Brazilian cotton producers are waiting for the World Trade Organization (WTO) to release its report, in the next few days, on the panel convened last year by Brazil in opposition to the subsidies granted by the United States to American cotton growers.
The Executive Director of the Brazilian Association of Cotton Producers (Abrapa), Hélio Tollini, said he is optimistic about prospects for dismantling the protective mechanisms that have made it possible for the United States to gain control of 40 percent of the world cotton market.
Tollini declared that he thinks the United States, which, he claims, needs to revise its budget, may even abolish the subsidies prior to the end of the period within which it has the right to appeal following the publication of the report.
The United States spends US$ 3.5 billion annually on subsidies to cotton growers. In the panel, which began in March, 2003, Brazil challenged six domestic assistance and credit programs maintained by the American government.
The WTO rendered an opinion favorable to Brazil in April. If, however, the United States decides to appeal, the final ruling will only be issued in 2005.
Assuming that the WTO confirms its preliminary judgment””which is the most likely result, according to the directors of the Association””the United States will have a deadline for eliminating the subsidies.
“In the case of outside subsidies, this period is practically instantaneous, but, domestically, the process is slower, because it depends upon changes in the law,” Tollini explained.
Once this happens, the American share of the world market will drop to around 20 percent, Abrapa estimates. The other 20 percent can be supplied by Brazil, Australia, Uzbekistan, and other cotton-growing countries.
Brazil, which is expected to export 450 thousand tons of cotton this year, can assume third place in the world ranking of cotton exporters, in the estimate of the Abrapa director.
Production in the last growing year (2003/2004) amounted to 1.250 million tons, 48.1 percent more than in the previous harvest.
With crop management programs and heavy investments in research (conducted by Embrapa, the Brazilian Agricultural Research Company), cotton production and productivity in Brazil have been rising each year.
Reporter: Lana Cristina
Translator: David Silberstein