WTO and US subsidies27 Apr 2004
An interesting bit of news for the cotton industry:
WASHINGTON, April 26 – Brazil won a preliminary ruling at the World Trade Organization on Monday night that could force the United States to lower the subsidies it pays farmers to grow cotton and, eventually, most subsidized crops.
The decision supports Brazil’s contention that the subsidies paid to American cotton farmers violate international trade rules. A final ruling against the United States could lead to stiff penalties if it fails to change its practices. In another recent case involving steel, President Bush chose to remove subsidies and therefore did not have to face the penalties.
The U.S. plans to appeal, of course, claiming it sets a precedent for other crops. Well, duh. This is great news, as far as I am concerned. For the reason why, see my post about corn subsidies.