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Cotton Battle Concludes Between US and Brazil

Oct. 1, 2014
In addition to other conditions, the United States will pay $300 million to the Brazilian Cotton Institute to settle the trade battle.

WASHINGTON - The United States and Brazil closed a 12-year-old fight over U.S. cotton subsidies Wednesday, with the U.S. paying $300 million to the Brazilian Cotton Institute to settle the trade battle.

U.S. 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 U.S. policies remain in place.

The U.S., meanwhile, must hold to the conditions under its current farm support policies, which Brazil, the world's fourth-largest exporter, took aim at first in 2002 due to U.S. subsidies ruled in violation of WTO rules.

That includes keeping limitations on how Washington's export guarantees are provided to cotton exporters, so as not to give them unfair advantage in the global marketplace.

"Today's agreement brings to a close a matter which put hundreds of millions of dollars in U.S. exports at risk," Froman said in a statement.

"The United States and Brazil look forward to building on this significant progress in our bilateral economic relationship."

Copyright Agence France-Presse, 2014

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