Jason Barton

Professional Information and Energy News

U.S. and Brazil Reach Agreement on Cotton Dispute

without comments

There are two important relationships that I see between this decision and biofuels:

1. Brazil’s push for the U.S. to increase trade liberalization by reducing subsidies to cotton growers is similar to their push for the U.S. to lower its tariffs on imported ethanol. Brazil recently eliminated their own tariff on ethanol, and made it clear this was in part an effort to force us to do the same.

2. If people claim that diverting land from food to fuel is causing deforestation and driving up food prices (known as indirect land use changes, or ILUCs), why don’t we hear the same complaints about using agricultural land for fiber? The complaints may be valid, but it’s interesting that they aren’t applied to cotton. Cotton is certainly important, I’m wearing clothes right now, but transportation fuel is also important, so why the double standard?

The intellectual property rights discussed later in the article are another interesting matter, but that’s a whole other story.

Published: April 6, 2010
WASHINGTON — The United States and Brazil have reached an agreement aimed at settling a long-standing trade dispute over American subsidies to cotton growers, officials in both countries said Tuesday.

The announcement came one day before Brazil was to begin imposing up to $830 million in sanctions with authorization from the World Trade Organization. The trade body had ruled last August that American subsidies to cotton growers had violated global trade rules.


Brazil had threatened, for example, to stop charging its farmers technology fees for seeds developed by American biotechnology companies and to break American pharmaceutical patents before their scheduled expiration. Those retaliatory actions would have cost American businesses up to $239 million.

“Traditionally, retaliation in trade has been the preserve of the largest developed countries, which have market power,” said Robert Z. Lawrence, a professor of international trade and finance at the Harvard Kennedy School. “But this mechanism — suspending intellectual property protection — gives smaller, developing countries a way to enforce their rights under trade rules.”

Read the entire article here.

Written by Jason

April 6th, 2010 at 5:09 pm