WTO Cases • Volume 12 • Number 6 • 20th February 2008
US appeals compliance panel ruling in cotton dispute
The US has appealed a WTO decision which found that Washington had failed to comply with earlier rulings against US subsidies to cotton farmers.
Gretchen Hamel, a spokesperson for the US trade representative’s office, said the US was appealing the ruling because it believed that its cotton sector reforms had “brought its programs into full compliance with the WTO’s recommendations and rulings in the original cotton case.”
If it loses the appeal, the US could face trade sanctions from Brazil.
In the dispute, which dates back to 2002, both a WTO dispute panel and the Appellate Body ruled in favour of Brazil’s allegations that US support for domestically grown cotton, including subsidies and export credit guarantees,for cotton farmers violated the US’s WTO obligations (see BRIDGES Weekly, 9 March 2005).
In April 2005, the US said that it intended to comply with the rulings. Brazil however did not believe that the US had taken adequate measures to comply with the ruling and requested to have a compliance panel convened. In December 2007, the compliance panel ruled that the US had failed “to take appropriate steps to remove the adverse effects” of the subsidies and agricultural support programs provided to US cotton farmers. It found that the US had eliminated the ‘Step 2’ payments to mills and exporters to encourage them to buy more expensive US cotton. However, other subsidy programs had yet to be eliminated or brought into compliance with the WTO ruling.
ICTSD reporting; WTO Dispute Settlement Gateway; “US Files Appeal at WTO Over Cotton Subsidies Dispute,” AGENCE FRANCE-PRESSE, 14 February 20080; “Statement from Gretchen Hamel, USTR Spokeswoman, Regarding the Appeal of the WTO Final Compliance Panel Report in United States – Subsidies on Upland Cotton,” USTR PRESS RELEASE, 13 February 2008; “Brazil’s WTO Case Against the U.S. Cotton Program: A Brief Overview,” CRS REPORT FOR CONGRESS, 25 January 2008.
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