Interviews
NCC - India's subsidies major impediment to cotton trade
23 Apr '09
4 min read
Meanwhile, he said that amid continued attacks by other cotton-producing countries on the U.S. cotton farmer, there has been little appreciation or attention given to the changes in U.S. production and policies. In reference to Brazil's WTO cotton case against the United States, he noted that U.S. cotton programs have changed while U.S. cotton production has declined significantly and U.S. cotton exports have fallen.
“But, as U.S. cotton production has withdrawn, others, like India have stepped into the void, with increased production, exports and even increased subsidy programs,” he testified. “There has been no real, lasting price recovery. Smaller producers, like African producers, continue to suffer from a lack of profitability.”
The economist also testified about India's increased position as a net exporter of textile and apparel products – with the United States now the destination for about a fourth of those shipments. Conversely, U.S. cotton textile exports to India are minimal, a situation owing to India's significant subsidization of its textile industry. Further, given the discrepancy between India's bound and applied tariff rates, current WTO Doha Round tariff proposals would not increase access for cotton fiber into India, he said.
He added that given India's highly competitive and subsidized textile industry, the U.S. textile industry remains concerned about preferences extended under the Generalized System of Preferences (GSP) program. Currently, benefits to India are limited to certain hand-loomed and other specialized craft products.
“But, as U.S. cotton production has withdrawn, others, like India have stepped into the void, with increased production, exports and even increased subsidy programs,” he testified. “There has been no real, lasting price recovery. Smaller producers, like African producers, continue to suffer from a lack of profitability.”
The economist also testified about India's increased position as a net exporter of textile and apparel products – with the United States now the destination for about a fourth of those shipments. Conversely, U.S. cotton textile exports to India are minimal, a situation owing to India's significant subsidization of its textile industry. Further, given the discrepancy between India's bound and applied tariff rates, current WTO Doha Round tariff proposals would not increase access for cotton fiber into India, he said.
He added that given India's highly competitive and subsidized textile industry, the U.S. textile industry remains concerned about preferences extended under the Generalized System of Preferences (GSP) program. Currently, benefits to India are limited to certain hand-loomed and other specialized craft products.
National Cotton Council of America
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