WASHINGTON, April 18, 2012 -Top trade officials from the U.S. and Brazil met in Washington, D.C. on Tuesday for their second quarterly meeting to discuss their Memorandum of Understanding (MOU) and a Framework Agreement developed as a result of Brazil’s successful challenge to U.S. farm and export programs under the World Trade Organization (WTO) rules.
“We continue to make progress,” noted U.S. Trade Ambassador Isi Siddiqui during an interview with Agri-Pulse Tuesday. “The focus of the framework discussions are on potential changes in the U.S. export credit guarantee program (GSM-102) and the domestic support for cotton, which has two parts of concern in the WTO decision: the counter-cyclical payments and the marketing loan program.” Siddiqui said discussions also focused on how the transfer of $147.3 million in trade retaliation funds are being used in Brazil.
In January, Brazilian Representative Roberto Azevedo sent a letter to Senate Agriculture Committee Chairman Debbie Stabenow, outlining a long list of changes that his government would like to see made in U.S. cotton programs and trade policy in order for it to be “less trade-distorting.” At that time, Azevedo wrote that the National Cotton Council’s STAX proposal would “likely result in the highest level of trade distortion of all of the proposals examined by us,” but failed to define what type of program would actually be acceptable.
Siddiqui said the Brazilians “continue to make the same points that they made in the letter. Nothing has changed there.” But he expressed confidence that these issues will be addressed as lawmakers write the 2012 Farm Bill. “The issue is with the trade-distorting nature of the programs in place between 1999-2005,” he added. “If Congress makes changes where it (the cotton program) is less trade distorting, USTR will work in terms of setting that kind of program and reaching a mutually agreed upon solution,” he added.
Siddiqui said the GSM-102 program will need to be modified to make it more market-based and risk based, “more comparable to private sector financing.” He suggested shortening the duration of loans to 180 days and increasing the loan premiums as examples of possible changes.
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Original story printed in April 18th, 2012 Agri-Pulse Newsletter.
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