Brazil Wins Cotton Export Credit Guarantee Decision

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The World Trade Organization’s Dispute Settlement Body has officially recognized the August 2009 Arbitration Panel finding. Under the ruling, Brazil can impose up to 147-million dollars annually in countermeasures related to the U.S. cotton program. The amount will vary from year to year based on a formula established by the Panel. Brazil has previously implied that it will be entitled to over 650-million dollars in retaliation, bringing total countermeasures of more than 800-million.

National Cotton Council President Mark Lange says, - although commonly referred to as the cotton case, the U.S. export credit guarantee program accounts for a large amount of the total damage award claimed by Brazil. Still, NCC Chairman Jay Hardwick believes, - it is astonishing to think to that anyone would conclude today that U.S. cotton production is damaging Brazilian cotton interests.

In September, the Council joined 34 other agricultural organizations in a letter to the U.S. Trade Representative urging the United States to seek a new WTO compliance panel to update the ruling on the GSM-102 export credit guarantee program. The Council believes the WTO’s decision does not reflect changes made to the program since 2005. Also, the ruling does not appreciate the market and policy changes for U.S. cotton since 2005.