News / USA

US Subsidizes Brazilian Cotton Farmers in Latest Trade Twist

$147 million fund for Brazil's cotton farmers aims to end long-running WTO dispute

The U.S. has agreed to establish a $147 million dollar fund to help cotton farmers in Brazil and other countries improve their production.
The U.S. has agreed to establish a $147 million dollar fund to help cotton farmers in Brazil and other countries improve their production.



American taxpayers may soon be subsidizing Brazilian cotton farmers in order to protect the earnings of U.S. drug companies. That's one way to look at a new agreement aimed at ending a long-running dispute within the World Trade Organization between Brazil and the United States.

It's the first time the U.S. has been penalized over its farm subsidies. But the resolution leaves some agricultural trade experts scratching their heads.

For years, cotton growers in developing countries have complained about U.S. farm subsidies. The U.S. government wants to help sell more American farm products on the world market. So it provides export companies with financial help to lower their prices on everything from grains and soybeans to dairy products and, in this case, cotton. That pushes down the global market price of cotton.

"For farmers in sub-Saharan Africa who are subsisting on very little money, a small reduction in price based on American subsidization is a big deal to them," says David DeGennaro with the Environmental Working Group.

WTO rules against US

In 2002, several African countries joined Brazil and took the United States to the WTO over its cotton subsidies.

They won. That's a first.

But the U.S. didn't end the subsidies. So the WTO said Brazil could retaliate by raising its import tariffs on U.S. agricultural products.

Brazil, however, is a major farm exporter and doesn't buy that many agricultural products from the U.S. "To have more clout with the US, [Brazil] said we don't want to just retaliate in agriculture," says David Orden with the International Food Policy Research Institute.

Brazil wanted to hit the U.S. where it would hurt more: by breaking patents on pharmaceuticals and copyrights on movies and software. The WTO agreed, and gave Brazil the right to $260 million dollars worth of U.S. intellectual property this year.

'Bribing' Brazil

Orden says U.S. officials didn't want that to happen.

"Rather than have Brazil retaliate against us, the U.S. has found a way to bribe Brazil, if you will, to not impose that retaliation in exchange for various things the U.S. says it will do," he says.

The U.S. has agreed to establish a $147 million dollar fund to help cotton farmers in Brazil and other countries improve their production.

U.S. Department of Agriculture undersecretary Jim Miller says the settlement keeps the U.S. from getting shut out of Brazil, a growing market for American exports.

"Given the fact that the level of retaliation next year would likely increase, we have protected the market for a significant level of goods and intellectual property rights going forward," he says.

'A strange situation'

But David DeGennaro with the Environmental Working Group puts it this way: "It's really kind of ridiculous that American taxpayers are going to be subsidizing Brazilian cotton farmers just so that we can keep on subsidizing our own cotton farmers. It's really a strange situation."

Even Dave Salmonsen with the American Farm Bureau Federation which represents U.S. farmers is not an enthusiastic supporter of the U.S. aid to Brazil.

"You got into a negotiation, and that was what the Brazilians wanted, and the U.S. negotiators were willing to go along with that," he says. "It's a bit of a groundbreaking thing. Maybe in the future we'll see more of that, but I don't think we've seen this before."

U.S. subsidy programs for maize, wheat, and other crops are very similar to the cotton program. So, the U.S. could be in for another big fight at the WTO unless Congress cuts the subsidies. That would very likely spark a big political fight at home with the powerful farm lobby. But with the U.S. running record deficits, some say farm subsidies could face cuts when the legislation that governs them comes up for renewal in 2012.

You May Like

Multimedia Brussels Schools, Metro Reopen Under Heavy Guard

City remains under the highest threat alert level due to what authorities have described as a 'serious and imminent' threat of attack

Video Debt-ridden Refugees Await Onslaught of Lebanese Winter

Aid agencies are attempting to reduce potentially devastating consequences of freezing conditions and snowstorms that killed eight last year, including three Syrian refugees

UN Warns Air Pollution in Asia Pacific Has Rising Cost

Globally some seven million people a year die prematurely due to indoor and outdoor pollution with about 70 per cent of those deaths in region

This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Paris Attacks, France Steps Up Fight Against ISi
November 24, 2015 3:04 AM
The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs