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A WTO panel has upheld last year's ruling, which said the subsidies helped US cotton farmers undercut foreign competitors. Due to this ruling, the US could lose billions of dollars in trade sanctions for failing to scrap illegal subsidies paid to US cotton growers.
Brazil brought the case in 2002. It would now decide whether to impose retaliatory trade sanctions on the US. The US was “very disappointed” by the ruling.
“We believe that the changes made by the United States brought the challenged payments and guarantees into full compliance with the WTO's recommendations and rulings,” a spokesman for the US Trade Representative Susan Schwab, Sean Spicer said.
The ruling permits Brazil to seek approval of the WTO for over $1billion a year in sanctions on imports of goods and services from the US. The WTO suggested that it could retaliate by suspending US intellectual property rights.
US cotton subsidies are one of the most contested and contentious issues in the Doha Round of global trade talks. Developing country producers, especially in Africa, say the US subsidies squeeze their own poor farmers out of the market. (Source: BBC)
June 4, 2008
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