One of the most eagerly anticipated publications is not about Bush or Kerry or Clinton(s). It’s the official translation of the World Trade Organization panel’s ruling in Brazil’s complaint that it has suffered “serious prejudice” and economic injury from the U.S. cotton program.
The official translation, expected any day now, will confirm or deny media reports over the past few months that the panel’s decision was against the United States on substantive issues.
Even if that proves the case, it will mark just the beginning step in a long, long resolution process, says Mark Lange, National Cotton Council president and chief executive officer.
“The panel makes no prescriptive determinations,” he told members of the Cotton Foundation and the American Cotton Producers Association at their joint meeting in Albuquerque, N.M. “They won’t say, ‘And now you must do this.’”
Even after an appeals process, expected to go until late December or early January, and even if there weren’t issues involving the Doha trade negotiations, “there could be many years of deliberations by the U.S. government as to how it would respond,” he says.
“It just doesn’t happen quickly. The United States, if it wants to, could make fairly minor modifications to our farm program and say, ‘We’re done; we took care of it.’”
Given the aggressiveness of the U.S. Trade Representative’s office in prosecuting the issue, Lange says, “it would probably be their recommendation that the United States be absolute minimalists in whatever programmatic response that is developed.”
He cites the Uruguay Round of the General Agreement on Tariffs and Trade as an example of how slowly the negotiations mills grind.
“It was essentially completed in 1993, and all details as to how each country would implement the agreement were filed in Geneva in 1994. But the first meeting to start the round was held in 1986 — so it took eight years to get from there to a signed agreement, and only in the ninth year did implementation begin.”
Fallout from the Brazil case will involve “an extraordinary period of intense government-to-government negotiations, which in all likelihood will take several years,” Lange says.
“Then, there’ll be sort of a break, where all the governments go back and figure out how they’re going to do what they’ve agreed to. At that point, there will be commodity group interaction with the administration on specifics.
“So, we’re a long way from being able to talk about what implementation will mean in terms of impact on the farm program, Step 2, etc.”
Talk is circulating, he noted, that there will be a 20 percent reduction in agricultural spending in 2006, that the United States has already agreed to it.
“It has not — nothing like that has occurred. We’re a long way from knowing exact details. Keep in mind that it took three years of hard talks, almost weekly, on implementation of the tariff rate quota for cotton in the Uruguay round. That also tells you there’s a wide latitude possible even after a government-to-government decision has been made.”
When the WTO ruling becomes public, the council will “go into an aggressive mode,” Lange says, attempting to frame “what we believe to be the important components, how we think the panel ought to be resolving the issues, and pointing out what we think are serious flaws in their rationalization.”
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