The WTO Picture after the Cotton Ruling
In early March, the World Trade Organization (WTO) released its report on the U.S. appeal in the cotton dispute with Brazil. The appellate ruling upheld much of the original ruling, including the finding that production flexibility contract (PFC) payments and direct payments are not Green Box measures. This means that these payments are to be counted against the agricultural support limit the United States agreed to under the current WTO Agreement on Agriculture. The rulings also state that the payments from the Step 2 program, marketing loan program, crop insurance, production flexibility contracts, market loss assistance, and other listed programs grant support specific to cotton and that they caused significant price suppression in the world cotton market.