The latest effort to restart the stalled Doha Round of World Trade Organization negotiations could easily be the end of the three years of talks rather than a new beginning, the chairman of the National Cotton Council said.
A draft WTO framework document released in Geneva July 16 contained several references to the U.S. cotton program with no accompanying comments on other subsidies or language that would improve market access in foreign markets.
“In many ways, the Doha Round is moving backwards for U.S. agriculture,” said Woody Anderson, a Colorado City, Texas, producer. “This most recent draft document is vague and general in too many respects, except in its references to U.S. programs that are being targeted by other countries.
“It is too much of a one-way document that may be the final gasp of the Doha Round if it is not significantly changed.”
Rep. Charlie Stenholm, D-Texas, ranking member of the House Agriculture Committee, said the draft document's market access provisions were not ambitious enough and that it singled out cotton unfairly.
“An analysis of this language indicates that it could allow as much as a quarter of the European Union's and 30 percent of Japanese tariff lines to be considered ‘sensitive products,’ which are shielded from aggressive tariff cuts,” Stenholm told U.S. Agricultural Ambassador Allen Johnson. “From the U.S. perspective, this approach would not produce the ‘substantial improvements in market access’ called for elsewhere in the draft.”
No other agricultural commodity is mentioned in the draft document, Anderson noted, but it includes four specific references to cotton and at least two other indirect references.
“It is stunning to us that the General Council of the WTO would issue such a draft and would continue to provide credence to the attempt to single out one U.S. agricultural commodity program for destruction,” Anderson said.
Charity groups such as London-based OxFam have led an international campaign seeking to fix blame on U.S. and European agricultural subsidy programs for lower commodity prices in African countries, including Burkina Faso and Mali.
The U.S. Environmental Working Group, a pseudo-environmental group, has also attacked U.S. commodity programs, obtaining lists of farm program payment recipients and displaying them on its Web site with no explanation of why the payments are received.
“The WTO draft unnecessarily singles out cotton,” Stenholm noted. “The United States has correctly insisted that cotton only be considered in the context of the wider agriculture talks or as a part of an initiative involving all competitive products. The fact that no other agricultural commodity is singled out in the draft highlights just how inappropriate it is that multiple references are made to cotton.”
Anderson said the Doha Round agricultural negotiations have degenerated into a blame game, with almost every paragraph in the draft document laced with efforts to punish the United States and exempt countries like Brazil, India and China from real changes, real increases in market access and real reforms.”
The Doha Round negotiations are stalled because participating countries left a Doha Round meeting in Cancun Mexico last September without being able to reach agreement on a proposal by a group of countries led by Brazil to force the dismantling of the U.S. cotton program.
Despite the claims of OxFam and the EWG, recent university studies show the U.S. cotton program has little impact on cotton prices. USDA and International Cotton Advisory Committee forecasts show China and Brazil are dramatically increasing their cotton acreage while that in the United States is declining.
A study by Texas Tech University indicates the U.S. cotton program has had only a marginal impact on cotton prices, while a complaint filed by Brazil with the WTO claimed it had caused production to increase by 35 percent and prices to fall by 40 percent.
“Efforts in the WTO negotiations to target U.S. cotton are unfair and threaten the round,” said Anderson. “At least the Derbez text tabled in Cancun contained formulas and gave the world an idea of which direction the negotiations were headed. This document makes little headway down the road toward a real agreement. We believe this process has swerved significantly away from the interests of the United States.”
In noting there have been several proposals with more detail than this text, Anderson said (1) the United States has signaled a willingness to be specific with respect to reductions in domestic support and (2) the European Union has committed to the elimination of export subsidies.
“What is missing is any specific statement from developing countries concerning real increases in market access,” Anderson said. “They have not put forward concrete proposals, and the process could grind to a halt as a result.”
According to Stenholm, the draft framework also calls for disciplines to insure that food aid is not used as a mechanism for surplus disposal.
“It is widely accepted that food aid is surplus, since it is not counted as part of domestic or international commercial sales,” Stenholm said. “This is why the Food and Agriculture Organization has established ‘Principles of Surplus Disposal’ that food aid countries must follow. The goal should be to prevent displacement of commercial sales by food aid, not to prevent food aid.”
“When confronted with such a vague document, it is easy for some to find good parts and a few words that support a particular position,” said Anderson. “But, when this attempt at a trade agreement is read in its entirety, it is clear it contains little in the way of equivalent commitments on market access for U.S. agriculture and takes this negotiation closer and closer to a give-away by the United States.”
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