Cotton Subsidy Victory

This could be very big:

Brazil won a preliminary ruling at the World Trade Organization on Monday night that could force the United States to lower the subsidies it pays farmers to grow cotton and, eventually, most subsidized crops.

The decision supports Brazil's contention that the subsidies paid to American cotton farmers violate international trade rules. A final ruling against the United States could lead to stiff penalties if it fails to change its practices. In another recent case involving steel, President Bush chose to remove subsidies and therefore did not have to face the penalties.

[...]

As the first successful challenge of a wealthy nation's domestic agricultural subsidies, the Brazilian case could also force the United States, the countries of Europe and other well-to-do nations to act this summer and offer new compromises at global trade talks that have been blocked over this agriculture issue for more than a year.

The $300 billion in annual farm subsidies and supports paid by the world's wealthiest nations have been the bane of Third World farmers. The United Nations, the World Bank and charities like Oxfam have said their elimination or reduction would provide the single biggest possible benefit for the economies of poor countries with many subsistence farmers.

Brazilian officials said they brought the case against the United States out of frustration, saying that all attempts by poorer nations to negotiate a reduction of the subsidies had failed.

As the article notes, the Bush administration will probably appeal this ruling, if for no other reason but to delay the decision until after the election. I'm certain anyone would do the same thing under the circumstances. If the decision stands, this could have major implications for the European Union and the US as both have heavy farm subsidies. Also, as the article notes,

With the United States and Europe vowing to revive those stalled trade talks over the summer, the question of agricultural subsidies and supports, especially now for cotton, will be back on the agenda. A compromise reached in trade talks could be less painful than penalties from the cotton case.

This will certainly level the playing field.