The African Cotton Initiative and WTO Agriculture Negotiations (CRS Report for Congress)
Release Date |
Jan. 16, 2004 |
Report Number |
RS21712 |
Report Type |
Report |
Authors |
Charles E. Hanrahan, Resources, Science, and Industry Division |
Source Agency |
Congressional Research Service |
Summary:
In World Trade Organization (WTO) Negotiations on agriculture, a group of African countries
have
proposed that all subsidies for cotton be eliminated by the end of four years. The proposal also
advocates compensating African cotton producing countries for revenues estimated to be lost due
to cotton subsidies. The United States, which provides substantial production-related subsidies to
cotton producers, agrees that cotton subsidies distort trade, but maintains that the issue should be
negotiated in a comprehensive manner. Disagreement over the African cotton initiative has blocked
progress on an agreement on agriculture in the current round of multilateral trade negotiations known
as the Doha Development Agenda (DDA). How to tackle the question of cotton subsidies -- either
as a stand-alone initiative or as part of a broader agreement to reduce trade-distorting farm subsidies
-- will be on the agenda as DDA negotiations continue in 2004. If the initiative were agreed to as
proposed, U.S. cotton producers would no longer be receiving 2002 farm bill marketing loan, loan
deficiency, or counter-cyclical payments after four years. Under a U.S. alternative proposal for
reduction in trade distorting subsidies, cotton producers could still receive payments under those
programs but in reduced amounts. This report will be updated.