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October 16, 2007
US cotton subsidies declared illegal - again
The United States has failed to scrap a series of illegal subsidies paid to American cotton growers, the World Trade Organisation has announced. Such subsidies undermine the economy of countries like Burkina Faso, whose cotton industries are weakened by the unjust American policies.
The US paid $12.5 billion in government subsidies to American farmers between August 1999 and July 2003. Although some subsidies were scrapped, continued subsidies to American cotton producers produced artificially high production and export levels, hurting Brazilian and African producers. Burkina Faso is Africa's leading African cotton producer.
The WTO supported calls by the West African "Group of Four" (Burkina Faso, Benin, Chad and Mali) on the U.S. to make an 82 percent cut in trade-distorting handouts to American cotton farmers as part of a new global trade pact. These four cotton-growing countries are thought to be those most harmed by the U.S. subsidies: But Washington has rejected the cuts.
The impact of US subsidies, low cotton prices, and a weak dollar have brought the efficient Burkina Faso cotton industry to its knees. And this year, Burkina Faso's economic growth rate is set to drop further to 4.25 percent from last year's 5.7 percent due to sharply lower cotton output, because of late rains and flooding.
The WTO ruling could open the door to billions of dollars' in Brazilian trade sanctions against the U.S.
Tags: africa burkina burkina faso us cotton wto trade subsidies
Posted by Keith at October 16, 2007 08:32 AM
