Posted January 17, 2014
The National Cotton Council (NCC) recently released a
statement responding to a Brazilian Cotton Grower delegation’s statements on
the farm bill and the retaliatory measures a under ruling from the World Trade
Organization (WTO). The statement is
available here.
A Brazilian cotton delegation recently visited
Washington to discuss the farm bill and the U.S.-Brazil agreement which calls
for the U.S. to pay Brazil $147 million per year, beginning in 2010. The U.S.-Brazil Framework Agreement was created
to hold off Brazil from retaliating against the U.S. for violating the WTO
rules regarding cotton subsidies while Congress worked on a farm bill to fix
the problem-causing cotton program.
Brazil won the right to impose $830 million in retaliatory tariffs at
the WTO on U.S. goods ranging from cars to milk powder, according to a Reuters
article available here.
After recent meetings, the Brazilian cotton delegation
told the press they were “pessimistic” that Congress would finish the farm bill
and they were also unsure that the legislation would comply with WTO rules
against trade-distorting subsidies.
“In visits to Congress we have not yet seen sufficient
effort to make the new farm bill comply,” said Gilson Pinesso, president of the
Brazilian Cotton Growers Association (ABRAPA).
“We are in the position where there are no options left
but retaliation,” said Welber Oliveria Barral, former Brazilian secretary of
development, industry and trade, who was part of the delegation.
Brazil’s foreign trade commission (Camex) said it will
hold public consultations in January and plans to finalize retaliatory measures
by Feb. 28.
The NCC stated that it was “deeply disappointed and
disturbed by the statements to the press made by representatives of the Brazilian
cotton industry.” The NCC also said the
“Brazilian cotton delegation misrepresented the carefully negotiated agreement
between the U.S. and Brazilian grower organizations and wrongly portrayed the
reformed cotton provisions in the farm legislation.”
Under the new insurance option in the farm bill, cotton
growers “could purchase supplemental insurance that includes a significant
deductible.” The insurance product
“covers a narrow band of lost income in the event that actual revenue does not
meet a percentage of projected revenue”; “does not cover all losses”; and “is not
an incentive to over-produce.”
For more information on agricultural trade issues,
please visit the National Agricultural Law Center’s website here.
