What’s in a Name?
May 14, 2009 I believe it was William Shakespeare who said that a rose by any other name would smell just as sweet. I doubt the man had the 21st century global cotton trade in mind when he penned that now famous line from Romeo and Juliet, but he certainly hit the nail on the head for our intents and purposes.
A few weeks back, Group Editor Henry Gantz got a phone call from a European reporter looking for some insight into the world of cotton subsidies. Henry was certainly flattered that this woman chose him as a source of expertise on the American market. But reporter-to-reporter interviews always have a high probability for humor. And the subject of cotton subsidies seem to bring out a sense of guarded nationalism in everyone involved in our trade. Naturally, I eavesdropped through our office walls on the conversation.
“What other countries give as much to their cotton producers as the United States?” asked the European journalist.
“It would be easier for you to tell me which ones don’t,” said Henry.
Having been around the international cotton community for some time now, I was certainly familiar with both sides of this developing argument. I knew where Henry was going.
Just this week, we learn of China reducing export taxes on textiles. India did so not too long ago. Last week came the headline that Brazil was looking for $372 million from its government to assist its cotton producers.
Henry’s point was simple. Just because you may not call these things “subsidies” in name, their effect is the same. Savings are passed along through the market so that producers find it easier to grow cotton, and merchants are able to sell it at a lower price.
Obviously, being based in America and splitting time between Cotton International and our domestic magazine, Cotton Grower, we are more apt to hear the American side of this argument than the international one. That’s why I’d like to invite you to correct me if I’m wrong here. In the case of the Doha Round trade talks, is it fair for Americans to put caps on their subsidy programs while other nations are allowed to make indirect alterations to their market that ultimately benefit cotton producers, which in turn drive the price of cotton down?
Is a subsidy only wrong if it’s called a subsidy? I look forward to your response in our comments box.
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