New Internationalist

Cotton worm turns

June 2005

Will the US follow WTO rulings as it urges poor countries to do?

FINGER-WAGGING Northern politicians defend the gospel of free trade whenever some Southern government is caught protecting a fledgling industry, scarce jobs or a struggling marketing board. But a March ruling by the World Trade Organization (WTO) that US subsidies to its cotton industry are illegal means that the worm can turn. The case was the first formal challenge to the massive agricultural subsidies handed out by rich nations to their farmers – a practice that critics say destroys the competitiveness of agricultural exports from the developing world. The ruling will put to the test the commitment by the Bush Administration to abide by the rules of the global trade arbiter, as it has frequently urged developing countries to do.

A petition by Brazil against several types of US agricultural support measures – which was supported by some West African cottonproducing nations – was upheld by the WTO last September. Brazil charged that subsidies paid to US farmers growing cotton from 1999 to 2002, and others mandated through to 2007, violate WTO rules: unfairly boosting US agricultural production, flooding the world market with cheaper goods and driving down prices. While Washington denies its actions distort production and trade, a report from the Institute for Agriculture and Trade Policy (IATP) in 2003 says that cotton was exported from the US at 47 per cent below its cost of production.

‘The case against US cotton dumping is overwhelming,’ said Celine Charveriat, spokeswoman for Oxfam’s Make Trade Fair campaign. ‘The debate is over. The US must now move quickly to reform its programmes and stop dumping cheap cotton on to world markets that undermines the livelihoods of poor farmers in the developing world.’

Development groups estimate that US dumping caused losses of almost $400 million between 2001 and 2003 for poor African cotton-producing countries. More than 10 million people in West Africa depend directly on their crops, which – according to Oxfam – will typically earn each small-scale West African cotton producer less than $400 per year. Two million cotton farmers in Mali were recently pressured to accept a price drop of 25 per cent, and many of them will now be unable to cover their production costs. ‘The US must become aware that small developing countries also have rights in the global trade system, otherwise they risk a new wave of resistance from African countries and farmers,’ warns Soloba Mady Keita, the president of the cotton producers’ association in Kita, western Mali.

The ruling opens a Pandora’s Box of potential WTO challenges against several other US subsidies and similar programmes in Europe and elsewhere. Thus Brazilian soybean growers are now considering pushing their government to bring another WTO challenge to US subsidies for soybeans.

This column was published in the June 2005 issue of New Internationalist. To read more, buy this issue or subscribe.

Comments on Cotton worm turns

Leave your comment


  • Maximum characters allowed: 5000
  • Simple HTML allowed: bold, italic, and links

Registration is quick and easy. Plus you won’t have to re-type the blurry words to comment!
Register | Login

...And all is quiet.

Subscribe to Comments for this articleArticle Comment Feed RSS 2.0

Guidelines: Please be respectful of others when posting your reply.

Get our free fortnightly eNews


Videos from visionOntv’s globalviews channel.

Related articles

Recently in Currents

All Currents

Popular tags

All tags

This article was originally published in issue 379

New Internationalist Magazine issue 379
Issue 379

More articles from this issue

  • Introduction

    June 1, 2005

    Introducing nurse Nancy Wambui Itotia, her dilemma – and her country's. Vanessa Baird reports.

  • Hope FM

    June 1, 2005

    To Kenya with Nancy to see what she has left behind – and the effect that the money she sends home has on her family.

  • The Neocons

    June 1, 2005

    George W Bush goes for broke with his neocon appointees to the World Bank, the UN and UNICEF.

New Internationalist Magazine Issue 436

If you would like to know something about what's actually going on, rather than what people would like you to think was going on, then read the New Internationalist.

– Emma Thompson –

A subscription to suit you

Save money with a digital subscription. Give a gift subscription that will last all year. Or get yourself a free trial to New Internationalist. See our choice of offers.