Nothing Left To Trade

The U.S. cotton industry has given until it can give no more, NCC chairman says.

Published on: Jan 7, 2009

Though the World Trade Organization's Doha Round is quiet today, National Cotton Council Chairman Larry McClendon is convinced it will be resurrected – and that cotton again will be a target.

Especially if WTO Director-General Pascal Lamy sets the tone.

"What we don't want to see happen: we don't want the Lamy text to be the beginning point of the dialogue," McClendon said Tuesday during a meeting at the Beltwide Cotton Conference in San Antonio, Texas.

Lamy wants domestic support to drop from $22 billion to $14 billion. U.S. Trade Representative Susan Schwab says the current limit has been exceeded in six of the last 10 years. Going lower, McClendon says, is not an option.

If the intent of Doha was to shut down the U.S. cotton industry, then McClendon says, trade leaders simply should have sent them a registered letter 10 years ago.

"We feel like we've given way more than other industries have," McClendon says. "We've given the fat. Now we're down to flesh and blood."

The U.S. textile once was 10% of the global industry; today, it's 3%. China has 40%. But the U.S. must follow WTO rules as a developed country and China follows virtually none as a "developing" country. Developing countries have flexibilities, such as tariff lines, and they use them to gain trade advantages, McClendon says. The tariff lines are 5% of imports and can be designated by the country. Agricultural products, including cotton, most often are tapped.

"That might be 5% but it looks like 100% to cotton," McClendon says. "That's allowed all the developing countries to restrict market access."

And that's not what U.S. cotton was promised when the industry agreed to trade restrictions in early rounds. In exchanged for the domestic support cuts, the industry was promised global market access. With the tariff lines and other loopholes for developing countries, McClendon says, that's not happening.

"We think it's an open door to never have any market access," McClendon says. "We've ratcheted down support and gotten zero for it."