USTR Files Cotton Case Appeal

On Monday the U.S. Trade Representatives made a formal appeal to the World Trade Organization (WTO) ruling issued in September which criticized U.S. cotton programs.

The WTO Panel that heard Brazil's challenge of the U.S. cotton program ruled against the United States on many of Brazil's substantive points. The document, which became public in early September, found that the United States violated the Peace Clause; that the Step 2 program and the export credit guarantee program constitute prohibited subsidies; that direct payments do not qualify as "green box" payments; and that the presence of the domestic cotton program caused "serious prejudice" to Brazil's cotton interests.

William Gillon, the National Cotton Council's international trade counsel, says the NCC is hopeful that the Panel's initial ruling will be substantially revised by the WTO appellate body. He adds the appeal process will take several more months and even then, parties are given a reasonable amount of time in which to comply with any WTO rulings upheld on appeal.

The NCC stands behind the belief that more decoupled U.S. cotton program, a lower loan rate, a lower target price, a stable world market share, an unbiased economic study showing minimal price impacts prove cotton programs' innocence.