News / Economy

    Brazil Says US Farm Bill Violates Trade Rules

    FILE - a cotton field
    FILE - a cotton field
    The ink is barely dry on the new law governing U.S. farm subsidies, but already the measure faces a legal challenge on the grounds that it violates international trade rules.

    Brazil says farmers in other countries will suffer as a result of unfair protection given to U.S. producers in the new Farm Bill that U.S. President Barack Obama signed February 7.

    Brasilia has announced plans to reopen a case before the World Trade Organization - a case that the new agriculture legislation was supposed to resolve.

    The United States has been paying Brazil $147 million per year to ward off harsher measures that the WTO authorized when the U.S. lost the last of its appeals in a long-running dispute over cotton subsidies.

    Unfair farm payments

    That dispute began in the early 2000s.  Global cotton prices had been sinking through the late 1990s, and farmers in Brazil and other developing countries were struggling.

    Meanwhile, American farmers were receiving substantial subsidies.

    “There were times when U.S. cotton growers were getting more than half their revenue from the U.S. government,” said University of California at Davis agricultural economist Daniel Sumner.  “These other countries said, ‘Gee, how can we compete with that?’”

    So in 2002, Brazil brought the United States before the WTO.  Sumner helped make the economic case.

    The U.S. lost. On appeal, the U.S. lost again.  Twice.

    Retaliation

    Since the U.S. had failed to fix its subsidy program, the WTO said Brazil could retaliate.  That usually means raising tariffs on imported goods.

    “Brazil looked at this and said, ‘We don’t actually want to put tariffs on products coming in from the U.S. That actually hurts our economy,’” Sumner said.  Higher tariffs mean higher prices for Brazilian consumers.

    “But we need to find some way to get the attention of the U.S. government,” Sumner said.

    Instead, Brasilia threatened to suspend hundreds of millions of dollars’ worth of intellectual property protections on U.S. companies' software, pharmaceuticals, movies and more.

    That brought the U.S. to the negotiating table.

    In 2010, the two sides reached an agreement.  The Farm Bill would be up for renewal soon, and the U.S. promised the new version would fix the subsidy problems.  Until then, U.S. taxpayers would pay $147 million in subsidies to the Brazilian cotton industry.

    The new Farm Bill does change the subsidies.  Under the old system, U.S. farmers received payments when cotton prices fell below a certain level.  Under the new law, farmers buy insurance that protects most of their income when crops fail or when markets drop.  U.S. taxpayers cover most of the cost of the insurance policies.

    The U.S. stopped its payments to Brazil last September as the new Farm Bill neared completion.

    Brazil’s cotton producers association, ABRAPA, says the legislation has resolved nothing.

    In a statement, ABRAPA said, “More than not paying what you owe to Brazilian producers for subsidies deemed illegal by WTO judges, the United States passed a new farm bill that is likely to cause major distortions in international cotton prices.”

    ABRAPA said retaliation is in order, but Brazilian ministers decided to take the case back to the WTO first.

    The U.S. growers’ association, the National Cotton Council, responded in a statement saying the insurance plan “was developed specifically to bring the United States into compliance with the (WTO) decision.”

    Insurance programs are allowed under WTO rules, the NCC says, adding that this and other changes "are significant, and we believe the matter is resolved.”

    Even if the matter is resolved, there may be others.  The new Farm Bill offers similar protections to other agricultural products.  In addition, for some crops, Congress strengthened programs that pay farmers when prices fall below a certain point.  That’s one type of support that put the U.S. in trouble with the WTO in the first place.

    Farm groups note that the WTO permits governments to pay their farmers limited amounts of subsidies, and say that under the new law, the U.S. is unlikely to exceed those limits.

    Intellectual property industries are assuming the best at this point.  "We expect [Congress] knew what's at stake, and we hope the Farm Bill is in compliance" with WTO rules, said spokesman Mark Grayson with the Pharmaceutical Research and Manufacturers of America.

    Economists describe the new Farm Bill as a step backward, potentially inflicting more harm on developing world farmers than the old bill did.

    Steve Baragona

    Steve Baragona is an award-winning multimedia journalist covering science, environment and health.

    He spent eight years in molecular biology and infectious disease research before deciding that writing about science was more fun than doing it. He graduated from the University of North Carolina at Chapel Hill with a master’s degree in journalism in 2002.

    You May Like

    Chechen Suspected in Istanbul Attack, but Questions Remain

    Turkish sources say North Caucasus militants involved in bombing at Ataturk airport, but name of at least one alleged attacker raises doubts

    With Johnson Out, Can a New ‘Margaret Thatcher’ Save Britain?

    Contest to replace David Cameron as Britain’s prime minister started in earnest Thursday with top candidates outlining strategy to deal with Brexit fallout

    US Finds Progress Slow Against Human Trafficking in Africa

    Africa continues to be a major source and destination for human trafficking of all kinds -- from forced labor to sexual slavery, says State Department report

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Clinton Leads Trump, But Many Voters Don't Like Eitheri
    X
    Jim Malone
    June 29, 2016 6:16 PM
    In the U.S. presidential race, most recent polls show Democrat Hillary Clinton with a steady lead over Republican Donald Trump as both presumptive party nominees prepare for their party conventions next month. Trump’s disapproval ratings have risen in some recent surveys, but Clinton also suffers from high negative ratings, suggesting both candidates have a lot of work to do to improve their images before the November election. VOA National correspondent Jim Malone has more from Washington.
    Video

    Video Clinton Leads Trump, But Many Voters Don't Like Either

    In the U.S. presidential race, most recent polls show Democrat Hillary Clinton with a steady lead over Republican Donald Trump as both presumptive party nominees prepare for their party conventions next month. Trump’s disapproval ratings have risen in some recent surveys, but Clinton also suffers from high negative ratings, suggesting both candidates have a lot of work to do to improve their images before the November election. VOA National correspondent Jim Malone has more from Washington.
    Video

    Video Slow Rebuilding Amid Boko Haram Destruction in Nigeria’s Northeast

    Military operations have chased Boko Haram out of towns and cities in Nigeria’s northeast since early last year. But it is only recently that people have begun returning to their homes in Adamawa state, near the border with Cameroon, to try to rebuild their lives. For VOA, Chris Stein traveled to the area and has this report.
    Video

    Video New US Ambassador to Somalia Faces Heavy Challenges

    The new U.S. envoy to Somalia, who was sworn into office Monday, will be the first American ambassador to that nation in 25 years. He will take up his post as Somalia faces a number of crucial issues, including insecurity, an upcoming election, and the potential closure of the Dadaab refugee camp in Kenya. VOA’s Jill Craig asked Somalis living in Kenya’s capital city Nairobi how they feel about the U.S. finally installing a new ambassador.
    Video

    Video At National Zoo, Captivating Animal Sculptures Illustrate Tragedy of Ocean Pollution

    The National Zoo in Washington, D.C., is home to about 1,800 animals, representing 300 species. But throughout the summer, visitors can also see other kinds of creatures there. They are larger-than-life animal sculptures that speak volumes about a global issue — the massive plastic pollution in our oceans. VOA's June Soh takes us to the zoo's special exhibit, called Washed Ashore: Art to Save the Sea.
    Video

    Video Baghdad Bikers Defy War with a Roar

    Baghdad is a city of contradictions. War is a constant. Explosions and kidnappings are part of daily life. But the Iraqi capital remains a thriving city, even if a little beat up. VOA's Sharon Behn reports on how some in Baghdad are defying the stereotype of a nation at war by pursuing a lifestyle known for its iconic symbols of rebellion: motorbikes, leather jackets and roaring engines.
    Video

    Video Melting Pot of Immigrants Working to Restore US Capitol Dome

    The American Iron Works company is one of the firms working to renovate the iconic U.S. Capitol Dome. The company employs immigrants of many different cultural and national backgrounds. VOA’s Arman Tarjimanyan has more.
    Video

    Video Testing Bamboo as Building Material

    For thousands of years various species of bamboo - one of the world's most versatile plants - have been used for diverse purposes ranging from food and medicine to textiles and construction. But its use on a large scale is hampered because it's not manufactured to specific standards but grown in the ground. A University of Pittsburgh professor is on track to changing that. VOA’s George Putic reports.
    Video

    Video Orphanage in Iraqi City Houses Kids Who Lost their Parents to Attacks by IS

    An orphanage in Iraqi Kurdistan has become home to scores of Yazidi children who lost their parents after Islamic State militants took over Sinjar in Iraq’s Nineveh Province in 2014. Iraqi Kurdish forces backed by the U.S. airstrikes have since recaptured Sinjar but the need for the care provided by the orphanage continues. VOA’s Kawa Omar filed this report narrated by Rob Raffaele.
    Video

    Video Re-Opening Old Wounds in a Bullet-Riddled Cultural Landmark

    A cultural landmark before Lebanon’s civil war transformed it into a nest of snipers, Beirut’s ‘Yellow House’ is once again set to play a crucial role in the city.  Built in a neo-Ottoman style in the 1920s, in September it is set to be re-opened as a ‘memory museum’ - its bullet-riddled walls and bunkered positions overlooking the city’s notorious ‘Green Line’ maintained for posterity. John Owens reports from Beirut.
    Video

    Video Brexit Resounds in US Presidential Contest

    Britain’s decision to leave the European Union is resounding in America’s presidential race. As VOA’s Michael Bowman reports, Republican presumptive nominee Donald Trump sees Britain’s move as an affirmation of his campaign’s core messages, while Democrat Hillary Clinton sees the episode as further evidence that Trump is unfit to be president.
    Video

    Video NASA Juno Spacecraft, Nearing Jupiter, to Shed Light on Gas Giant

    After a five-year journey, the spacecraft Juno is nearing its destination, the giant planet Jupiter, where it will enter orbit and start sending data back July 4th. As Mike O'Sullivan reports from Pasadena, California, the craft will pierce the veil of Jupiter's dense cloud cover to reveal its mysteries.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.9007
    JPY
    USD
    102.72
    GBP
    USD
    0.7444
    CAD
    USD
    1.2956
    INR
    USD
    67.519

    Rates may not be current.