Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Thursday 02/20/14

NCC: WTO Dispute with Brazil Should be Over

The National Cotton Council issued a release Thursday saying the group considers the World Trade Organization dispute with Brazil over U.S. cotton subsidies to be resolved.

NCC's statement was in response to Brazil opting to request the WTO analyze the farm bill and the new Stacked Income Protection crop insurance plan, known as "STAX." In recent months, Brazil has continued to argue it would retaliate because the country's cotton leaders did not consider there to be enough reform in the farm bill.

“The farm bill makes several changes to cotton policy and the GSM 102 export credit program," said NCC Chairman Wally Darnielle. "These changes are significant, and we believe the matter is resolved. We are encouraged by statements by Brazilian officials which indicate a preference to resolve the case through continued discussions rather than retaliation. We encourage U.S. officials to continue to engage with their Brazilian counterparts to reach a resolution to the case.”

NCC noted Brazil has been reluctant to acknowledge policy changes to U.S. programs. The Obama administration also considers the WTO dispute resolved and as cut off the $147 million in annual payments that was going to Brazil to avoid trade retaliation on U.S. products.

The NCC responded then that the U.S. cotton industry had consistently demonstrated good faith efforts to resolve this case, including outreach to Brazilian growers. The NCC undertook unprecedented steps to urge Congress to terminate a program provision in 2006 and, subsequently in 2011, to support comprehensive reform of cotton policy as part of new farm law. The NCC noted then that when compared to current programs, cotton will be the only program crop in the new farm bill to either eliminate or reduce the price-triggered support levels. Further, as part of a Framework Agreement, the U.S. government has transferred nearly $500 million to the Brazil Cotton Institute for use in improving the Brazilian cotton industry.

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Posted at 12:55PM CST 02/20/14 by Chris Clayton
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