US, Brazil resolve long-running cotton fight

 WASHINGTON, Oct 02 (AFP): The United States and Brazil closed a 12-year-old fight over US cotton subsidies yesterday, with the US paying $300 million to the Brazilian Cotton Institute to settle the trade battle.
US Trade Representative Michael Froman said Brazil had agreed to end its World Trade Organization case against the world's largest cotton exporter, and to not lodge any new actions as long as current US policies remain in place.
The US meanwhile must hold to the conditions under its current farm support policies. That includes keeping new limits on export credits and guarantees provided to cotton exporters, so as not to give them unfair advantage in the global marketplace.
Brazil, the world's fourth-largest cotton exporter, first raised objections to US cotton subsidies in 2002, saying US subsidies violated WTO rules.
The WTO ruled in Brazil's favor in 2005 and again in 2008, allowing Brasilia to impose countermeasures against US trade.
That verdict raised US worries about losing market access and intellectual property protection in Brazil, as well as the United States's 28 percent share of global cotton trade.
What led to the deal announced Wednesday was an interim agreement in 2010 for Brazil not to take retaliatory action, backed by payments to the country, and then the passage of a new farm bill by the US Congress in February this year which tightened US cotton support programs and export guarantee programs.