According to a statement issued by ABRAPA, board members of ABRAPA recently met with Brazilian Ambassador to WTO Paulo Estivallet de Mesquita, also the director of the Economic Department of the Brazilian Ministry of Foreign Affairs (MFA), and requested him to seek for quick action from the WTO panel against the US farm bill.
At the meeting, president of ABRAPA Gilson Pinesso said that it was necessary to minimize the damage caused to Brazilian cotton producers as soon as possible, and not let the US farm bill cause more harm to them.
According to Mr. Pinesso, as per ABRAPA estimates, the US farm bill could bring distortions in prices of cotton as well as production by 7 to 13 percent, and it was necessary to take steps against the new farm bill.
The new farm bill passed by the US Government in February 2014 ended the subsidies provided by the US Government to cotton growers, but insurance programs offered under the new farm bill tend to cause even greater distortions in prices and cotton production than in the past, as per ABRAPA.
In 2010, Brazil had challenged US cotton subsidies at the World Trade Organization (WTO) and won authorization to receive US$ 831 million per year, with US$ 591 million in products and about US$ 240 million in intellectual property.
Through a memorandum of understanding (MoU), the US Government agreed to make an annual payment of US$ 147.3 million, in monthly installments to the Brazilian Cotton Institute (IBA), until the Farm Bill was passed, which would eliminate the long-standing subsidies that caused the dispute.
The last farm bill expired on September 30, 2013, and the US Government stopped paying its monthly installments to the IBA since September 2013.
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