The “Washington Insider” section of DTN (link requires subscription) reported on Friday that, “One of the program areas watched carefully in the farm bill debate was cotton, since the United States is still accused of failing to comply with the 2004 World Trade Organization case it lost to Brazil. Advocates argue that the final version of the farm bill changes to U.S. cotton subsidies to insurance and thus should comply. They also argue that since the changes have the stated goal of promoting a negotiated settlement to the longstanding dispute, the proposal should not be considered as illegally protectionist.
“In fact, Brazil is in the driver’s seat in this dispute since it won the earlier WTO case, but it has not yet taken a formal position on the bill. Still, a number of U.S. observers note that that Brazilian officials made plain their opposition to the new bill’s proposals by pointing out objectionable provisions and emphasizing that the farm bill still contains a substantial volume of trade-distorting subsidies for U.S. cotton growers.
“Separately, Brazilian Foreign Minister Luiz Alberto Figueiredo also told U.S. Trade Representative Michael Froman in a Jan. 30 meeting that Brazil was evaluating the bill to see if it protects Brazilian interests. In addition, the minister told the press that his government has not ruled out retaliation as a possibility.”