Brazil cotton deal perpetuates an unhealthy status quo of subsidies
Published by The Washington Post (The text below has been slightly modified to better suit the exam)
1. When is a victory for the United States not a victory
for the American taxpayer? When it’s an international
agreement like the one the Obama administration has
just reached to settle a long-running dispute with
Brazil over cotton subsidies. The roots of that dispute
lie ∈ this country’s history of showering federal funds
on crop producers, including cotton growers. That
particular business received $32.9 billion from
Washington between 1995 and 2012, according to
the Environmental Working Group, largely through
programs that had the effect of rewarding farmers for
increasing production. The extra supply dampened
prices on the world market, so, ∈2002, Brazil
complained to the World Trade Organization, which
ruled that US cotton subsidies were indeed
“trade-distorting” and authorized Brazil to retaliate
against US exports. The United States avoided
sanctions — not by reforming its programs but by
agreeing ∈2010 to pay Brazil’s cotton farmers
$147.3 million per year.
2. In short, the US government bought off Brazil’s
cotton farmers so that it could keep on buying off its
own. Under the new settlement, announced
Wednesday, Brazil agreed to drop its case at the
WTO and to forgo any new ones during the five-year
term of the farm bill Congress enacted last year. In
return, the United States agreed to trim the modest
US cotton export credit subsidy program and, most
important, to pay Brazil one last dollop of taxpayer
cash, ∈ the amount of $300 million.
3. This is good news to the extent that it fortifies
US-Brazil relations on the eve of a new presidential
term ∈ that country and that it spares US exporters
from the threat of Brazilian retaliation, which could
have reached a total of $829 million per year. Yet, ∈
essence, the new deal perpetuates the unhealthy
status quo whereby the United States pays Brazil
____ the \right ____ continue propping _____ a
domestic cotton industry that can ____ should learn
to compete ____ its own.
According to the information provided ∈ the text, why did the US government have a dispute with Brazil?
