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Washington moves to curtail cotton subsidies

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by Brian Turner
Washington moves to curtail cotton subsidies

The Bush administration said on Tuesday that it would advance a proposal to Congress to eliminate a subsidy program that had paid millers and exporters of cotton over $2.4 billion over the past decade.

The US is taking this action after the World Trade Organization said that he program is against world trade rules and that it has kept cotton prices low worldwide.

That has hurt cotton farmers in Brazil and the rest of the developing world.

The move comes a week after the European Union announced that it would cut sugar subsidies after Brazil brought a similar case before the WTO.

The US undersecretary of agriculture, J. B. Penn, said that the move by the administration was meant to signal to the world that the US was prepared to play by the rules set by the WTO and that other nations should also do so.

However the US Congress must make the actual changes to the subsidy program in question, which is certain to be opposed by the cotton industry and agricultural interests which have been quite successful in the past at making sure farm subsidies are maintained.

Brazil called the proposal “a step in the right direction”, but added that the US must comply with the whole WTO ruling.

Subsidies to farmers with cotton to be sold domestically in the US would not be affected by the proposed legislation.

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News posted: July 6, 2005

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