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NCC throws support behind ‘improved’ DR-CAFTA

The National Cotton Council’s board of directors has voted to support the Dominican Republic-Central American Free Trade Agreement after Bush administration officials “satisfied their concerns” about the document.

The NCC becomes the last major commodity organization to endorse the trade pact. The National Corn Growers Association, American Soybean Association, USA Rice Federation and Farm Bureau have been behind it since its initial signing in December 2003.

Council members voted at their annual meeting in January to recommend passage if DR-CAFTA negotiators reduced the adverse effects of third-country participation in duty-free sales of textile products to the United States, and the Bush administration continued to address other Council trade priorities.

“Our board reviewed developments over the past several months and concluded that the conditions specified in the late January resolution have been satisfied,” said NCC Chairman Woods Eastland, a cooperative marketing executive from Greenwood, Miss. “The agreement is essential for preserving our current trade with the DR-CAFTA countries, particularly in light of the elimination of all textile quotas last Jan. 1.”

The May 9 vote reflects another break in a solid front of textile manufacturing and labor opposition to DR-CAFTA. Earlier, the board of directors of the National Council of Textile Organizations also decided to switch its support to DR-CAFTA.

Although the National Cotton Council had joined with other textile industry groups in press conferences criticizing DR-CAFTA, NCC officials have said for some time they believe a “good” CAFTA will be beneficial to the U.S. cotton and textile industries. “Good” was defined as not allowing countries like China to trans-ship products through CAFTA members to the United States.

The resolution passed by the board of directors May 9 said the NCC urges Congress to endorse the Central American Free Trade Agreement because it would provide the “best opportunity for supplying apparel manufacturers and other end-use manufacturing industries in the Western Hemisphere with U.S.-produced cotton fiber, cottonseed, cottonseed products and U.S.-produced cotton textile products.”

It also asked the Bush administration to continue to address the trade priorities of the U.S. cotton industry, including taking appropriate action regarding increased competition for U.S.-produced textiles.

In 2004, U.S. merchants shipped more than 200,000 bales of raw cotton to the DR-CAFTA countries — Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. The figure accounted for more than 90 percent of raw cotton consumption in those countries.

U.S. exports of yarn and fabric reached more than 2.5 million bale equivalents of cotton textile products or more than 50 percent of total U.S. cotton textile product exports in 2004.

“It has been a long-standing view that a good Western Hemisphere trade agreement is vitally important to the U.S. cotton and textile industries,” said John Pecheu, chairman of the American Cotton Producers, and a farmer in Tranquility, Calif.

“Already some 80 percent of the cotton consumed by U.S. mills depends on cut-and-sew operations outside the United States, primarily in Central America and Mexico and that dependence will continue to grow. The DR-CAFTA agreement will certainly improve our competitiveness in the textile and apparel arena.”

Council leaders said they believe DR-CAFTA will be approved and that they look forward to working with Congress, the administration and the National Council of Textile Organizations toward adopting and implementing the agreement and insuring “that the potential benefits to U.S. cotton and textiles are not subsequently diminished as other trade agreements are negotiated.”

The American Manufacturing Trade Action Coalition, meanwhile, reiterated its opposition to DR-CAFTA, calling it a “job killer” for U.S. manufacturing and the U.S. textile industry, in particular.

“AMTAC cannot support any trade agreement designed to outsource domestic manufacturing jobs,” the umbrella organization for a number of textile manufacturing groups said in a statement. “Trade deals like CAFTA are why the United States ran a $617 billion trade deficit in 2004 and has lost nearly 3 million high-paying manufacturing jobs in the last five years.”

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