The World Trade Organization's Compliance Panel made its final ruling Tuesday on Brazil's case against U.S. cotton subsidies. The WTO says despite elimination of the Step Two cotton subsidy program, the U.S. has failed to conform to the previous WTO decision issued in July.
The U.S. Trade Representative's office says that it believes the U.S. has brought its cotton programs into full compliance with WTO rulings and recommendations of the original case. USTR is reviewing the panel's report and considering all options including an appeal.
In a statement, U.S. Senator Saxby Chambliss, R-Ga., ranking Republican member on the Senate Agriculture Committee, continued to stand behind U.S. cotton program and stated the changes included in the recently Senate passed farm bill are consistent with international obligations.
"The state of the cotton market is very different than it was just two years ago and the panel report ignores these fundamental realities," Chambliss says. "Critics of the U.S. cotton program and of all farm programs will no doubt call for drastic changes to the farm safety net. Let me assure producers in Georgia, across the Cotton Belt and the country that this will not happen."
Tuesday's ruling potentially opens the door for Brazil to issue retaliatory trade sanctions against the U.S. To view a one page summary of the WTO ruling, click HERE.