NCC Responds to Post Editorial on Brazil WTO Case

In their crusade against the cotton industry, Post editors are quick with inflammatory adjectives but short on facts when it comes to agricultural policy and trade disputes. They cite historical spending but decline to note that spending on the price-based provisions involved in the Brazil dispute likely will be zero for the 2010 crop. They fail to note that the WTO found no fault with direct payments and crop insurance, which are included in the total payments cited in the editorial. The WTO did not rule that cotton programs under the current 2008 farm bill violate U.S. trade commitments, but instead ruled that selected cotton provisions from the 2002 farm bill, along with export credit guarantee programs for essentially all commodities were either causing significant price suppression or were prohibited subsidies. Amazingly, the editorial does not mention the export credit programs even though the vast majority of possible trade retaliation is associated with these programs. The editorial claims subsidies allow U.S. farmers to compete with lower cost producers. Do the editors have a way to accurately determine production costs in non-market economies? Why doesn’t the Post acknowledge that selectively applied free-trade policy has decimated the U.S. cotton farmers’ domestic customers and shifted those textile jobs to heavily subsidized manufacturers in China? By negotiating a modest fund with Brazil that cannot be used for payments to Brazilian farmers but is confined to capacity building and technical assistance projects, the U.S. has protected manufacturing jobs and avoided the harmful effects of retaliation. While retaliation is suspended, Congress will legislate program changes as part of the 2012 farm bill. And as for the WTO Doha round, China, India and Brazil refuse to negotiate expanded market access claiming special circumstances as developing countries. Now there is an editorial waiting to be written.