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New farm bill may resolve Brazil-US cotton subsidy wrangle

28
Jul '12
After a number of bouts of war of words between USA and Brazil, it seems that the contentious issue of subsidies paid to US cotton farmers may be resolved in September. It will also mean that, Brazil may not impose WTO-sanctioned reprisals on the United States.

“The US Congress is expected to pass a new Agriculture Bill in September which may take care of the concerns raised by Brazil over payment of huge subsidies to US cotton farmers”, a source in the Brazilian government, familiar with the developments told fibre2fashion.

He said, “The US pays subsidies amounting to around US $147 million every year, which undermines the interests of Brazilian cotton farmers. The WTO authorized Brazil to impose reprisals amounting to the same amount on import of any goods or services from the US”.

“However, the new Agriculture Bill which is expected to be approved in September by the US Congress takes care of our concerns. So, if the bill is passed, Brazil will not need to take actions as approved by WTO. We will wait till September and then plan the next course of action”, he informed.

A decade ago, Brazil challenged the US at the WTO, with claims that the US heavily subsidized its cotton farmers, which dragged down prices of the white gold, making it difficult for Brazilian cotton farmers to generate profits. They said the subsidies were in contravention of WTO rules. 

Brazil is the fourth largest producer of cotton in the world after China, Indian and US and produced around 2 million tons in the previous cotton season. 

Fibre2fashion News Desk - India


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