WASHINGTON (Commodity Online): Obama administration’s subsidy program for Cotton farmers has angered several nations in the past and things are precipitating into a controversy now with Brazil planning retaliatory measures.

America’s refusal to comply with adverse WTO rulings erodes US credibility and influence in the debate shaping globalization and undermines the multilateral trading system. America can afford neither trade retaliation nor the loss of its leadership position in international economic issues and the WTO is already weakened by the nations’ inability to conclude Doha Round trade negotiations.

The 2001 WTO meeting in Doha, Qatar, also called the Development Round, pledged to enable developing countries to “secure a share in the growth of world trade commensurate with the needs of their economic development”

The Obama administration is seeking to defuse a crisis in trade ties with Brazil after the Latin American country unveiled a widely anticipated retaliatory tariff against a wide range of US imports, including intellectual property.

The Brazil action was feared for long but didn’t get the priority attention it deserved in Washington. Visiting US commerce secretary Gary Locke said Washington was seeking talks with Brasilia before the retaliatory tariffs come into effect in 30 days but Brazilian officials said no proposals were on the table yet.

Brazil decided on the retaliatory tariffs after waiting for the United States to sort out subsidies offered to Cotton growers under its widely criticized cotton subsidies program. Brazil protested the subsidies in 2002, then again in 2005, 2008 and 2009 and won rulings from the World Trade Organization that called the subsidies discriminatory.

A 2005 WTO decision authorized Brazil to retaliate against US goods and services but Brazil opted instead to allow the US time to reform its cotton program.

Brazil's original WTO complaint, filed in 2002, alleged that several US cotton subsidy programs, enacted or continued in the 2002 US Farm Bill, violated the United States’ obligations under the general agreement on Tariffs and Trade, as well as the WTO’s agreement on subsidies and countervailing measures and the agreement on agriculture.

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