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Last Updated: Wednesday, 8 September, 2004, 22:59 GMT 23:59 UK
Brazil wins double trade victory
Cotton pickers
Agricultural subsidies "harm developing world farmers"
The World Trade Organisation has backed Brazilian complaints against US cotton subsidies and European Union support for sugar producers.

The decisions mark a victory for Brazil, Latin America's biggest agricultural exporter.

The WTO said the US had paid illegal subsidies worth $3.2bn (1.7bn) to its cotton farmers.

In a separate ruling, it said the EU had exported more sugar than it was allowed to under world trade rules.

The US announced that it would launch an appeal against parts of the WTO cotton ruling within the next two months.

The EU said it would study the Geneva-based body's decision on sugar before deciding whether to appeal.

These rulings are a triumph for developing countries
Phil Bloomer, Oxfam International

Trade campaigners said the WTO decisions showed that the tide was turning against the US and the EU's farm subsidy regimes.

"These rulings are a triumph for developing countries, and a warning for rich countries whose unfair systems are creating misery and poverty for millions," said Phil Bloomer at Oxfam International.

"This is a signal that the modus operandi of the rich and powerful in the WTO getting away with anything they like will no longer be tolerated."

'Overproduction'

Critics of EU and US subsidies say they encourage overproduction, depressing world prices for agricultural commodities and harming the livelihoods of farmers in the developing world.

Some analysts believe that the rulings could encourage other poor nations dependent on farm exports to challenge the EU and US subsidy regimes at the WTO.

Wednesday's WTO decision on sugar and cotton confirm preliminary rulings issued earlier this year.

"We were pleased before, but we are much more pleased now," said Roberto Azevedo, a senior trade official in Brazil's foreign ministry.

The complaint against the EU sugar regime was lodged jointly by Brazil, Thailand and Australia.




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