Late Wednesday, the U.S. House of Representatives approved legislation that will repeal the Step 2 cotton support program.
Repeal of the Step 2 program was part of the Deficit Reduction Omnibus Reconciliation Act of 2005. It repeals the program beginning August 1, 2006. The next step is for the President to sign the measure into law. "Repeal of this program addresses two important trade priorities. It implements findings in the WTO dispute brought by Brazil, and it fulfills commitments made at the recent Hong Kong Ministerial to eliminate export subsidies for cotton by 2006," explains U.S. Trade Representative Rob Portman.
The repeal implements recommendations and rulings of the WTO in the dispute brought by Brazil against certain U.S. agricultural programs, principally related to cotton. It terminates export subsidies and import substitution subsidies cited by the WTO. It also addresses a WTO finding regarding suppression of world cotton prices.
A statement from USTR says repeal of the Step 2 program is also consistent with the development goals of the Doha Development agenda, which calls for developed countries to eliminate all forms of export subsidies for cotton in 2006. It responds to concerns raised by African and other trading partners and fulfills the commitments made at the Hong Kong Ministerial in December 2005. The U.S. Senate approved identical legislation at the end of 2005.
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