US loses WTO Brazil cotton appeal

World Trade Organisation ruling means Brazil could demand trade sanctions on US

    Developing nations say US cotton subsidies price their own farmers out of the market [GALLO/GETTY]

    The US government is estimated to have paid its cotton farmers $2bn to $4bn in subsidies in most recent years.
     
    However, Tony Avirgan from the Economic Policy Institute, a non-profit think-tank, told Al Jazeera that the US government is unlikely to comply with the WTO ruling and has shown no inclination it will do so.
     
    Last month, US politicians voted to overturn a veto by George Bush, the US president, and approve a farm bill worth $290bn that will maintain many of the cotton payments for the next five years.
     
    US 'inconsistent'
     
    US cotton subsidies have become one of the most contentious issues in the WTO's Doha round of talks, which seek to open up world trade.
     
    Brazil filed the complaint with the WTO in 2002, alleging that by subsidising farmers the US had distorted the price of cotton and made it harder for developing nations such as Brazil to compete.
     
    The panel said the US "acts inconsistently with its obligations" as its subsidies for cotton producers are a "significant price suppression" that constitutes "serious prejudice" to Brazil.
     
    The ruling is the first successful challenge to a wealthy nation's domestic agricultural subsidies.
     
    However, US trade officials said they were disappointed with the WTO panel's ruling and rejected Brazil's complaint that the payments distort the global cotton market.
     
    "We believe that the changes made by the United States brought the challenged payments and guarantees into full compliance with the WTO's recommendations and rulings in the original cotton dispute,'' Sean Spicer, spokesman for the US trade representative, said.
     
    "There is no basis to say that US payments are today having any impact on cotton prices."

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Cricket World Cup 2019 Quiz: How many runs can you score?

    Cricket World Cup 2019 Quiz: How many runs can you score?

    Pick your team and answer as many correct questions in three minutes.

    Visualising every Saudi coalition air raid on Yemen

    Visualising every Saudi coalition air raid on Yemen

    Since March 2015, Saudi Arabia and a coalition of Arab states have launched more than 19,278 air raids across Yemen.

    Why did Bush go to war in Iraq?

    Why did Bush go to war in Iraq?

    No, it wasn't because of WMDs, democracy or Iraqi oil. The real reason is much more sinister than that.