The National Council of Textile Organizations, the U.S. textile industry's main lobbying group, is calling on the Obama administration to challenge India's decision to restrict its cotton exports to ensure lower prices for its own textile industry.
In a letter to U.S. Trade Representative Ron Kirk, NCTO notes that India's decision created an unprecedented surge in worldwide cotton prices which have nearly doubled from 62 cents per pound to $1.20.
"We believe that the Indian actions are discriminatory and violate Article XI of the [General Agreement on Tariffs and Trade] GATT agreement which prohibits export bans that benefit domestic industries," the letter said. It said that India was favoring its domestic textile industry by diverting cotton at lower prices through an illegal dual pricing program for its domestic producers. The General Agreement on Tariffs and Trade was the predecessor to the World Trade Organization.
In its latest world supply and demand estimates, USDA projects that U.S. cotton production this year will reach 18.87 million bales and that just over 80 percent of that amount will be exported. A standard bale of cotton has a net weight of 480 pounds.
