Associated Press Online |By IRA DREYFUSS | April 28, 2004
Lawmakers worry a preliminary World Trade Organization decision that found U.S. cotton subsidies are unfair could have a far-reaching impact that extends beyond the cotton fields.
A three-person WTO panel sided with a complaint brought by Brazil, saying supports for U.S. cotton producers are unfair to growers in developing nations. The panel said the subsidies raise U.S. cotton production and exports while lowering world cotton prices. The panel's report has not been made public, but U.S. and Brazilian trade officials who have seen it have openly discussed it.
If the decision stands, lawmakers fear it could lead to similar challenges involving other crops.
"This is much broader than cotton," Rep. Charles Stenholm of Texas, ranking Democrat on the House Agriculture Committee, said Tuesday.
By filing the trade complaint on cotton, Brazil - a leading agricultural competitor with the United States - has further complicated the separate process of negotiating worldwide tariff cuts for many crops through the WTO's Doha Round of talks, Stenholm said. "The stage has been set for a lot of folks stepping back from trade negotiations," he said.
But Allen Johnson, the chief U.S. negotiator on agricultural issues, said the ruling wouldn't necessarily make the tariff negotiations more difficult.
"Agricultural negotiations are always difficult," he told reporters.
He also said the case would have no immediate effect on U.S. farm programs.
"This is a litigation process that is going to take many months," Johnson said.
At a hearing before the committee on Wednesday, Agriculture Secretary Ann Veneman and U.S. Trade Representative Robert Zoellick were to testify about agricultural trade negotiations.
"What I would hope that (Zoellick) would say is that we are going to continue to negotiate in good faith, and we hope that all countries will continue to negotiate in good faith," Stenholm said.
Farm subsidies have long been a sore spot in international trade negotiations. They are blamed for giving industrialized countries unfair trade advantages while suppressing competition from developing countries.
The Bush administration will appeal the WTO's preliminary decision in the cotton case. It insists that U.S. cotton subsidies comply with world trade requirements and that some items cited by Brazil do not count as subsidies under WTO rules.
Members of Congress applauded the administration's decision to defend the subsidy program. "I'm sure the administration will continue to support the interests of U.S. farmers in this WTO process," Sen. Thad Cochran, R-Miss., chairman of the Senate Agriculture Committee, said in a statement.
Cochran did not see the cotton decision as an immediate threat to all U.S. farm subsidies. "While this is a disappointing development, it does not change the provisions of current law," he said.Associated Press:
