Harry Cline is reporting for the Southeast Farm Press that the World Trade Organization (WTO) has ruled that the United States “will have to forfeit $300 million in export trade to the South American country.” The arbitration report follows rulings in the cotton case brought to the WTO by Brazil in 2002 that essentially found the United States policy for cotton gave an unfair advantage to US producers that allowed US farmers to depress prices and undersell international competition.Brazil had requested $3 billion in damages, but was limited to $300. So, in a way, this ruling is being viewed by some in the industry as not really a loss, but also not a win. Those who helped lead the fight to reduce the award amount included the entertainment industry and pharmaceutical industry who were worried about losing intellectual property rights as part of any award. As Cline writes, “[t]he ‘real threat’ from the WTO case was to U.S. intellectual property. ‘Had the amount been equal or more than what Brazil requested, the country could have copied films, CDs or even violated pharmaceutical property rights’ for compensation in winning its WTO case.”
Cline does report that the US cotton industry has still felt negative effects from the WTO ruling in favor of Brazil. The Step-2 program was eliminated because of the ruling, and since the ruling US production of cotton has dropped by 45 percent, while production among the U.S.’s main foreign competitors is up 20 percent.
To read the Cline article click here.
Posted: 11/18/09
