WTO Watch: Dispute Settlement Panel Upholds Ruling on U.S. Cotton Subsidies

The U.S. has lost its appeal to the WTO Appellate Body seeking to overturn a prior panel’s judgment finding that U.S. cotton subsidy programs violate WTO rules. (Update: The 288-page report can be found here). I do not believe the U.S has any further recourse within the WTO system, although compliance will likely take a very long time. Congress would have to, for instance, end all (or most) cotton subsidies worth about $12.5 billion annually. Moreover, if the U.S. does not comply, the remedy is for Brazil (the plaintiff, so to speak) to impose trade sanctions on the U.S. Whether that is enough to push the U.S. into compliance is hard to say.

Still, it is worthwhile noting that no one thinks Brazil could enforce this WTO judgment in federal court. The decision on whether and how to comply with this judgment, requiring the elimination of billions in annual subsidies, is held by Congress and Congress alone.