U.S. challenges India’s market price support for cottonU.S. challenges India’s market price support for cotton
U.S. submits counter-notification to WTO Committee on Agriculture seeking additional information on how India sets cotton price supports.
November 14, 2018
U.S. Trade Representative Robert Lighthizer and Agriculture Secretary Sonny Perdue announced Nov. 13 that the U.S. submitted a counter-notification to the World Trade Organization's Committee on Agriculture (COA) on India’s market price support for cotton. The U.S. has been calling for WTO reform to improve the review process of its various committees.
To continue to improve transparency in WTO, on Nov. 9, 2018, the U.S. filed its second COA notification under the WTO Agreement on Agriculture regarding another country’s measures.
Based on U.S. calculations, it appears that India has substantially under-reported its market price support for cotton. When calculated according to the WTO Agreement on Agriculture methodology, India’s market price support for cotton far exceeded its allowable levels of trade-distorting domestic support.
The U.S. has identified several areas of potential concern with India’s notification of its market price support for cotton. These include issues with the quantity of production used in market price support calculations, exclusion from India’s notifications of information on the total value of production of cotton (information necessary to assess compliance with WTO commitments) and issues with currency conversions.
The counter-notification covered the 2010-11 through 2016-17 marketing years, when India’s minimum price support payments ranged from 53% to 81% of the cotton production value.
The National Cotton Council thanked the Administration for pushing counter-notifications as a necessary step to bring needed transparency to India’s domestic support programs, which is especially important to understanding global cotton markets and the wide-ranging impact these programs have on global cotton and fiber markets.
The U.S. expects a robust discussion on how India implements and notifies its policies at the next COA meeting, which is scheduled for Nov. 26-27, 2018.
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