National Cotton Council (NCC) Chairman Woody Anderson says that the organization's review of the decision in the Brazil/U.S. World Trade Organization (WTO) cotton dispute indicates that the panel “made some surprising assumptions and reached conclusions we believe are not supportable.
“The National Cotton Council disagrees with the panel decision,” Anderson says. “We do not believe the U.S. — or for that matter any WTO member — intended that the WTO agreements would be interpreted as this panel has done. Now that the report has been publicly released, we are even more convinced that neither the facts, the economics nor the agreements support the panel's primary decisions. We look forward to a resolute appeal.”
Since 1992, Anderson notes, the U.S. cotton program has moved toward decoupling payments from production, has a lower loan rate for cotton and a lower target price. He pointed out that these changes show that the 2004 cotton program does not support cotton at a higher level than in 1992.
Gary Adams, NCC vice president for economic and policy analysis, says, “The panel's report will probably intensify the focus on the U.S. cotton program even during the appeal. This is unfortunate. While Brazil points an accusing finger at the U.S., we are seeing record cotton production throughout the world in 2004 led by dramatic increases in Brazil and China.”
Mark Lange, NCC chief executive officer, adds, “Their charges focus on one thing — increased U.S. expenditures under the cotton program. Without a doubt, the U.S. program is costing more than we would like, but these costs are a result of low world prices, not a cause of increased U.S. production.”