v16_2005k - 206 Christine M. Makori 10 REFORMING THE COTTON...

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206 Christine M. Makori 7 10 Christine M. Makori is a Master of Arts candidate in Law and Diplomacy at the Fletcher School of Law and Diplomacy, Tufts University (Christine.Makori@tufts.edu). R EFORMING THE C OTTON T RADE O RDER ? A N A NALYSIS OF C OTTON S UBSIDIES AND I MPLICATIONS FOR S USTAINABLE D EVELOPMENT Christine M. Makori Cotton is the most widely produced cash crop in the develop- ing world. It supports the livelihoods of numerous households in these countries and occupies a signiFcant position both economically and politically. However, in the recent past, this sector has experienced a pricing crisis mainly attributed to subsidies of developed nations. This article analyzes the effects of cotton subsidies (the most controversial agricultural commodity in the ongoing trade negotiations) on sustainable development, focusing on the impacts of U.S. subsidies on four West African countries. Given that these support systems have political motivations, the article briefly surveys political challenges to subsidy reforms. In conclusion, the article makes speciFc recommendations to the WTO and national govern- ments to promote free trade, enhance economic efFciency, and support the global Fght against poverty.
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207 Reforming the Cotton Trade Order?An Analysis of Cotton Subsidies and Implications for Sustainable Development I NTRODUCTION Cotton is the most widely produced crop in the developing world. As such, close to one billion people derive their means of livelihood from its pro- duction and marketing (International Cotton Advisory Committee 2002, 2). Among these are small-scale farmers in Brazil and the arid regions of West Africa (Burkina Faso, Chad, Benin, and Mali). However, in the last few years, there has been a crisis in the industry due to declining world prices primarily caused by heavily contested agricultural subsidies. At the center of the controversy are subsidies awarded to cotton farmers by the United States and the European Union (EU). The signi±cance of the damage to the industry is exempli±ed by Brazil’s ±ling of a complaint to the Dispute Settlement Body (DSB) of the World Trade Organization (WTO) against the United States. Australia and some West African countries supported this action. It alleged that U.S. cotton subsidies were in violation of WTO agreements. Brazil further complained that the statutory instruments providing the subsidies were inconsistent with WTO law and requested the DSB to investigate the matter (WTO 2003b and 2003c). In April 2004, the DSB Panel report concluded that U.S. actions inconsistent with the WTO agreements nulli±ed or impaired bene±ts accruing to Brazil (WTO 2004 ) . It recommended that the United States withdraw the inconsistent measures within six months of the adoption of the DSB report or by July 1, 2005, whichever is earlier. The United States ±led its noti±cation of appeal before the Appellate Body, which also ruled that the subsidies were inconsistent with WTO law (WTO 2005). In the meantime, the subsidies
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v16_2005k - 206 Christine M. Makori 10 REFORMING THE COTTON...

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