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Last Updated: Friday, 18 June 2004, 22:31 GMT 23:31 UK
US 'to fight back' in cotton war
Cotton pickers
Cotton subsidies are accused of perpetuating poverty
The US has said it intends to appeal against a World Trade Organisation ruling that US cotton subsidies harm poor farmers from Brazil.

The WTO on Friday said it had decided to uphold an initial decision made in April after a complaint from Brazil.

Brazil had objected that US farmers got cotton subsidies of almost $4bn (2.2bn) from 2001 and 2002 for a crop that was worth $3bn.

"We are very satisfied," a Brazilian Foreign Ministry official said.

But a spokesman for US Trade Representative Robert Zoellick said the US had "serious concerns" and would appeal.

'No surrender'

Mr Zoellick's spokesman, Richard Mills said: "We will defend US agriculture in every forum we need to and have no intention of unilaterally disarming."

The US believes that US farm aid was "fully consistent" with its obligations to fair, open trade under WTO treaties.

Brazil had argued that US subsidies cost its farmers $600m in lost cotton sales from 2001 to 2002 because US farmers could sell cotton below cost price.

Although an appeal could take months, the ruling is seen as potentially influencing separate, slow-moving WTO negotiations seeking to adjust global rules on farm aid by strengthening the hand of poorer countries.

Wider agenda

African nations have frequently objected in WTO trade talks to EU subsidies to European farmers, as well as to US farm aid.

Several West African cotton producers - Mali, Burkina Faso, Chad, and Benin - have said US cotton subsidies harm their farmers, though they have not made an official complaint to the WTO.

Tensions between rich and poor nations over farm subsidies contributed to the stalemate at the WTO's ministerial summit at Cancun in Mexico in 2003.

At that summit, Brazil emerged as the leader of a new grouping of developing nations, known then as the G20, though it has since expanded to become the G22.

The bloc set out to oppose trade policies it saw as disadvantaging the world's poor.

The BBC's Andrew Walker
"A group of African cotton producing nations are campaigning for a WTO agreement to eliminate cotton subsidies"

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