Page last updated at 16:06 GMT, Tuesday, 26 August 2008 17:06 UK

US in '$4bn cotton row sanction'

US cotton farmer harvesting
The US is the world's second-largest producer of cotton

The US may face $4bn (2.2bn) in annual trade sanctions for failing to scrap illegal subsidies paid to US cotton growers, a report suggests.

Brazil, which brought the case, has asked the World Trade Organization (WTO) to impose the punishment, officials told Associated Press.

A WTO panel upheld last year's ruling, that subsidies helped US cotton growers undercut foreign competitors.

Brazil said that its farmers and those in West Africa had suffered most.

It made reference to the $4bn figure in documents it filed to the WTO about three years ago.

Squeezed out

At the time of the ruling being upheld, the US said it was "very disappointed".

US cotton subsidies were one of the most contested issues in the Doha round of world trade talks.

Developing country producers, especially in Africa, say the US subsidies squeeze their own poor farmers out of the market.

About $12.5bn was paid to American farmers by the US government between August 1999 and July 2003, Brazil had claimed.


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