The National Cotton Council is disappointed with the ruling by the appellate body of the World Trade Organization. As we have stated before, there were several aspects of the Panel’s findings that we believe are inconsistent with the intent of the Agriculture Agreement and are inconsistent with long-standing interpretations of that agreement.
Our initial, cursory review of the findings of the Appellate Body indicates that it upheld the Panel decision in most respects, including its determinations concerning the export credit guarantee program, cotton’s step 2 program, classification of direct payments, and serious prejudice. While the Appellate Body did modify somewhat the Panel’s decision regarding aspects of the Peace Clause analysis, those modifications did not alter the final result that the Peace Clause did not shield the U.S. cotton program from Brazil’s allegations.
The National Cotton Council will be closely reviewing the Appellate Body’s analysis over the next few days and will consult with the Administration and Congress on this decision. There will be no immediate changes in the U.S. cotton program. We will, however, work with Congress and the Administration to formulate an appropriate response to this decision.