The New Agricultural Trade Negotiations: Background and Issues for the U.S. Cotton Sec

New multilateral trade negotiations under the World Trade Organization (WTO) were initiated for agriculture in 2000. International trade is particularly important for cotton, since 30 percent of the world’s consumption of cotton fiber crosses international borders before consumption by textile mills, and, through trade in yarn, fabric, and clothing, much of the world’s cotton crosses international borders at least once more before reaching its final consumers. Traditionally, cotton’s global import barriers have been low, and export subsidies have been largely negligible. Textile trade, however, has long been subject to government intervention across the world, indirectly affecting cotton. Furthermore, export restrictions by cotton-producing countries have been common in the past, as governments indirectly subsidize textile output by assuring their domestic textile industries of preferential access to locally produced cotton. Textile policies are an important concern of developing countries, and could receive further scrutiny in any future WTO round. Other WTO issues related to cotton trade include China’s accession to the WTO, the accession of Central Asian cotton exporters such as Uzbekistan, the role of State Trading Enterprises (STE) in these and other countries, and domestic support for agriculture.