The U.S. on Friday blocked a request by Brazil in the World Trade Organization in the dispute between the two countries over American cotton subsidies.
Brazil had asked for a WTO compliance panel to examine its grievance that Washington has failed to fully implement earlier rulings that found U.S. cotton subsidies breached global trade rules.
But the U.S. told a session of the WTO’s Dispute Settlement Body that it has “fully implemented” the WTO recommendations and rulings of 2004 and 2005 and insisted that it considers Brazil’s request for a compliance panel “is unnecessary and without basis.”
The U.S. told delegates to the global trade oversight body that it had repealed the so-called “Step 2” program, had stopped issuing guarantees for two export credit programs and had overhauled the one export program that remains in operation.
However, Brazil said it considers with respect to some programs “the U.S. has no implementation measures at all, and that the implementation measures that it has adopted fall short of compliance.”
In particular, Brazil asserts in its request that U.S. marketing loan and countercyclical payment programs under the Farm Security and Rural Investment Act of 2002 have undermined the interests of its exporters. It believes payments under those programs continue to breach the WTO’s rulings.
Brazil claims the measures have caused significant price suppression in the world market for upland cotton and helped increase the American share of the global market during the marketing year 2005.
Under the WTO’s streamlined dispute settlement rules, the establishment of a panel is automatic upon a second request to the DSB. The next DSB meeting is slated to be held on Sept. 28.