from www.allagnews.com
Recently the U.S. Trade Representatives Office (USTR) announced that the United States would be challenging China in the World Trade Organization (WTO) due to their high corn, rice and wheat subsidies. It’s not the first challenge against China says Rep. Rick Crawford (AR-R), it’s the 14th since 2009 and relates to a slow implementation of WTO rules since their accession to the trade organization. But could this challenge actually help the prospects of the U.S. Congress passing a multi-nation free trade agreement?
“I think also in the broader picture of just the trade agenda within this administration there is still the opportunity for perhaps the Trans-Pacific Partnership (TPP) to be taken up by Congress later this year perhaps in the lame duck session” says Dr. Gary Adams President and CEO of the National Cotton Council (NCC). “So this sends a message there I think in terms of the administration’s willingness or desire to try to be tough on trade and show that trade enforcement actions will be taken.”
The road may be tough in the Senate though. “Since they negotiate the deals and they send them up, the president is a big, big player in trade,” Senate Majority Leader Mitch McConnell (KY-R) said at a recent news conference. “If we were going to have another discussion about trade, it would have to be led by whoever the next president is. Let’s just be honest about the political environment,” he said. “I believe if it were brought up this year it would be defeated anyway — leading you to raise the obvious question: If you’re interested in America still being in the trading business in the future, in what way is it advantageous to have a trade agreement go down?”
The 12-country deal encompasses about 40% of the global gross domestic product (GDP) and foreign leaders are warning “For America’s friends and partners, ratifying the TPP is a litmus test of your credibility and seriousness of purpose” says Singapore’s Prime Minister Lee Hsien Loong. Japan’s Prime Minister Shinzo Abe adds that “through the TPP, the U.S. can make clear its commitment to playing a leadership role in the growing Asia-Pacific.”
House Speaker Paul Ryan however is not giving any indication that he will allow the already negotiated agreement to come to the floor for a vote. Though the framework has been signed, it must be ratified by Congress before going into effect.
For the cotton industry, the important task ahead is enforcement. Adams says “we know there’s a tremendous amount of excess capacity out there in synthetic fibers. The total synthetic market is about three times as large as what the cotton market is so very definitely the things that are going on in synthetic need to be explored because, to the extent their subsidies and incentives are in place in those markets, (they) are having a direct impact on cotton and cotton prices”.
