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1 1 (June 17, 2008)

handle is hein.crs/crsaiyc0001 and id is 1 raw text is: Order Code RS22187 Updated June 17, 2008 Brazil's WTO Case Against the U.S. Cotton Program: A Brief Overview Randy Schnepf Specialist in Agricultural Policy Resources, Science, and Industry Division Summary On June 2, 2008, a World Trade Organization (WTO) Appellate Body (AB) publicly released its final report upholding a December 2007 compliance panel ruling that the United States has not fully complied with a March 2005 WTO ruling against certain U.S. cotton support programs. This AB ruling was part of a prolonged dispute settlement case (DS267) originated by Brazil against certain aspects of the U.S. cotton program in September 2002. The ruling against the United States could necessitate further U.S. farm program changes or, if no further changes are forthcoming, clear the way for Brazil to request WTO authorization for retaliatory trade sanctions. The AB ruling must first be adopted by the WTO's Dispute Settlement Body (within 30 days of the ruling' s release); then the United States and Brazil will likely resume arbitration over the value of sanctions authority requested by Brazil (to be completed within 60 days). This report provides a brief overview of Brazil's case against the U.S. cotton program, the evolution and current status of the case, and the potential role for Congress. For a more detailed discussion of the U.S.-Brazil WTO dispute settlement case, see CRS Report RL32571, Brazil's WTO Case Against the U.S. Cotton Program, by Randy Schnepf. This report will be updated as events warrant. Introduction The United States is the world's largest cotton exporter. During the 2001-2003 period, U.S. cotton exports accounted for 40% of world trade, while U.S. cotton subsidies averaged $3 billion per year. In late 2002, Brazil - a major cotton export competitor - expressed its growing concerns about U.S. cotton subsidies by initiating a WTO dispute settlement case (DS267) against specific provisions of the U.S. cotton program. On September 8, 2004, a WTO dispute settlement panel ruled against the United States on several key aspects of U.S. cotton programs (discussed below). This ruling was appealed by the United States, and on March 3, 2005, a WTO Appellate Body (AB) upheld the panel's ruling and provided specific deadlines for removal or modification of the offending U.S. subsidies.

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