Pressure mounts on US in WTO cotton dispute

Pressure mounted on the United States on Monday to obey a world-trade ruling outlawing some of its multi-billion-dollar cotton subsidies. The World Trade Organisation (WTO) rubber stamped a ruling by its highest court, the Appellate Body, upholding a complaint by Brazil against the farm aid and set the clock ticking for Washington to comply. In the politically charged case, Brazil argued that the United States exceeded subsidy ceilings with its cotton support programmes, worth some $4 billion in 2001 alone.
The use of export credits also violated trade rules, the Appellate Body confirmed earlier this month in rejecting a US appeal against the findings of a WTO panel of trade judges, made public last year.
The US government, which has said only that it will work with Congress "on the next steps", has 30 days under WTO rules in which to say what it intends to do.
Addressing a meeting of the WTO's dispute settlement body, which unless all members object approves automatically the court's verdicts, Brazil's representative said he hoped that the United States would "fully and timely comply with the rulings".
Once Washington has said it will respect the verdict, it must negotiate on how much time it has to implement it. If the two sides cannot agree, then within three months the WTO itself will fix the implementation period, which normally would not be longer than 15 months.
On the issue of the export credits, along with compensation payments to US manufacturers for using higher priced domestic cotton, so-called Step 2 payments, Washington has less time, because the court set a maximum of six months.
Whatever the timeframes, US officials have warned that implementation could be difficult because of opposition to the WTO findings in Congress.
For this reason, they say that it would be easier to handle the cotton issue within the context of current negotiations to reform world farm trade, a key part of the WTO's Doha Round of free trade talks.
Brazil has countered that the rules that the United States broke were hammered out during a previous trade round in the mid-1990s, and that it has no intention of "paying twice" by having them put on the table again.