- The recent U.S. cotton issue has its origin in a dispute between U.S. and Brazil over U.S. cotton subsidies that was filed with the WTO in 2002. Two years later, the WTO found the U.S. cotton subsidies were illegal.
Alarming comments by a Brazilian cotton grower delegation visiting Washington, D.C., have prompted the National Cotton Council to respond. Backed by a favorable World Trade Organization ruling and the threat of cross-retaliation, several Brazilians were quoted in a Reuters report saying the new farm bill is unlikely to address their concerns.
Further, another official said the situation had placed Brazil, “in the position where there are no options left but retaliation.” Such retaliation could mean $830 million in sanctions placed on all sorts of U.S.-made products.
The issue has its origin in a dispute between the nations over U.S. cotton subsidies that was filed with the WTO in 2002. Two years later, the WTO found the U.S. cotton subsidies were illegal.
The situation was finally resolved through a 2010 deal between the nations. That accord calls for Brazil cotton interests to receive $150 million in annual payments from the United States.
However, due to the sequester and lack of a new farm bill, the monthly payments to the Brazilians ceased last fall. Now, increasingly agitated Brazilians say a final decision on whether to retaliate against the United States will come in late February.
The Jan. 15 NCC statement says the organization is, “deeply disappointed and disturbed by statements to the press made by representatives of the Brazilian cotton industry. If reports are accurate, a Brazilian cotton delegation visiting Washington has misrepresented the carefully negotiated agreement between U.S. and Brazilian grower organizations and wrongly portrayed the reformed cotton provisions in the farm legislation now being considered by Congress.”
Read entire article at Delta Farm Press.