On the last day 03 March, Brazil's definitive victory against US cotton subsidies was conceived. In April 2004, Brazil had already achieved a preliminary victory against the USA and, after North American appeal, the decision to 2004 was upheld by the WTO Appellate Body – last judicial instance. Brazil argued that subsidies granted by the US government to cotton exporters violate international trade rules, as they distort the competitiveness rules of products under development, like Brazil, within the international market. Now, the US must adapt to WTO standards, formulating a new policy, and are subject to sanctions if they fail to comply with them.
For a few decades now, the USA has been the target of international criticism due to cotton subsidies. With the increase in North American subsidies during the Bush administration, the share of American cotton in exports grew from 17% in 1998 for 42% in 2002 e 2003, while there was a drop in prices on the international market. No brazil, for example, there was a reduction in 12,6% in the price of national cotton after adopting this subsidy policy.
The WTO decision could represent something bigger than a merely economic decision. Second Rodrigo Cintra, vice-president of the Argentine-Brazilian Chamber of Commerce of São Paulo, Brazil could gain a leadership position among developing countries in relation to the issue, in addition to opening the doors to new allegations of subsidies by rich nations. "Quanto mais o país conseguir passar esta imagem no cenário internacional, the greater the chances of being able to solidify a group under your leadership and, like this, forçar a criação de uma agenda internacional mais próxima aos seus interesses", says.
For
Cintra, the victory does not qualify Brazil in the face of ongoing international negotiations, but it shows partners that the country is willing to question the WTO if any point of the agreement is not followed. Besides that, victory could guarantee new positions on the part of developing countries in relation to WTO agreements.
"Cada decisão tomada na OMC significa um novo passo rumo ao padrão que norteará o comportamento dos países", reports
Cintra.
"Vitórias de países em desenvolvimento estimulam os demais a ingressarem com contestações, increasing its pressure capacity and, therefore,
influenciando nos destinos do padrão do comércio internacional", complements.
According to Cintra, the discussion of agricultural subsidies, in this case, strengthened the power of the majority, contrary to the will of the USA, who preferred to discuss the issue only with the WTO. "Assim, both developed and developing countries are beginning to bring discussion to a forum of common interest. From this moment, a força deve ser direcionada para a capacidade que cada uma das partes terá em sustentar suas estratégias", concludes Cintra.
Originally published in:
Knowledge – 09/03/05
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