US moves to comply with WTO over cotton

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A week after the European Union said that it will cut sugar subsidies after Brazil brought a case objecting to the effect those subsidies have on the developing nations, the Bush administration said on Tuesday that it would propose to Congress that legislation be enacted to cut a subsidy program that paid over $2.4 billion dollars to millers and exporters of cotton in the past ten years. The action is being taken after a decision by the World Trade Organization that the program violates world trade rules and keeps cotton prices too low worldwide, hurting cotton farmers in Brazil and other developing nations. Brazil said that the proposal was a step in the right direction, adding that it will be watching to see that the US complies with the entire WTO decision. Meanwhile J. B. Penn, the US undersecretary of agriculture, said that the administration proposal was a signal to the world that the US would play by WTO rules and that the rest of the world should follow suit. The US Congress, however, has to make the change to the subsidy program in question. Legislation to do that will likely be opposed by the cotton industry and other agricultural interests which have successfully lobbied to retain subsidies in the past. The proposal would only affect cotton for export; subsidy programs for cotton raised for domestic sale would remain unchanged.