USDA: Interim Agreement Sets Stage
For Negotiated Settlement of WTO Brazil Case

Friday, April 9, 2010                                    By Shawn Wade

      The April 6 announcement of what amounts to an interim agreement on the process of settling the ongoing Brazil WTO case is being hailed as good news by both the United States Department of Agriculture and the National Cotton Council, although both bodies would likely acknowledge that the devil will be in the details of any negotiated final settlement.

      NCC Chairman Eddie Smith said in a statement released April 6 noted the announcement "is a positive development in this very long dispute and signals a path forward for the United States and Brazil." He added that the agreement provides a roadmap for the two countries to come to a long-term solution regarding this trade dispute without resorting to harmful retaliation.

      In Washington a joint announcement from USDA Secretary Tom Vilsack and U.S. Trade Representative Ron Kirk also concentrated on the positive elements of being able to forestall harmful retaliatory countermeasures by Brazil.

      Vilsack noted in the statement that he was pleased that the agreement reached with Brazil will also "respect the U.S. Farm Bill process and the role of Congress in shaping our commodity programs."

      Comments from Senate Agriculture Committee Chairman Blanche Lincoln and Ranking Member Saxby Chambliss reinforce the role that they intend Congress to play in developing a final resolution to the Brazil case that includes modifications to current U.S. commodity programs.

      In their statement they say, "Ultimately, Congress and the Senate and House Agriculture Committees in particular are responsible for crafting changes to these programs and we look forward working with Ambassador Kirk and Secretary Vilsack as both sides explore modifications for consideration during the 2012 farm bill process."

      The point that the devil will ultimately be in the details of any final agreement, especially in regard to cotton, was driven home in a statement from Brazilian Foreign Minister Celso Amorim who reiterated that Brazil would continue to insist on a complete elimination of American cotton subsidies.

      "Any understanding outside of a full implementation of the rulings of the WTO will by definition be temporary," Amorim said. "This full implementation will involve complex actions by both the American executive and legislative branches. Still, a group of procedural measures that offer adequate conditions, even if temporary, would be welcomed."

      Among the "procedural measures" that will be introduced or adopted by the U.S. in exchange for Brazil delaying implementation of countermeasures is establishment of a temporary assistance fund of $147.3 million a year targeted to the Brazilian cotton industry.


This amount equals the value of retaliation attributable to U.S. cotton programs by the WTO and would be provided yearly until passage of the next Farm Bill or a final agreement is reached, whichever is sooner.

      The cotton fund is to be used exclusively for technical assistance and capacity building benefiting the Brazilian cotton industry.

      In addition to establishing the cotton technical assistance fund, the U.S. also agreed to interim procedural changes resolving sanitary and phytosanitary issues that currently impede the import of Brazilian meat products to the U.S.

      According to NCC Chairman Smith the two critical aspects of this interim agreement are that it avoids immediate harmful economic effects of trade retaliation and "puts the serious discussion concerning changes in the U.S. cotton program before Congress in the 2012 farm bill, which is where that discussion belongs."



The COTTON USA Advantage

CCI-FAX – April 5, 2010

      Cotton Day Japan promotions kick off with T-shirt design contest. The annual Cotton Day T-shirt contest allows aspiring designers to utilize cotton as their medium for expression. Residents from Japan and six other overseas countries submitted 2,428 designs. The judging ceremony for the Cotton Day T-shirt contest featured a panel of judges including representatives from major consumer and trade newspapers, the president of Japan Spinners' Association (JSA) and fashion specialists from CCI and Cotton Incorporated. JSA will award cash prizes to the winners, which will be announced at the Cotton Day consumer event in Tokyo on May 10.

      COTTON USA licenses Teri Towel Manufacturing in Malaysia. Teri Towel is a high quality towel manufacturer using 100 percent U.S. cotton yarns from a company in Vietnam. Teri Towel supplied Electrolux with 40,000 high quality 100 percent U.S. cotton towels as premiums. In addition, COTTON USA licensed 6,000 "Horgen" towels, a towel retail brand found in leading department stores (Metrojaya, Parkson Grand, Sogo, Robinsons and Isetan) in Malaysia. Horgen is manufactured by Teri Towel Manufacturing.