Bridges Trade BioRes • Volume 4 • Number 12 • 25th June 2004

WTO Panel Issues Final Report in US Cotton Case

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On June 18, the WTO panel on Brazil’s challenge against US cotton subsidies confirmed its findings in a final report issued solely to the parties to the dispute (see BRIDGES Weekly, 28 April 2004). According to WTO practise, the report will be available to the public after it has been translated into the three working languages of the WTO in the coming weeks. The panel affirmed that subsidies granted to US cotton farmers by the US government from 1999-2002 under various programmes, such as marketing loans, export credits, commodity certificates and direct payments, depress world market prices and are injurious to Brazil’s trade interests. The issued the US with a deadline of 1 July 2005 to withdraw them.

US officials have repeatedly criticised this ruling and insisted that it is unlikely to have any immediate impact on current farm programs, a view supported by the National Cotton Council (NCC) of America. Speaking to reporters, Woody Anderson, NCC chair, added that any changes to cotton programmes only will affect future cotton crops. Brazilian officials, however, expressed their satisfaction with the decision. Roberto Azevedo, the head of the trade dispute department at Brazil’s foreign ministry, was reported as saying that Brazil expects the US to comply with the ruling. The US is, however, determination to launch an appeal, a process that could drag on for over a year, especially if Brazil in turn challenges any compliance and implementation measures the US undertakes.

ICTSD reporting; “WTO Issues Final Ruling Condemning U.S. Cotton Subsidies; U.S. Plans Appeal,” WTO Reporter, 21 June 2004; “W.T.O. Rules Against U.S. Cotton Subsidies,” New York Times, 19 June 2004; “WTO Rules Against U.S. on Cotton,” United Press International 19 June 2004; “WTO Again Rules for Brazil in Cotton Row with U.S.,” Reuters, 18 June 2004; U.S./Brazil Dispute Final Report Expected, Press Release, National Cotton Council of America, 18 June 2004.