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U. S. Reviews Farm Program

The Obama administration will talk to stakeholders about cotton subsidies now that Brazil can apply sanctions to U. S. products in a long-running trade dispute, the U. S. Trade Representative’s office said Aug. 31.

A new World Trade Organization decision against U. S. subsidies for cotton – the farm program the rest of the world loves to hate – may put renewed pressure on Congress to look at whether it needs to reform supports for farmers.

The WTO ruled that Brazil could retaliate against the United States, and set specific levels and conditions under which Brazil could “cross-retaliate” against U. S. services and intellectual property.

Cotton subsidies have become a symbol for what other countries say is the unfair largesse U. S. taxpayers give to farmers, allowing them to produce more than they otherwise would have and export it for cheaper prices than they could otherwise accept.

“While we remain disappointed with the outcome of this dispute, we are pleased that the arbitrators awarded Brazil far below the amount of countermeasures it asked for,” said Carol Guthrie, a spokeswoman for the USTR.

The WTO denied Brazil “unlimited ability” to retaliate against U. S. intellectual property and services, and denied a request for a one-time $350-million fine against the repealed “Step 2” cotton program, Guthrie said.

Brazil had sought $2.5 billion in annual retaliatory trade sanctions, but the United States had argued a figure of $20 million to $30 million was appropriate.

The USTR said it was unclear if or when Brazil will use its authority to retaliate.

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