U.S., Brazil to discuss complaint over cotton program

MEMPHIS, Tenn. -- Brazil and the United States have agreed to consultations Dec. 3-4 to discuss Brazil's World Trade Organization complaint against the U.S. cotton program. Representatives of the U.S. Trade Representative's office are expected to meet Brazilian officials in Geneva to review Brazil's complaint.

Because Brazil is in the process of forming a new government following the election of Luiz Inacio Lula de Silva as president on Oct. 27, the consultations may not contribute to a resolution, and the new Brazilian administration will have to decide whether to pursue the complaint.

Brazil initiated the WTO process by filing a complaint on Sept. 27 and requesting consultations with the United States, contending that the U.S. cotton program violates the WTO agreement because it has caused injury to the Brazilian industry.

Brazil also has challenged the cotton competitiveness program and the GSM credit guarantee program, alleging they are illegal export subsidies.

Kenneth Hood, National Cotton Council chairman, has responded that the United States is complying fully with WTO and has urged vigorous defense by U.S. officials.

In a related development, Brazil challenged the European Union sugar program and solicited support from the British-based charity Oxfam International, which published a report on Aug. 28 claiming EU sugar exports have driven less-developed countries from the market.

Oxfam also has released a document claiming the U.S. cotton program has impoverished West African farmers, and the World Bank's chief economist recently made the same charge.

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