"On March 3, 2005, a World Trade Organization (WTO) Dispute Appeals Panel ruled against the United States in a dispute settlement case (DS267) brought by Brazil against certain aspects of the U.S. cotton program.1 The United States was given a July 1, 2005, deadline to bring certain cotton programs into compliance with WTO rules. On July 5, 2005, U.S. Secretary of Agriculture Mike Johanns announced that the Administration was sending proposed statutory changes to Congress to comply with the WTO case including elimination of the Step 2 cotton program, removal of a 1% cap on fees charged under the GSM-102 export credit guarantee program, and termination of the GSM-103 export credit guarantee program. In light of USDA's proposed changes, and with the expectation that they will be fully implemented in an expeditious manner, Brazil has temporarily suspended its pursuit of WTO-sanctioned retaliatory trade measures against U.S. agricultural products. The U.S. National Cotton Council (NCC) has announced its opposition to the removal of the Step 2 cotton program. Modifications to or the elimination of the programs as suggested by USDA, ultimately will be decided by Congress. This report will be updated as events warrant."
CRS Report for Congress, RS22187
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