US cotton associations seek govt help on contract defaults

The cotton industry leaders reported that contracts worth nearly $1 billion, covering sales of more than 4 million bales, are either in default or are at risk of default with little sign of resolution. The delegation explained that while the industry has worked diligently to utilize the internationally recognized arbitration system, far too many foreign mills have refused to honor eventual awards. Worse, in many cases, the host governments appear to be protecting the foreign mills from enforcement of awards, a concern exacerbated in cases in which the mills themselves are state owned.

 

U.S. cotton industry leaders met this week with senior U.S. government officials to discuss the serious financial losses accruing in all industry #

The delegation urged the U.S. officials to pressure foreign government counterparts, emphasizing the crucial importance of contract sanctity as a cornerstone of international trade and warning that a failure to enforce contracts will disrupt international trading relations and undermine the support for future trade agreements. The delegation also noted that other U.S. commodities, such as grains and oilseeds that are currently enjoying record prices, could be at similar risk in the future if the United States doesn't take a strong stand in defense of contract sanctity.

 

U.S. cotton industry leaders met this week with senior U.S. government officials to discuss the serious financial losses accruing in all industry #

The delegation suggested that U.S. officials use the leverage of trade preference discussions to impress on foreign government officials the importance of honoring contracts. They further suggested that if U.S. government agencies are sourcing products from suppliers in default that future purchases from those sources should be terminated.

 

U.S. cotton industry leaders met this week with senior U.S. government officials to discuss the serious financial losses accruing in all industry #

ACSA Chairman Ricky Clarke, a merchant with Cargill Cotton, a division of Cargill Inc., in Cordova, Tenn., said textile mills in several countries, including Bangladesh, Indonesia, Thailand and Vietnam, have defaulted on millions of dollars of raw cotton contracts that resulted in severe economic losses for U.S. cotton merchants and marketing cooperatives.

 

U.S. cotton industry leaders met this week with senior U.S. government officials to discuss the serious financial losses accruing in all industry #

 

U.S. cotton industry leaders met this week with senior U.S. government officials to discuss the serious financial losses accruing in all industry #