U.S. groups praise Brazil cotton case resolution
October 01, 2014 | 03:21 PM
The National Cotton Council, the American Farm Bureau Federation and the National Foreign Trade Council today praised the agreement that U.S. Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack announced today to settle the longstanding cotton dispute between the United States and Brazil in the World Trade Organization (WTO).
The agreement was scheduled to be formally signed this morning in Washington after Brazilian Agriculture Minister Neri Geller and Foreign Minister Luiz Alberto Figueiredo traveled to the U.S. capital to finalize details, Reuters reported.
The agreement was finalized only days before Brazilian presidential elections in which President Dilma Rouseff has pulled ahead, Blooomberg reported.
Under the agreement, the U.S. government will make a $300 million payment to the Brazilian Cotton Institute and in turn the Brazilian government will give up its right to impose retaliatory tariffs on $830 million in U.S. products. A WTO panel had awarded Brazil that right on the grounds that certain U.S agriculture programs violated U.S. WTO commitments. (See link to the memorandum of understanding between Brazil and the United States.)
“Under the terms of the agreement, Brazil will terminate the cotton case, giving up its rights to countermeasures against U.S. trade or any further proceedings in this dispute,” USTR said in a news release.
“Brazil has also agreed not to bring new WTO actions against U.S. cotton support programs while the current U.S. farm bill is in force or against agricultural export credit guarantees under the GSM-102 program as long as the program is operated consistent with the agreed terms,” USTR added.
“I am pleased that the United States and Brazil have found a permanent resolution to the cotton dispute,” Froman said in a news release. “Today’s agreement brings to a close a matter which put hundreds of millions of dollars in U.S. exports at risk. The United States and Brazil look forward to building on this significant progress in our bilateral economic relationship.”
“Through this negotiated solution, the United States and Brazil can finally put this dispute behind us,” Vilsack said in the release.
“Without this agreement, American businesses, including agricultural businesses and producers, could have faced countermeasures in the way of increased tariffs totaling hundreds of millions of dollars every year. This removes that threat and ensures American cotton farmers will have effective risk management tools.”
The National Cotton Council, a U.S. group, immediately praised “the U.S. government’s successful efforts” to conclude the case and avoid retaliation.
The cotton case led to major changes in the cotton program in the 2014 farm bill. NCC Chairman Wally Darneille noted that the industry has undertaken extensive efforts to resolve this case, and that NCC had supported changes to the program.
“The new U.S. farm bill includes several necessary changes to cotton policy and the GSM export credit program,” Darneille said. “When compared to previous programs, cotton policy is more market-oriented with the primary safety net conveyed through insurance products that must be purchased by the producer.”
“With the conclusion of the case, the U.S. cotton industry can bring a renewed focus to the challenges that lay in front of us,” he added.
The American Farm Bureau Federation “is pleased that the U.S. and Brazil have reached an agreement over Brazil’s complaint to the World Trade Organization regarding U.S. cotton and other agricultural programs,” President Bob Stallman said.
“This agreement brings certainty to cotton growers and all U.S. farmers that the current structure of commodity programs will remain intact,” Stallman said. “Farm Bureau appreciates the continuing efforts of Chief Agricultural Negotiator [Darci] Vetter, the Office of the U.S. Trade Representative and the U.S. Department of Agriculture to resolve this issue of importance to U.S. agriculture.”
The National Foreign Trade Council said, “The NFTC and its members support WTO compliance, and we are encouraged to see that the U.S.-Brazil agreement contains adjustments to the U.S. cotton program to make it more WTO compliant in the long term, rather than just a short-term fix.”
▪ Memorandum of Understanding Related to the Cotton Dispute
▪ Reuters - U.S. to pay $300 million to end Brazil cotton trade dispute
▪ Bloomberg - Rousseff Pulls Ahead as Brazil Front-Runner in Datafolha
The agreement was scheduled to be formally signed this morning in Washington after Brazilian Agriculture Minister Neri Geller and Foreign Minister Luiz Alberto Figueiredo traveled to the U.S. capital to finalize details, Reuters reported.
The agreement was finalized only days before Brazilian presidential elections in which President Dilma Rouseff has pulled ahead, Blooomberg reported.
Under the agreement, the U.S. government will make a $300 million payment to the Brazilian Cotton Institute and in turn the Brazilian government will give up its right to impose retaliatory tariffs on $830 million in U.S. products. A WTO panel had awarded Brazil that right on the grounds that certain U.S agriculture programs violated U.S. WTO commitments. (See link to the memorandum of understanding between Brazil and the United States.)
“Under the terms of the agreement, Brazil will terminate the cotton case, giving up its rights to countermeasures against U.S. trade or any further proceedings in this dispute,” USTR said in a news release.
“Brazil has also agreed not to bring new WTO actions against U.S. cotton support programs while the current U.S. farm bill is in force or against agricultural export credit guarantees under the GSM-102 program as long as the program is operated consistent with the agreed terms,” USTR added.
“I am pleased that the United States and Brazil have found a permanent resolution to the cotton dispute,” Froman said in a news release. “Today’s agreement brings to a close a matter which put hundreds of millions of dollars in U.S. exports at risk. The United States and Brazil look forward to building on this significant progress in our bilateral economic relationship.”
“Through this negotiated solution, the United States and Brazil can finally put this dispute behind us,” Vilsack said in the release.
“Without this agreement, American businesses, including agricultural businesses and producers, could have faced countermeasures in the way of increased tariffs totaling hundreds of millions of dollars every year. This removes that threat and ensures American cotton farmers will have effective risk management tools.”
The National Cotton Council, a U.S. group, immediately praised “the U.S. government’s successful efforts” to conclude the case and avoid retaliation.
The cotton case led to major changes in the cotton program in the 2014 farm bill. NCC Chairman Wally Darneille noted that the industry has undertaken extensive efforts to resolve this case, and that NCC had supported changes to the program.
“The new U.S. farm bill includes several necessary changes to cotton policy and the GSM export credit program,” Darneille said. “When compared to previous programs, cotton policy is more market-oriented with the primary safety net conveyed through insurance products that must be purchased by the producer.”
“With the conclusion of the case, the U.S. cotton industry can bring a renewed focus to the challenges that lay in front of us,” he added.
The American Farm Bureau Federation “is pleased that the U.S. and Brazil have reached an agreement over Brazil’s complaint to the World Trade Organization regarding U.S. cotton and other agricultural programs,” President Bob Stallman said.
“This agreement brings certainty to cotton growers and all U.S. farmers that the current structure of commodity programs will remain intact,” Stallman said. “Farm Bureau appreciates the continuing efforts of Chief Agricultural Negotiator [Darci] Vetter, the Office of the U.S. Trade Representative and the U.S. Department of Agriculture to resolve this issue of importance to U.S. agriculture.”
The National Foreign Trade Council said, “The NFTC and its members support WTO compliance, and we are encouraged to see that the U.S.-Brazil agreement contains adjustments to the U.S. cotton program to make it more WTO compliant in the long term, rather than just a short-term fix.”
▪ Memorandum of Understanding Related to the Cotton Dispute
▪ Reuters - U.S. to pay $300 million to end Brazil cotton trade dispute
▪ Bloomberg - Rousseff Pulls Ahead as Brazil Front-Runner in Datafolha
