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.

Multimedia

Audio

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

Katrina Brought Enduring Changes to New Orleans

The city’s recovery is the result of the people and culture the city is famous for, as well as newcomers and start-up industries More

China to Open Stock Markets to Pension Funds

In unprecedented move, government to soon allow local pension funds to invest up to $94 billion in domestic shares More

Magical Photo Slides Show Native Americans in Late 1800s

Walter McClintock spent 20 years photographing the Blackfoot Indians and their vanishing culture at the dawn of the modern age More

This forum has been closed.
Comments
     
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.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs