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Cotton Council's high wire act

It's not that the National Cotton Council of America isn't accustomed to walking a tightrope — it's been trying to harmonize the interests of cotton merchants and producers for more than 60 years. But the Council's latest death-defying act — figuring out how to juggle slowing the growth of China's textile exports to the United States with its newly voracious appetite for cotton — would test the mettle of even the most skilled high-wire artist.

In the short time since it became a member of the WTO, China has become the leading exporter of textile and apparel products to the United States. The sharp rise in imports — more than 600 percent in some categories — has cost U.S. textile workers hundreds of thousands of jobs.

Meanwhile, drought conditions in China have forced its textile mills to look abroad for cotton. Its purchases of 1.5 million bales in October helped push New York cotton futures above 80 cents for the first time since the mid-1990s.

“China is the 2,000-pound gorilla as far as the cotton trade is concerned,” Craig Brown, the NCC's vice president for producer affairs, told members of the Mid-South chapter of the National Agri-Marketing Association.

Brown noted that the Council has raised numerous concerns about the lack of compliance by China with its promises to buy 3 million bales of U.S. cotton annually for its textile mills. That has included imposing cumbersome neps and short fiber quality requirements on raw cotton imports.

“You may question our concern about China's import policy as they are currently importing cotton,” said Brown. “Our concern pertains to their raw cotton import policy when they don't necessarily need foreign stocks. We have so far had good success with Ambassador Robert Zoellick's willingness to raise these concerns.”

On the domestic front, the Council has joined with the American Textile Manufacturers Institute and other textile groups to try to persuade the Bush administration to enforce the safeguard provisions in China's WTO accession agreement.

“Our textile industry has made a case for four instances where surges have taken place in Chinese imports,” he said. “Our government has agreed to consider three of the four, and the administrative process is under way. We are encouraging Congress to urge the president to act promptly on these complaints.

“This will be even more important as we approach the phase-out of the Multi-Fiber Agreement, which will eliminate all quotas between WTO signatory countries in 2005.”

China's failure to honor its WTO accession commitments is not all that surprising. “Many trade experts claim that China is famous for signing agreements and then negotiating them as they are implemented,” one observer notes.

Analysts say China could purchase at least another 1.5 million bales of U.S. cotton before the latest flurry of buying is over. That would bring the current total to 3 million bales or almost half the amount U.S. textile mills are expected to buy this year.

Those numbers are a dramatic reminder of the challenges the cotton industry faces.


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