National Cotton Council Chairman Woody Anderson must still be shaking his head. Days after Anderson wrote the U.S. Trade Representative asking him not to allow cotton to be singled out in the Doha Round negotiations Robert Zoellick sounded like he was doing just that.
The cotton industry has become the whipping boy for international organizations that believe farm subsidies reduce crop prices in developing nations. The U.S. cotton program took the brunt of the blame for last fall's collapse of the Doha Round negotiations after countries led by Brazil tried to push through a separate provision for cotton.
Anderson, a cotton producer from Texas, was responding to reports that WTO General Council Chairman Shotaro Oshima's framework package for restarting the Doha negotiations included a specific heading for cotton apart from the agriculture negotiations.
Rather than separating cotton, Anderson asked Zoellick to try to move cotton back under agricultural negotiations in the World Trade Organization talks that began in Doha, Qatar, in 2001.
A few days later, Zoellick, speaking during the G-90 meeting of trade ministers in Mauritius, promised to push for reforms of the U.S. cotton program. “We know this is of primary concern to a number of countries,” he noted, “And I want you to know that I'll push for reforms, too, at home, as well as in the international context.”
Zoellick tried to link the cotton issue to a general reform of trade-distorting subsidies and barriers to market access for all commodities. By promising to reform the U.S. cotton program, however, he may have added fuel to the fire that seems to keep simmering in Africa's cotton-producing countries.
Anderson's letter stressed that U.S. leaders will not support any negotiating process that continues to single out cotton based on outdated information and flawed analysis such as that used by Brazil in its WTO complaint against the U.S. cotton program.
He stressed that theme in speeches in Texas and New Mexico in mid-July, rebutting the arguments made by a University of California agricultural economist in the Brazilian complaint.
Although Brazil claims the U.S. cotton program harmed Brazil's cotton producers, Anderson noted that U.S. cotton production is declining while Brazil's last cotton crop was 85 percent larger than its 2001 crop.
In another speech, Gary Adams, NCC vice president of economics and policy analysis, said expected global cotton production — primarily in China and Brazil — has pushed down world prices and “will exacerbate the economic stress being felt by cotton producers.” Adams said recent forecasts by USDA and the International Cotton Advisory Committee project a record world cotton crop of 102 million bales for 2004-05, a 9 percent increase over 2003-04.
Referring to Brazil's complaint, Adams said “I can't help but question the basis of that analysis. The market we are seeing unfold shows very clearly that as China goes, so go world markets. It also demonstrates that Brazil has tremendous potential to increase cotton production.”