"The so-called 'Brazil cotton case' is a long-running World Trade Organization (WTO) dispute settlement case (DS267) initiated by Brazil--a major cotton export competitor--in 2002 against specific provisions of the U.S. cotton program. In September 2004, a WTO dispute settlement panel found that certain U.S. agricultural support payments and guarantees--including (1) payments to cotton producers under the marketing loan and counter-cyclical programs, and (2) export credit guarantees under the GSM-102 program--were inconsistent with WTO commitments. In 2005, the United States made several changes to both its cotton and GSM-102 programs in an attempt to bring them into compliance with WTO recommendations. However, Brazil argued that the U.S. response was inadequate. A WTO compliance panel ruled in favor of Brazil's non-compliance charge against the United States in December 2007, and the ruling was upheld on appeal in June 2008. […] A further U.S. commitment, made under the April MOU, includes modification of the animal disease status of the Brazilian state of Santa Catarina to allow products such as pork and live swine exports into the United States. These U.S. commitments are intended to delay any trade retaliation until after the 2012 farm bill, when potential changes to U.S. domestic cotton subsidies will be evaluated."
CRS Report for Congress, RL32571