MEMPHIS - The House of Representatives today defeated an amendment offered by Rep. Ron Kind (D-WI) that would have prevented payments from the Commodity Conservation Corporation (CCC) to the Brazilian Cotton Institute.
Brazil was authorized by the World Trade Organization (WTO) to carry out trade retaliation stemming from a dispute with respect to the operation of the U.S. export credit guarantee program and certain provisions of the upland cotton program. Under the Framework, Brazil suspends trade retaliation while the United States commits to administrative adjustments in the export credit program’s operation and funds a technical assistance and capacity building program in Brazil. Further, the agreement ends with the development of the 2012 farm bill that would contain mutually agreed-upon outcomes on upland cotton provisions, ultimately bringing a dispute settlement.
The cessation of CCC payments as sought in the amendment would have violated a condition of the agreement and jeopardized the suspension of trade retaliation by Brazil. Brazil previously published a list of 102 products scheduled for increased tariffs as a result of the WTO authorization. Additionally, Brazil published a list of 21 items under consideration for cross-retaliation through suspension of patent and intellectual property rights.
The Framework provides an opportunity to conduct consultations and bring about an orderly adjustment of U.S. programs to comply with WTO obligations while avoiding costly and disruptive trade actions that damage the economic interests of both countries. The U.S. upland cotton program was altered significantly in 2006 and again in the Food, Conservation and Energy Act of 2008. The GSM export credit guarantee program also has been substantially transformed over the past four years.
National Cotton Council Chairman Charles H. Parker, a Senath, MO, cotton producer, stated, “U.S. cotton industry leaders are encouraged that the Framework Agreement has been sustained and are committed to work with all parties to resolve the dispute.