Ruling could force U.S. to eventually end all farm subsidies
WASHINGTON , D.C. – In a preliminary ruling handed down at the World Trade Organization on Monday, Brazil won its case against the United States and its subsidies given to cotton farmers. Brazil claims that the subsidies paid to cotton producers by the United States Treasury violate international trade laws, and the WTO agrees.
This is the first time a country has been challenged over its domestic agricultural subsidies and, if allowed to stand, the decision could have far-reaching repercussions for American farmers. If cotton subsidies are found to be illegal, it could mean that other farm subsidies could soon come under attack as well.
"This could be the beginning of the end for farm subsidies in the United States ," said taxpayer advocate Grover Norquist, president of Americans for Tax Reform. "As free trade expands throughout the world, it was only a matter of time before our trading partners demanded a completely free and open market."
Brazil , the world\’s fifth largest cotton producer, claims that the United States , the world\’s second largest cotton producer, is able to control global cotton prices and stay at or near the top of production through its agricultural subsidies. The United States pays farmers roughly $3 billion annually to grow and market cotton and total U.S. subsidies for all crops approached $19 billion in fiscal 2003.
"The United States must realize that free trade is a two-way street," said Norquist. "When states pick and choose which goods they will freely trade, it\’s not really free trade! These types of trade barriers lead to higher prices which hurt the average consumer in both the short and long runs."
The United States is expected to appeal the preliminary ruling, and a final decision is expected in June.