AFX.COM | April 28, 2004 HEADLINE:
The US has "serious concerns" with an interim WTO ruling in a landmark battle with Brazil over US cotton subsidies and will lodge an appeal if it is not changed, a spokeswoman said Tuesday.
In contrast, Brazil said the confidential finding released to both parties on Monday reflected its concerns over the harmful impact of export and domestic subsidies for the production, use and shipment of US cotton.
And relief agency Oxfam described the result, if upheld, as a huge victory for the developing world as it would force Washington to reform its cotton subsidy programme, benefiting farmers in Brazil and across Africa.
A three-judges panel was established in March last year after Brazil complained to the World Trade Organization that the US paid nearly 4 bln usd in subsidies for crops worth just 3 bln usd in the year to July 31, 2002.
US cotton subsidies encourage over-production and export dumping, and drive down the world price, resulting in the loss of livelihoods in Africa and other developing countries, according to Oxfam.
But Washington says its cotton support programs fall within WTO limits.
"A report was issued, it is interim and it's confidential," said the spokeswoman for the US' delegation in Geneva where the WTO is headquartered.
"We have serious concerns with some aspects of the report," she told Agence France-Presse.
"We are reviewing it and if the final report remains unchanged ... then we would appeal."
The preliminary ruling, which was not made public, will be viewed by the two parties who have a few weeks to make comments to the panel or request a meeting with the three WTO experts.
Following this period, the panel will disclose a final report, again privately, to the US and Brazil with its ultimate ruling. This document is due to be publicly released on June 18.
Either party has the power to appeal the findings.
In Brasilia on Monday, a senior trade official said the country was satisfied with the preliminary results of the WTO panel.
They "accurately reflect Brazilian concerns with this issue," ambassador Clodoaldo Hugueney, secretary general for trade and technology at the Brazilian Foreign Ministry, told reporters, without disclosing the content of the ruling.
Huegueney linked Brazil's fight against cotton subsidies to a campaign to fight developed nations' export subsidies waged by the G-20 group formed within the WTO during a ministerial meeting in Cancun, Mexico, last year.
Trade diplomats are facing a crucial end-July deadline to agree on a framework for the guidelines and targets of global farm reform negotiations under the latest round of trade liberalisation talks.
Farming subsidies are the biggest bone of contention between farming exporters such as Australia, Brazil and Canada, and heavy subsidisers in the European Union, Japan and Switzerland.
Oxfam said Tuesday the ruling, if upheld, represented an historic triumph for developing countries.
"This would be a huge victory, not just for Brazil but particularly for ten mln poor African farmers whose livelihoods have been crippled by unfair competition with highly-subsidised US cotton," Oxfam spokesperson Celine Charveriat said in a statement.AFX:
