Helena Cobban

An appeals panel of the World Trade Organisation (WTO) ruled last week that most of the $4 billion-plus that the US gives annually to producers and exporters of US cotton is illegal under current trade rules. The panel also stated that these payments — of which $3.2 billion are producer subsidies, while the rest help underwrite costs of exporting — must end by July 1.

This may be tough news for the 7,500 US cotton farmers (out of a total of 20,000) who have been getting these price supports from Washington. But it’s great news for millions of cotton farmers in poor parts of the world who have been unable to compete in world markets against America’s heavily subsidised cotton fibres.

Issues of lost or threatened family livelihoods are front and centre for most citizens of that very low-income country. Many complain about the tough International Monetary Fund requirements that had forced Mozambique to end its earlier subsidies for basic commodities.

Many other African countries have felt the pinch of United States cotton dumping, too. In many of those countries, a loss of family livelihoods that’s directly linked to Washington’s cotton subsidies has exacerbated and prolonged the conflicts. In all of them, it has kept the levels of poverty and human want quite unacceptably high.

What is the US required to do, and what will be the effects on US cotton farmers? The WTO ruled that if the US subsidies were not ended by July 1, then Brazil (which brought the case at the WTO) would have the right to impose trade sanctions against the US. But US lawmakers and the Bush administration should end these damaging subsidies for their own reasons, anyway. Quite simply, it’s the right thing to do. Perhaps some of the money saved could be used to help the less well-off recipients of the subsidies to convert their farms to crops that are competitive, without any further need for subsidies.

The rest of the money saved should surely go into a “repair” fund to help rebuild the cotton farms and communities in poor countries that were economically pole-axed by those years of unfair US subsidies. In 2004, US aid to all 540 million residents of sub-Saharan Africa came to less than $3.3 billion. That aid figure should rise, anyway. Back in 1990, the world’s rich nations pledged to boost the aid they give to developing countries to 0.7 per cent of national income. But today, the US gives less than 0.15 per cent. Moreover, a large part of the governmental aid goes to just two recipients: Israel and Egypt. Just 15 per cent of US aid goes to people in very low-income countries.

Those low aid figures express a lot about what we think America’s role in the world should be. In addition, everyone around the world hears about the massive amounts government has spent on the war in Iraq, and wonders why US priorities have gone so askew. For many years now, the main wisdom of development economists has stressed that “trade, not aid” is the best way for countries to climb out of poverty. The March 3 ruling was a victory for the world’s low-income countries. It showed they might have some hope of getting a fair deal, one day, out of the world trade system. Now, the United States, Congress, and all Americans should follow through by responding quickly and generously to the ruling. They should look, too, at the government subsidies to other economic sectors that may be equally damaging to low-income WTO partners — and reform those subsidies, too, with or without a further WTO ruling. — The Christian Science Monitor