U.S. cotton industry regarding export sales that are either in default or at risk of default. Administration officials agreed to form an inter-agency task force that could work with the cotton industry on the matter.
U.S. cotton leaders also urged U.S. officials: 1) to pressure their foreign government counterparts, 2) emphasize the crucial importance of contract sanctity as a cornerstone of international trade and 3) warn that a failure to enforce contracts would disrupt international trading relations and undermine support for future trade agreements. The cotton leaders suggested that U.S. officials use the leverage of trade preference discussions to impress on foreign government officials the importance of honoring contracts and that if U.S. government agencies were sourcing products from suppliers in default that future purchases from those sources be terminated.
A NCC leadership team visited China to convey U.S. cotton’s commitment to delivering high quality cotton in a timely manner.
A NCC leadership team to China gathered information from that country's cotton industry officials and conveyed the U.S. cotton industry's continued commitment to deliver high quality cotton in a timely manner.
The visit, coordinated by Cotton Council International, was part of the ongoing exchange between the two countries as established by a 2006 Memorandum of Understanding. The delegation was led by American Cotton Producers (ACP) Chairman Clyde Sharp, a Roll, AZ, producer. Others included NCC Secretary-Treasurer Sledge Taylor, a Como, MS, producer/ginner; NCC Director Allen McLaurin, a Laurel Hill, NC, producer; ACP Vice Chairman Barry Evans, a Kress, TX, producer; ACP Oklahoma State Chairman Danny Robbins, an Altus producer; Farmer's Cooperative Compress CEO Ron Harkey, a Lubbock, TX, warehouseman; CCI Director Kent Fountain, a Surrency, GA, ginner/warehouseman; CCI Director Hank Reichle, a coop marketer with Staplcotn, Greenwood, MS; and NCC Delegate Jeff Johnson, a merchant with Allenberg Cotton, Cordova, TN.
USDA Deputy Under Secretary for Farm and Foreign Agricultural Services Darci Vetter toured Bob Walker’s West Tennessee cotton operation.
In other trade activities:
- NCC President/CEO Mark Lange reported on current cotton industrial development trends in the United States and global market at the fourth COTTON USA Cotton School in Qingdao, China – which was attended by some of the largest textile manufacturers from China, Hong Kong, Taiwan, Thailand and Vietnam. The participants also received a comprehensive understanding of the U.S. cotton industry in terms of planting, production, ginning, classification, trade, contract sanctity and raw cotton purchase.
- USDA Deputy Under Secretary for Farm and Foreign Agricultural Services Darci Vetter updated NCC directors on current trade policy issues at the NCC's Mid-Year Meeting in Memphis and toured nearby cotton operations to gain a better understanding of the industry.