Update: WTO Rules Against US Cotton Subsidies

GENEVA - The World Trade Organization has found that the United States failed to scrap a series of illegal subsidies paid to American cotton growers, a ruling that could open the door to billions of dollars' in Brazilian trade sanctions against the U.S., trade officials said Monday.

The result is a major victory for Brazil's cotton industry and for West African countries that have claimed to have been harmed by the American payments.

The Brazilian government claims the U.S. retained its place as the world's second-largest cotton grower by paying out $12.5 billion in government subsidies to American farmers between August 1999 and July 2003.

Critics of U.S. cotton subsidies say they drive down prices, making it impossible for small farms to compete in international markets, and more difficult for poorer countries to develop their economies by selling their agricultural produce abroad.

Bottom Line: Not only are cotton subsidies an unjust, immoral and unfair transfer of wealth from the American taxpaying middle class to wealthy corporate agribusinesses in the U.S., they are also illegal according to WTO trade policy laws. Not to mention that they make desperately poor people in Africa even poorer.

See previous post on cotton subsidies here.