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WTO rules against US cotton subsidies

by Tillmann Elliesen

The World Trade Organisation (WTO) has once more ruled that the United States must reform its support for cotton farms. Back in 2005, the WTO had declared US cotton subsidies a violation of international trade law, demanding that Washington change its policy. That has not happened sufficiently, however, as the Geneva-based trade organisation confirmed in December. In 2002, Brazil had challenged US subsidies before the WTO. Payments to US cotton farmers amount to as much as $ 4 billion a year. Experts believe they depress prices on the international cotton market, causing hardship to producers in other countries, for instance in West Africa. A spokeswoman for US Trade Representative Susan Schwab expressed disappointment at the WTO ruling. Washington is considering an appeal. If the USA fails to comply with the WTO ruling, Brazil can apply to enforce trade sanctions. (ell)