The US Cotton Industry Group Says The Chinese Government's Cotton Subsidy Policy Violates The WTO Rules.

According to Reuters New York On October 10th, the US cotton association (NCC) said that the Chinese government's cotton subsidy policy violated the global trade rules, and called on the US regulators to investigate the level of subsidy in China. This is a sign of increasingly fierce competition between the two big powers and the global market.

NCC testified to the US Trade Representative Office (USTR) on 1 October that the price of the Chinese government to cotton growers under its agricultural policy exceeded the provisions of the World Trade Organization (WTO).

NCC chairman Wally Darneille said, "the assessment of recent policies shows that China has greatly violated its commitment in the WTO agreement." He also served as chairman and chief executive officer of Plains Cotton Cooperative Association, one of the largest cooperative and marketing organizations of crop growers in the United States.

NCC estimates that the Chinese government's subsidies exceed the stipulated level, that is, 8.5% of the national crop output value in the past four years. According to NCC's estimate, subsidies in 2014 were equivalent to 29% of output value, and over 30% in 2012 and 2013 respectively.

The organization did not require a comprehensive consultation between the two countries. However, it hoped that USTR would assess China's Cotton Subsidy data and publicly put pressure on regulators to solve the problem of cotton subsidies in China.

" Whereas Market conditions (and) subsidies, we need to ensure that regulatory authorities are familiar with the situation, "Gary Adams, vice president of NCC's economic and policy analysis department, told Reuters on Friday.

It is at the moment of global cotton industry turbulence. As China halted the cotton purchase and storage program that has been supporting for many years and supported global prices and demand, cotton prices have fallen by 1/3, leading to the loss of most cotton farmers in the United States.

The Chinese government implemented Cotton Subsidy to replace the purchase and storage plan, and said that no more cotton import quotas [nL3S0RN2VX] would be issued in 2015. This raises market concerns that global cotton stocks will surge due to the fall in demand in China. China is the biggest buyer of cotton in the world.

In previous years' hearings, NCC focused on the lack of transparency in China's policy plan.

"NCC is obviously carrying out basic work and providing relevant facts for USTR to illustrate the need to solve the problem of subsidized cotton farmers in China," said Joseph Laroski, lawyer of international trade division of King & Spalding, who previously served as general counsel of USTR. Laroski said that the future action may be consultations rather than formal trade lawsuits, "he said. they It provides specific reasons for USTR to give priority to this matter. "

The Chinese government announced the new cotton policy last month. These policies will help the government to reduce the huge cotton reserves up to 10 million tons.

Before the implementation of the new cotton policy in China, the United States and Brazil reached an agreement after 10 years of controversy over the issue of cotton subsidies in the United States. The case led the us to amend its cotton policy and reached a $300 million settlement.