The World Trade Organization (WTO) Compliance Panel decision in the Brazil – U.S. cotton case was made public today. The National Cotton Council has not had the opportunity to review the opinion in great detail, but believes this ruling is unfortunate, does not adequately consider the changes in the U.S. cotton program that were made, and is inconsistent with both the current world cotton market situation and the U.S. cotton program's current operation.
NCC Chairman John Pucheu, a Tranquillity, CA, producer, stated, “The U.S. has already taken significant actions to comply with the first World Trade Organization (WTO) Panel ruling, including the elimination of a major component of the U.S. cotton program and a significant revision to the export credit guarantee program. We believe the Panel's ruling failed to appropriately evaluate the full impact of the elimination of Step 2.
More recent trends in the world cotton market demonstrate that the U.S. is not adversely affecting world prices. U.S. cotton acreage fell by 29 percent in 2007 and is expected to continue to decline in 2008. U.S. exports fell significantly in 2006 and have declined overall as a percent of world exports. It is not credible to assert that U.S. cotton is currently causing serious prejudice to anyone in the world cotton market.”
The NCC emphasized that while U.S. cotton acreage is the lowest since 1989, acreage is up in many major-producing countries around the world. Payments under the U.S. cotton marketing loan for 2006 are down more than 40 percent from 2004 and are expected to be zero in 2007.
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