WTO rules against US farm subsidies, opening door to Latin American retaliation

The Dispute Settlement Body of the World Trade Organization (WTO) issued a final ruling in favor of a complaint filed by a group of eight Latin American countries, finding that direct subsidies granted by the US government to its corn and cotton producers violate international trade rules and distort global prices.

The arbitration report concluded that US state financial assistance programs, which totaled more than $12.5 billion in the last cycle, depress international grain prices by 14%, causing direct losses of $2.1 billion for farmers in Latin America. The ruling authorizes the complaining countries to impose retaliatory tariffs on US manufactured goods.

Trade ministries across the region welcomed the landmark ruling and announced the creation of a technical working group to coordinate the proportional application of countervailing tariffs on imports from North America.

What does SurEconomics think?:

The WTO ruling exposes the hypocrisy of free trade as promoted by Washington: it preaches deregulation to the South while shielding its US agricultural corporations with state checks, in the best protectionist tradition.

Sources:

·       World Trade Organization (WTO): Dispute Settlement Dispute DS598: Subsidies on Agricultural Commodities

·       ECLAC: Impact of agricultural subsidies in developed economies on LatAm