WTO Rejects Farmer Subsidies; U.S. to Fight Trade Ruling

The Washington Times (Washington, DC), April 27, 2004 | Go to article overview

WTO Rejects Farmer Subsidies; U.S. to Fight Trade Ruling


Byline: Jeffrey Sparshott, THE WASHINGTON TIMES

The World Trade Organization yesterday said the United States is breaking international trade rules when it pays its farmers to produce cotton, officials in Brasilia, Brazil, and Washington said.

The ruling, a preliminary decision, would be the most serious attack on agriculture subsidies at the WTO to date if it broadly favors the South American nation.

The WTO, Brazil and the United States would not release the decision, but in Brasilia, officials held a press conference to say they were "satisfied" with the WTO dispute-resolution panel's report.

"They agreed with some of our arguments," said Clodoaldo Hugueney, a top economic official with Brazil's Foreign Ministry.

A U.S. trade official said U.S. farm programs are consistent with WTO rules.

"We have serious concerns with aspects of the panel report. We will be closely reviewing the report, and if the final report remains unchanged, we will appeal," said the official, who spoke on the condition of anonymity.

The United States pays farmers about $3 billion a year to grow and market cotton, a practice that helps American farmers sell their product overseas.

Brazil complained that the subsidies caused overproduction and depressed international prices, limiting its ability to compete. The WTO in March 2003 convened a panel to hear the case.

Yesterday's ruling will not be finalized until mid-June, although preliminary decisions generally don't change from the time they are given to governments until they are publicly released.

A U.S. appeal would give the Bush administration a chance to present its case to another set of judges. …

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