U.S loses subsidy battle over cotton

By Cara Hungerford

April 27, 2004: The United States cotton subsidies are giving U.S. farmers an unfair advantage in the world market the World Trade Organization ruled Monday night. The challenge which was brought to the WTO by Brazil could force the United States to lower the subsidies it pays farmers to grow cotton and, eventually most subsidized crops reported the New York Times, Monday.

Brazil argued that the subsidized payments made to American farmers violated international trade rules. They contended that the $300 billion in annual farm subsidies and supports paid by the world’s wealthiest nations have left farmers from Brazil and other developing nations trying to compete in a marketplace whose prices have been artificially driven down, the Times reported.

While this is only a preliminary ruling, the final decision will not be announced until June, as the first successful challenge of agricultural subsidies, the decision could force a meaningful discussion of farm-aid at summer trade talks. Nations have consistently locked over this contentious issue forcing trade talks to lay idle for over a year, according to the Times article.