Over ten years of dispute ends not with a bang, but with a whimper.
Well, that’s the end of the much-discussed WTO fight over cotton between Brazil and USA. US taxpayers will pay $300 million to the Brazilian Cotton Institute. And Brazil will agree not to complain again until the next Farm Bill, if ever.
I’ve been following this dispute over Brazilian cotton since 2002, through many twists and turns. Brazil’s legal case was innovative and successful. It was a very hard-fought, with the US resisting mightily (legally and politically). It had the potential to be quite transformative by reducing the impunity that rich countries enjoy in setting trade and subsidy rules. Brazil was also exploring innovative and powerful ways to retaliate, including waiving US copyright and patents. That could have been game-changing.
As a secondary though important impact, success in the case could really have helped cotton farmers in poorer countries by raising cotton prices and reducing the flood of US cotton exports.
But, in the end, it was a deflated balloon. A payment from a rich country to a less rich country. Not much real reform in US cotton subsidies. Not much real assistance to poor cotton farmers, or to poor countries producing cotton.
Poorer countries stood by, cheerleading Brazil. Being used as props in the trade debate, they got nothing but dribs and drabs in the end.
In the years that Brazil and the US have been arguing over cotton subsidies, cotton prices and have gone from very low to very high and back again. Currently, cotton prices are quite low, which is bad for cotton farmers – unless of course they’re protected by generous subsidies from the US Government. In the meantime, in West Africa, as many as 10 million cotton farmers struggle to make a living with very little support from anyone.
I’m sad about this.