U.S. loses WTO appeal in Brazil cotton subsidy dispute

GENEVA — The United States lost its final appeal Monday in a billion-dollar trade dispute with Brazil over subsidies to U.S. cotton growers.

A World Trade Organization appeals panel reversed parts of a ruling made in December, but found that on the whole the U.S. payments breached global commerce agreements.

Brazil can now ask the WTO to authorize retaliatory trade sanctions on the U.S. that could run into the billions of dollars until Washington scraps the payments.

U.S. lawmakers voted last month to overturn a veto by President Bush and force through a farm bill worth $290 billion that would largely maintain the cotton payments for the next five years.

U.S. trade officials said they were disappointed with the WTO panel’s ruling and rejected Brazil’s complaint that the payments distorted the global cotton market.

“We believe that the changes made by the United States brought the challenged payments and guarantees into full compliance with the WTO’s recommendations and rulings in the original cotton dispute,” said Sean Spicer, spokesman for the U.S. trade representative.

“There is no basis to say that U.S. payments are today having any impact on cotton prices,” he added.

Brazil and several West African cotton-producing countries have long claimed that their farmers suffer because of Washington’s payments to U.S. cotton growers, which amount to about $3 billion a year.