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US, Brazil agree on Framework regarding WTO cotton dispute

21
Jun '10
Brazil's Ministers reached a decision in support of a Framework regarding the Cotton dispute, which would avert the imposition of countermeasures of more than $800 million this year. This includes more than $560 million in countermeasures against U.S. exports which were scheduled to go into effect on Monday, June 21, 2010, as well as possible countermeasures on intellectual property rights that could have taken effect later. We are pleased with this decision, and look forward to signing the Framework soon.

The findings in the Cotton dispute concern U.S. cotton support under the marketing loan and countercyclical payment programs, and the GSM-102 Export Credit Guarantee Program. In line with these findings, the Framework has two major elements.

First, it would provide, as a basis for a discussion toward reaching a mutually agreed solution to the dispute, a limit on trade-distorting cotton subsidies. Second, the Framework would provide benchmarks for changes to certain elements of the current GSM-102 program. In the Framework, the United States and Brazil would agree to meet quarterly to discuss the successor legislation to the 2008 Farm Bill as it relates to trade-distorting cotton subsidies and the operation of GSM-102. The Framework would not serve as a permanent solution to the Cotton dispute. However, it would provide specific interim steps and a process for continued discussions on the programs at issue with a view to reaching a solution to the dispute.

“I am pleased that we have been able to negotiate a Framework regarding the WTO Cotton dispute that would avoid the imposition of countermeasures against U.S. trade, including goods and intellectual property,” said Ambassador Kirk. “While respecting the role of the United States Congress in developing the next Farm Bill, this Framework would now allow us to continue to work toward a final resolution of the Cotton dispute. I believe this Framework will go a long way in alleviating the uncertainty in our business communities and enhance the ability of the United States and Brazil to build upon our dynamic trading relationship.”

“This framework agreement provides a way forward as we work with Congress toward a new farm bill in 2012,” said Secretary of Agriculture Tom Vilsack. “Although it is not a permanent solution, I am pleased that it allows us to maintain our programs while considering adjustments and avoiding the immediate imposition of countermeasures against U.S. exports as a result of the WTO cotton decision.”

United States Trade Representative


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