US’s New Farm Bill with Cotton Subsidies Leads Brazil to Retaliate

Cotton According to Brazilian ambassador Roberto Azevedo, Brazil’s permanent representative at the World Trade Organization (WTO), “Brazil does not want to retaliate due to the United States cotton subsidies, but may be forced to do so.” 

The ambassador’s comment followed approval by the US House of Representatives of a new Farm Bill (the present bill expires in September) that maintains cotton subsidies and other farmer benefits that have been judged illegal by the WTO.

American cotton subsidies, which have been part of US legislation since 1934, are actually scheduled to increase in the new Farm Bill. For that reason, ambassador Azevedo expressed concern, calling the situation “uneasy.”

He said there was no convincing justification for American congressmen to have approved a bill that was even more harmful to Brazilian cotton growers than the former bill.

“Farming should be based on market forces, not government subsidies,” said Azevedo, as he pointed out that the new Farm Bill “distorts market competition.”

The ambassador reported that Brazil and the United States have been discussing the cotton subsidy controversy and the new Farm Bill in an effort to avoid Brazilian retaliation under provisions of a direct compensation ruling (that allows cross retaliation) by the WTO dispute settlement panel in 2004.

At the same time, under a framework agreement, the United States has been making monthly payments of US$ 12.275 million to the Brazilian Cotton Institute (IBA), as part of reparation payments to Brazilian cotton growers for losses due to US subsidies.

ABr

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  • Show Comments (2)

  • brucew

    Retaliate, they will
    I’m not sure you realize how much trade we do with Brazil. So far, I have worked in manufacturing forklifts that are shipped to brazil and oil/gas products that go there. With tarrifs on American products, brazil will go to china. This is a big deal and will cost Americans jobs.

  • usa cotton is the finest in the world

    retaliate ????? ha ha ha ha
    brazil retaliate ????.don,t make americans laugh anymore than we allready laugh at you, brazil. your a joke in the world not really taken that seriously .

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