The World Trade Organization appeals court ruled on the issue of US cotton grower subsidies in June 2nd, and recommended that the WTO dispute settlement body (DSB) ask the United States to take measures to comply with the rules of international trade.

Reuters reported that the ruling of the appeals tribunal will open up a path for Brazil to seek WTO sanctions against imports from the United States.

Brazil has imposed an economic sanctions of over US $1 billion a year on imports of goods from the United States on the grounds that the United States illegally subsidized cotton farmers.

In 2002, Brazil filed an action against an arbitration agency of WTO, accusing the United States of providing market loans and counter cyclical compensation to cotton growers, resulting in a huge increase in cotton output and export volume in the United States, thereby lowering the international cotton price and causing losses to cotton farmers in other countries.

The arbitration body supported Brazil in its ruling last December.

The United States refused to accept the ruling and appealed to the court of appeal in February this year.

In a 184 page ruling in June 2nd, the court of appeal basically supported the ruling in December last year and asked the US government to take corresponding measures.

A spokesman for the US trade representative Susan Schwab said in a statement 2 days ago that the United States expressed "very disappointed" with the ruling of the court of appeal, saying that the United States had never paid subsidies related to cotton production. "Therefore, there is no basis for us to say that the US subsidies have any impact on cotton prices".

The Reuters said that the United States cotton farmers subsidy is one of the most controversial issues in the WTO Doha Round negotiations. Farmers in developing countries, especially in Africa, believe that the US government subsidies have lowered the price of international cotton and expelled them from the market.

In the Doha Round negotiations, African cotton growers suggested that the United States should reduce the subsidy to its cotton farmers by 82%.