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House Votes to Block Payments to Brazil

posted on June 17, 2011

The House voted Thursday to block a $147 million annual payment to Brazil's cotton industry, renewing a decade-old trade dispute with the country.

The chamber voted 223-197 to adopt an amendment to a farm spending bill that would block the payment, which the United States agreed to last year in response to a 2002 Brazilian complaint to the World Trade Organization. That case alleged the United States remained the world's second-largest cotton producer by paying out the subsidies.

By making the payments to Brazil, the United States can continue to subsidize its own cotton farmers. Democratic Rep. Ron Kind, a Wisconsin Democrat who is a frequent critic of domestic farm subsidies, offered the amendment. Kind was joined by fiscal conservatives who said the Brazil payment is wasteful.

"Let's end this nonsense of stacking subsidy program on top of subsidy program to blackmail other governments who have a WTO decision in their hands," Kind said on the House floor.

The United States agreed to the annual payment in April 2010 after Brazil threatened to raise tariffs on hundreds of millions of dollars in American goods, including autos, pharmaceuticals and electronics. The World Trade Organization had said Brazil could take punitive action because the United States had failed to get rid of subsidies the WTO said were illegal.

Members from Southern cotton farming states argued against the amendment, saying that it could turn the cotton industry on its head. The Senate has not weighed in on the issue.


Tags: Brazil Congress cotton government industry news trade