US delays WTO probe into its cotton subsidies

By Staff
|
Google Oneindia News

GENEVA, Sept 1 (Reuters) The United States on Friday exercised its right to delay a World Trade Organisation (WTO) probe into the billions of dollars it pays in subsidies each year to cotton farmers.

Brazil has asked for an investigation into whether Washington has abided by a landmark 2004 verdict in which the WTO ruled that much of the U.S. cotton programme is in violation of trade rules and demanded sweeping reform.

But the WTO allows members to block an initial request for a probe, although a trade panel is automatically set up at the second time of asking. Brazil has not said when it will make its second request.

''There is no panel yet,'' said one diplomat present at the WTO meeting.

The eventual investigation, to be ordered by the WTO's dispute settlement body, will take at least 90 days and could see Brazil winning the right to levy billions of dollars of retaliatory sanctions against U.S. goods.

Although Brazil has not said there is a link, the decision to press ahead with the request for a probe followed the suspension in late July of the WTO's Doha round of free trade negotiations.

The near five-year-old talks broke down over lack of progress in slashing rich nation agricultural tariffs and subsidies, and trade diplomats and experts warned it could lead to more disputes being brought to the WTO.

''It should be little surprise that a new global trade agreement -- the Doha round -- has stalled considering that the United States has failed to abide by rules of the last agreement,'' said Gawain Kripke, a senior policy adviser for aid agency Oxfam.

The U.S. Congress has repealed the 'Step 2' cotton programme putting an end to export subsidies and import substitution subsidies provided through aid to U.S. cotton millers buying domestic rather foreign cotton.

But Brazil said that this left a series of other programmes, ranging from so-called counter-cyclical payments to marketing loans and other assistance which it argues are also covered by the WTO ruling.

It has said that it could seek WTO authorisation for some billion in additional levies on U.S. goods if Washington is found to be at fault again.

According to Oxfam, U.S. subsidies to the country's 25,000 cotton farmers totalled billion in 2005 for a crop that was worth less than billion.

''These subsidies help to depress world cotton prices, hurting developing country cotton farmers including more than 20 million African farmers,'' the agency said in a statement.

REUTERS DKS KN1840

For Daily Alerts
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
X