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1 (January 25, 2008)

handle is hein.crs/crsmthabdlc0001 and id is 1 raw text is: Order Code RS22187 Updated January 25, 2008 SCRS Report for Congress 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 December 18, 2007, a World Trade Organization (WTO) compliance panel publicly released its final report concerning U.S. compliance with a negative ruling in a dispute settlement case (DS267) brought by Brazil against certain aspects of the U.S. cotton program. The panel's ruling confirmed an earlier (July 27, 2007) interim ruling that the United States has not fully complied with a March 2005 WTO ruling against certain U.S. cotton support programs. A U.S. appeal (if it so chooses) must occur before the compliance panel's ruling is adopted by the Dispute Settlement Body (i.e., within 60 days of the ruling's release). The ruling against the United States (barring a successful U.S. appeal) 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. Both the Senate- and House-passed versions of the 2007 farm bill (H.R. 2419) contain provisions to bring the export credit program into compliance; however, neither version appears to address the serious prejudice charge related to price-contingent subsidies. 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 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 issues (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. Congressional Research Service ' The Library of Congress Prepared for Members and Committees of Congress

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