While the negotiations of the Doha Round continue without any real breakthrough, the Dispute Settlement Body (DSB) on October 15 confirmed its ruling against the U.S. policy to support its cotton industry.
This is the second time the DSB has taken action against the United States on this issue: it ruled in favor of Brazil in September 2004. However, Brazil resubmitted the case two years later, claiming that the measures taken by Washington did not limit the impact American subsidies have on the world cotton market. Once again, the WTO ruled in Brasilia’s favor. According to a U.S. representative in Geneva, the DSB found that the changes made subsequent to the first ruling were insufficient "to bring the challenged measures — certain support payments under the 2002 Farm Bill and export credit guarantees — into conformity with U.S. WTO obligations."
This latest ruling opens the possibility of Brazilian trade sanctions, however, "it is very, very difficult to adopt measures against the United States," said Brazilian Agriculture Minister Reinhold Stephanes at a meeting in Brussels on October 16. "[The U.S.] is a big power and a big trading partner," he added, saying that the "victory has a moral effect only."
In Burkina Faso, one of Africa's leading cotton producers and exporters, officials applauded the decision but remained cautious. "We hope that at the U.S.-executive level, officials will feel embarrassed for always being pointed at and that something can be done to implement the [WTO] ruling. But the problem remains with the U.S. Congress which is under strong pressure from the US cotton industry lobby," said Seriba Ouattara, Director General of Commerce. "Subsidies are preventing us from living. If nothing is done, we can now say that nobody wants us to develop," added François Traoré, President of the African Cotton Producers Association (Aproca).
This further inflames diplomatic relations between Brazil and the United States, which have been accusing one another for causing the impasse with the Doha Cycle. The United States condemns the joint position taken by 110 developing countries (led by Brazil, South Africa and India) that are calling for the NAMA (non-agricultural market access) compromise document to be modified; Brazil blames the developed countries. Brazil's Foreign Ministry, speaking through its top negotiator Roberto Azevedo, lamented that "the U.S., the EU, the other developed countries are picking and choosing the provisions of the agriculture text they can live with." And Reinhold Stephanes no longer believes that the Doha Round can have a positive outcome. If there is an agreement, it won't have any "tangible effects" for agriculture. "It is the need to import food that will ensure regulation of the world market over the next few years," he said. According to Stephanes, many countries will have to open their borders to agricultural products, following Europe's recent move on wheat, to prevent inflation. Finally, he recommends that, rather than pushing along with multilateral negotiations, Brazil would be better off signing specific trade treaties with different countries, even while many specialists, from both institutions and civil society alike, insist on the negative affects of an increasing number of bilateral agreements.
The current legal impasse in the negotiations must be overcome and the terms of the debate must be reconsidered at the strategic and economic levels. These two conditions are essential if the Doha Round is ever to stop being the cycle of developing "every man for himself," and finally become the cycle of "development and cooperation."