WTO: US Cotton Program Changes Not Enough

By Scott C. Lucas|22 October 2007

The WTO dispute panel’s ruling in the case was issued confidentially in Geneva on Oct. 15, according to reports. Brazil released a statement supporting the ruling, and the office of the U.S. Trade Representative confirmed it.

The U.S. National Cotton Council (NCC) expressed its disappointment with the ruling. "We reiterate our concerns expressed when reports regarding the interim report surfaced," the NCC said, and added that U.S. actions taken to comply with the first WTO panel ruling in 2005 have had a significant impact on the country’s producers, with U.S. cotton acreage declining 29% in 2007.

"It is incomprehensible that a WTO panel could make a finding of serious prejudice against the United States when the international cotton market is strong," it said. "World prices are up, and production outside of the United States is estimated to be a record high of 102 million bales. In the face of these facts, the U.S. cotton industry is left to puzzle the basis of such a decision."

U.S. officials have said they believe eliminating the Step 2 payments, most of which went to U.S. merchants to reduce the cost of U.S. cotton in world markets, satisfied the original WTO panel ruling. However, Brazil and the C-4 countries of Benin, Burkina Faso, Chad and Mali have continued to denounce the U.S. cotton program as the chief cause of poverty in those West African countries.