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WTO Chief: U.S. Must Give On Cotton Subsidies

posted on October 7, 2005

World Trade Organization chief Pascal Lamy this week said further liberalization of the global trade in cotton is needed and that the United States' failure to comply with a recent WTO ruling was "part of the problem" in improving trade conditions for developing countries.

A day after Brazil said it would seek final WTO permission to retaliate for illegal U.S. cotton subsidies, Lamy told a session of the U.N. Conference on Trade and Development in Geneva, Switzerland, that cotton was "of particular concern" for developing countries.

He said WTO members, and specifically the United States, would have to work toward finding ways to eliminate export subsidies and slash trade-distorting farm supports.

"Part of the (cotton) problem lies in the WTO and will be addressed as part of the agriculture negotiations." Lamy said. "Another part relates to the implementation of the recent panel decision by the U.S."

In March, the WTO upheld a ruling condemning government help for cotton producers in the United States, saying that many U.S. programs included illegal export subsidies or domestic payments that are higher than WTO rules allow.

The U.S. lost its appeal of the ruling after insisting that its payments to farmers were within permitted levels and claiming many were not subsidized as defined by the WTO.

Tags: agriculture Brazil cotton news trade