Foot Dragging or Strategic Withdrawal? The Cotton Dispute and Executive Compliance by Mark Langevin

New paper from Mark Langevin in the Journal of World Trade

US – Upland Cotton (DS267), known as the cotton dispute, revealed the limits of the World Trade Organization’s Dispute Settlement Understanding and pitted US agricultural and trade policies against Brazil’s comparative advantages in cotton cultivation. More than any other case, this trade dispute exposed the underlying challenges to advancing the Doha Development Agenda. This article explores US compliance with the Dispute Settlement Body’s successive rulings from 2005 to 2009 by examining executive compliance efforts in the face of congressional foot dragging, and how such efforts shaped the evolution of this trade conflict and framed its resolution in October of 2014. The examination confirms the pivotal role that congress played in preventing full compliance, but also reveals the importance of executive administrative discretion, legislative advocacy, and trade policy orientation in determining the outcome of the cotton dispute and its eventual impact upon US global trade liberalization leadership, including the US government’s strategic withdrawal from the Doha round.

Read the entire paper here.

O backstop brasileiro: a modernização da agricultura brasileira e a sua contribuição para o desenvolvimento nacional by Mark Langevin

O backstop brasileiro: a modernização da agricultura brasileira e a sua contribuição para o desenvolvimento nacional

Revista Jurídica da Presidência

v. 19, n. 119 (2018

Mark S. Langevin

Resumo

Este trabalho analisa o papel da agricultura brasileira para o desenvolvimento econômico do país ante o atual cenário de recessão. Primeiramente, faz-se uma análise dos ganhos mensuráveis do Brasil no desenvolvimento agrícola nas duas últimas décadas. Depois, são avaliadas as contribuições desse setor para os desenvolvimentos econômico e social no século XXI. Então, aborda-se o Caso do Algodão a fim de ilustrar a modernização agrícola brasileira e suas contribuições para o desenvolvimento e para a política comercial. Por fim, são explorados os desafios da inclusão social e da sustentabilidade ambiental como obstáculos primários para o aprofundamento do desenvolvimento agrícola brasileiro no século XXI.

Lei aqui.

The Brazil - United States Cotton Dispute: An Annotated Bibliography by Mark Langevin

The Brazil–United States Cotton Dispute

Annotated Bibliography

Updated August 2017

Compiled by Mark S. Langevin, Ph.D., Director of the Brazil Initiative

Elliott School of International Affairs-The George Washington University

langevin@gwu.edu/Tel. 202-744-0072

            The Brazil–United States cotton dispute was a World Trade Organization (WTO) dispute settlement case (DS267). The case focused on United States cotton production support programs and agricultural commodity export credit guarantee programs that were found to be non-compliant with the WTO Agreement on Agriculture (AoA) and the Subsidies and Counter Measures (SCM) Agreement. Brazil brought the case to the WTO in 2002. The WTO’s Dispute Settlement Body (DSB) ordered the U.S. government to eliminate its cotton production subsidies as well as its agricultural commodity export guarantee programs in 2005. The United States appealed, but eventually lost the case altogether in 2009 when the WTO arbitrator approved the largest trade sanctions in history. The arbitrator also ruled that Brazil could impose so-called “cross-retaliation measures” that could include intellectual property protections.

            Following the 2009 decision, the U.S. government quickly moved toward negotiations with Brazil. In early 2010, a temporary bilateral agreement was negotiated and the U.S. agreed to pay the Brazilian Cotton Institute $147.3 million a year, an amount based on the WTO arbitrator’s calculation of average annual damages to Brazilian cotton growers, until a mutually agreeable solution could be negotiated. On May 17, 2013, the Brazilian cotton producer’s association, known as the Associação Brasileira dos Produtores de Algodão, and the U.S. National Cotton Council signed a “Letter of Joint Recommendations” that aimed to assist the two governments in negotiating a final solution to the case.

On October 1, 2014, Brazil and the United States reached an agreement to resolve the long-running cotton dispute by signing a new memorandum of understanding (MOU) that included: 1) Brazil relinquished its rights to countermeasures against U.S. trade or any further proceedings in the dispute; 2) the United States agreed to new rules governing fees and tenor for the GSM-102 export credit guarantee program; 3) Brazil agreed to a temporary Peace Clause with respect to any new WTO actions against U.S. cotton support programs while the Agricultural Act of 2014 is in force or against any agricultural export credit guarantees under the GSM-102 program as long as the program is operated consistent with the agreed terms; and 4) the United States would make a one-time final payment of $300 million to the Brazil Cotton Institute (IBA).

            This partial annotated bibliography assists efforts to further examine the cotton dispute, the underlying global political economy, the WTO dispute settlement mechanism, and bilateral relations between Brazil and the United States. The bibliography was compiled by Mark S. Langevin, Ph.D., Director of the Brazil Initiative and Research Professor at the Elliott School of International Affairs-The George Washington University and International Advisor to the Associação Brasileira dos Produtores de Algodão (ABRAPA).

Review the entire annotated bibliography here.

Please send additions and corrections to Mark S. Langevin, Ph.D. at: langevin@gwu.edu.

Brazil’s Backstop: The Modernization of Brazilian Agriculture and its Contributions to National Development by Mark Langevin

Brazilian agriculture is a fundamental pillar of national economic development in the 21st century. Baer reminds that agriculture has been the “engine of economic growth” since the colonial era (2014:281) and Barros reports that “Agriculture was the foundation upon which Brazil’s economic system functioned up to the beginning of the twentieth century (2009:83).” Agriculture was exclipsed by manufacturing and services during the twentieth century, but the onset and deepening of Brazil’s import substitution industrialization (ISI) model and the rapid pace of urbanization required signficant income redistribution from agriculture and mining to finance mounting fiscal demands placed upon the state. Today, Brazilian economic and fiscal stability continues to be anchored to agriculture and agricultural commodity exports. Agriculture is Brazil’s backstop.[1] 

Read the entire Brazil Initiative Working Paper here.

[1] The term “backstop” is used in finance and refers to “the act of providing last-resort support or security in a securities offering for the unsubscribed portion of shares. A company will try and raise capital through an issuance and to guarantee the amount received through the issue, the company will get a back stop from an underwriter or major shareholder to buy any of the unsubscribed shares.” Investopedia. Accessed at: http://www.investopedia.com/terms/b/backstop.asp.