{ "id": "R43336", "type": "CRS Report", "typeId": "REPORTS", "number": "R43336", "active": true, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 438066, "date": "2014-10-01", "retrieved": "2016-04-06T20:02:40.022754", "title": "The WTO Brazil-U.S. Cotton Case", "summary": "On October 1, 2014, Brazil and the United States reached an agreement to resolve the long-running cotton dispute in the World Trade Organization (WTO). The two countries signed a new memorandum of understanding (MOU) that spelled out the terms of the agreement: Brazil relinquishes its rights to countermeasures against U.S. trade or any further proceedings in the dispute; the United States agreed to new rules governing fees and tenor for the GSM-102 export credit guarantee program; Brazil agreed to a temporary Peace Clause with respect to any new WTO actions against U.S. cotton support programs while the 2014 farm bill (P.L. 113-79) is in force or against any agricultural export credit guarantees under the GSM-102 program as long as the program is operated consistent with the agreed terms; the United States would make a one-time final payment of $300 million to the Brazil Cotton Institute (BCI) with explicit use-of-fund conditions; and both counties agreed to routine semi-annual reporting under the MOU.\nThe cotton dispute settlement case (DS267) was initiated by Brazil\u2014a major cotton export competitor\u2014in 2002 against specific provisions of the U.S. cotton program. In September 2004, a WTO dispute settlement panel ruled that (1) certain U.S. agricultural support payments for cotton distorted international agricultural markets and should be either withdrawn or modified to end the market distortions; and (2) U.S. Step-2 payments and agricultural export credit guarantees for cotton and other unscheduled commodities were prohibited subsidies under WTO rules and should be withdrawn. \nIn 2005, the United States made several changes to both its cotton and export credit guarantee programs in an attempt to bring them into compliance with WTO recommendations; however, Brazil argued that the U.S. response was inadequate. A WTO compliance panel ruled in Brazil\u2019s favor and was upheld on appeal. The United States made additional changes to its export credit program in the 2008 farm bill, but Brazil found the overall level of changes to fall short of the WTO ruling. The threat of retaliation led Brazil and the United States to negotiate a temporary agreement, referred to as the Framework Agreement (June 17, 2010), to avoid trade retaliation with the understanding that the WTO cotton dispute would be resolved definitively within the context of the next U.S. farm bill. \nIn this regard, the 2014 farm bill (P.L. 113-79) included several substantive changes to both U.S. cotton support programs and the export credit guarantee program. These changes have resulted in cotton being singled out and treated differently from all other U.S. program crops. Cotton no longer has access to the price and income support programs offered for other program crops, but instead will rely on a within-year, market-based insurance guarantee\u2014referred to as the Stacked Income Protection Program or STAX\u2014as its primary support measure. Under this new cotton program, producers would have to pay into the program in order to participate, a loss (albeit at the county level) would have to occur before an indemnity payment would be made, and the sum of program indemnity payments under STAX and any other crop insurance policy would be prohibited from exceeding the value of the insured crop to minimize any production incentive. In addition, U.S. export credit guarantee programs have been substantially reformed, including a shortened tenor (i.e., contract length) of only 24 months\u2014down from 36 months\u2014and increased user fees to ensure that the program\u2019s operating costs are fully covered by fees so as to avoid any implicit subsidy. New farm legislative language also included expanded flexibility for USDA to negotiate with Brazil concerning the compliance of export credit guarantee implementation.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43336", "sha1": "05849d0a6cefbf920299fe1c1a5095a664f293d4", "filename": "files/20141001_R43336_05849d0a6cefbf920299fe1c1a5095a664f293d4.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43336", "sha1": "5650c1f7d5a184440e35b007153c04c506829b19", "filename": "files/20141001_R43336_5650c1f7d5a184440e35b007153c04c506829b19.pdf", "images": null } ], "topics": [ { "source": "IBCList", "id": 217, "name": "Agricultural Trade" }, { "source": "IBCList", "id": 365, "name": "U.S. and International Trade Agreements" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc462585/", "id": "R43336_2014Feb21", "date": "2014-02-21", "retrieved": "2014-12-05T09:57:41", "title": "Status of the WTO Brazil-U.S. Cotton Case", "summary": "This report provides a description and status report on Brazil's challenge to certain aspects of the U.S. cotton program under the rules of the World Trade Organization's (WTO's) dispute settlement process in case DS267.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20140221_R43336_bcfd70360c31c0c20ae9d6c5cccba2adf42844f8.pdf" }, { "format": "HTML", "filename": "files/20140221_R43336_bcfd70360c31c0c20ae9d6c5cccba2adf42844f8.html" } ], "topics": [ { "source": "LIV", "id": "Trade", "name": "Trade" }, { "source": "LIV", "id": "Trade agreements", "name": "Trade agreements" }, { "source": "LIV", "id": "Agriculture in foreign trade", "name": "Agriculture in foreign trade" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc818114/", "id": "R43336_2014Feb11", "date": "2014-02-11", "retrieved": "2016-03-19T13:57:26", "title": "Status of the WTO Brazil-U.S. Cotton Case", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20140211_R43336_704c9497f18794dd06447e80df1788d5eff89013.pdf" }, { "format": "HTML", "filename": "files/20140211_R43336_704c9497f18794dd06447e80df1788d5eff89013.html" } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc820470/", "id": "R43336_2013Dec12", "date": "2013-12-12", "retrieved": "2016-03-19T13:57:26", "title": "Status of the WTO Brazil-U.S. Cotton Case", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20131212_R43336_91fa411d4d2c673140fde4f9cd526e6b0bfede6d.pdf" }, { "format": "HTML", "filename": "files/20131212_R43336_91fa411d4d2c673140fde4f9cd526e6b0bfede6d.html" } ], "topics": [] } ], "topics": [] }