March 03, 2005
Free Market Miracle #0016
The World Trade Organization on Thursday upheld a ruling condemning government help for cotton producers in the United States, saying that many U.S. programs include illegal export subsidies or domestic payments that are higher than permitted by WTO rules.
The WTO appeals body rejected a U.S. attempt to overturn a September 2004 ruling by an independent panel of trade experts, which acted on a complaint from Brazil.
Brazil had alleged that the United States kept its place as the planet's second-largest cotton grower and largest exporter because the U.S. government paid $12.5 billion in subsidies to American farmers between August 1999 and July 2003.
The United States had insisted that its payments to farmers are within permitted levels, claiming many are not subsidies as defined by WTO.
Oxfam estimates that U.S. dumping caused losses of almost $400 million between 2001 and 2003 for poor African cotton-producing countries, where more than 10 million people depend directly on the crop. A typical small-scale West African cotton producer makes less than $400 a year on his crop. Two million cotton farmers in Mali were recently pressured to accept a further price drop of 25 percent -- many of them will not now be able to cover their production costs.
The majority (78 percent) of U.S. cotton subsidies benefit the largest 10 percent of cotton producers. Loopholes in the subsidy rules allow industrial-sized farms to collect payments in excess of $1 million, while smaller farmers in the U.S. and abroad are driven out of farming by low commodity prices and high land costs.
The case has implications beyond cotton. "This case raises deep questions about the entire U.S. subsidy system. U.S. subsidies have distorted global markets, failed to save small US farmers, and promoted environmental damage. The U.S. should see this ruling as an opportunity for reform," [Oxfam's Celine] Charveriat said.
I'm telling you people, the day draws nigh that the Bush Administration will declare the WTO "anachronistic" (to choose a word that Madeleine Albright once used to describe Security Council resolutions concerning the Israel-Palestine issue), and abandon the agreement altogether.
And as the Bush Administration continues to isolate this country from the rest of the World, the day draws nigh that its citizens will be forced to -- gasp! -- learn how to live upon the country's own human and natural resources, rather than stealing from the rest of the World. Will we be up to the task?
Update, 3/4/05: The trade judges rejected an appeal by the U.S., which now will have to bring its subsidies into line with the rules." [Emphasis added.] Quelle horreur! Isn't it a bitch to be forced into following the rules which you yourself established, and which you expect the rest of the world to follow?
Of course, it remains to be seen whether the U.S. will indeed comply with the ruling. But, unlike recent Supreme Court rulings not in its favour -- which the Bush Administration more less ignores -- this ruling may actually have some fangs: if the U.S. doesn't, then the rest of the world will presumably be given the go-ahead to enact its own subsidies, or to dis-allow U.S. agricultural imports altogether.
Posted by Eddie Tews at March 3, 2005 10:24 AM
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