Wednesday, October 8, 2014

U.S. pays $300 million to settle cotton-trading challenge

The United States and Brazil have reached a deal to end a decade-long dispute over U.S. cotton subsidies.

The U.S. will pay Brazil $300 million.

The U.S. was long ago found to be in violation of World Trade Agreement rules by exporting highly-subsidized cotton into world markets, depressing global prices and making it impossible for cotton farmers in poor nations which cannot afford subsidies to continue growing cotton.

There are reports that the deal will be unveiled and signed today in Washington.

The issue is of interest to Canadian grain and oilseed farmers who have long complained that U.S. subsidies depress prices and are unfair competition for Canadian farmers who do not have matching subsidies.