Dow Jones writer Bill Tomson http://online.wsj.com/article/BT-CO-20071016-712402.html  reported yesterday that, "The Bush administration will most likely appeal a recent World Trade Organization decision that the U.S. has not done enough to comply with an earlier WTO ruling that the U.S. needs to scale back subsidies for cotton farmers, U.S. Department of Agriculture Under Secretary Mark Keenum said Tuesday.

"Keenum said he was 'hopeful' the U.S. could win the appeal, but at the same time said he would like to see Congress pass a new farm bill this year that contained less controversial forms of subsidy support.

"'You've got to look at the fact that we're going to have a new farm bill, we hope, in 2007,' Keenum said. 'That may give us something to work with (to) defend ourselves.'"

And Reuters news reported yesterday (via DTN, link requires subscription http://www.dtn.com/agriculture.cfm?sidenav=sn_ag_producer&content=ago_vartr ial&vars=WVE0002429%7C1001 ) that, "The United States will likely fight a new World Trade Organization ruling, the latest step in a landmark case against U.S. farm subsidies, that found U.S. reforms to cotton supports wanting, the Agriculture Department said on Tuesday.

"Agriculture Undersecretary Mark Keenum told reporters he believed the Bush administration would appeal the findings, released to Brazil and the United States on Monday in a final report from a WTO compliance panel.

"Keenum, who oversees crop subsidy and export programs, said he hoped the United States could prevail in the case, a watershed in international trade feuds, despite repeated rulings in Brazil's favor."

The article added that, "The comments from Keenum go a step beyond what U.S. trade officials, who say only they are 'studying the report closely,' have signaled about an appeal. An appeal could last into the middle of next year."

The Reuters article indicated that, "The United States, responding to a 2005 appeals ruling, has already eliminated its 'Step 2' subsidy, which encouraged exporters and domestic mills to use U.S. cotton, and has reformed some export credit support. Groups speaking for the 25,000 U.S. cotton farmers insist U.S. supports are fair.

"But Brazil wants to see deeper reform, pointing in particular to two price-triggered subsidies that are a mainstay of U.S. crop supports.

"Those are marketing loans http://www.ers.usda.gov/Briefing/FarmPolicy/2002malp.htm , which effectively assure a minimum price for grains, cotton and soybeans, and counter-cyclical payments http://www.ers.usda.gov/Briefing/FarmPolicy/CounterCyclicalPay.htm , made when returns from sales and subsidies are below targets set by Congress."

Interestingly, Bloomberg writer Jonathan Stearns http://www.bloomberg.com/apps/news?pid=20601086&sid=a5mZJM5fMVGg&refer=lati n_america  reported yesterday that, "Brazil may spare the U.S. any retaliation over cotton subsidies because of the political and economic costs, settling for a 'moral' victory in a World Trade Organization dispute, said Brazilian Agriculture Minister Reinhold Stephanes."

The article stated that, "The remarks highlight the challenge of enforcing international trade rules and upholding the WTO's credibility. A WTO panel first ruled in September 2004 that as much as $4 billion a year in U.S. aid to cotton growers violated trade rules by pushing world prices down because of excess production.

"After the 2004 ruling, the U.S. eliminated part of its export-credit guarantees and a program that paid exporters and U.S. mills to buy cotton grown in the country. Brazil argued that the U.S. failed to cut marketing loans and stipends to farmers when crop prices fall below a threshold level, which the Geneva-based WTO also said depresses world cotton prices.

"'I see this kind of conflict as the typical situation where you win, but you don't get any compensation,' Stephanes said. 'Victory has a moral effect only.'

"He said his remarks were a 'personal opinion about the complexity of the process of taking retaliation measures' and the ultimate decision would come from the Brazilian government and President Luiz Inacio Lula da Silva."

However, an article posted yesterday at AllAfrica.com http://allafrica.com/stories/200710161150.html  reported that, "Cotton industry officials in West Africa's largest cotton producing nation are celebrating a ruling by the World Trade Organization (WTO) that US government subsidies to cotton farmers there undermine free trade.

"'I am hopeful that the situation here will get better,' said Francois Traore, President of the African Cotton Producers Association. 'At least it tells the truth that there are distortions against Africa's development interests.'

"According to Traore, who is also president of Burkina Faso's National Union of Cotton Producers, the WTO and the international community are now obliged to force the US to respect the ruling.

"'Subsidies are preventing us from living,' Traore said. 'If nothing is done, we can now say that nobody wants us to develop.'"

The article added that, "Visiting Burkina Faso on 15 October, Brazil's President Luiz Inacio Lula Da Silva called on the WTO to keep backing Burkina Faso and Benin, Chad and Mali which together form Africa's 'C4' group which has lobbied for changes to US subsidies. 'We must work together to protect [our] farmers so that they can gain competitiveness on the international market', President Da Silva said."

In news regarding the Doha round of WTO trade negotiations, Bloomberg writer Kartik Goyal http://www.bloomberg.com/apps/news?pid=20601091&sid=aHQgP7Y3vRME&refer=india  reported yesterday that, "India's Prime Minister Manmohan Singh told U.S. President George W. Bush that the country's concerns over the Doha round of trade talks are confined to agriculture, indicating compromise on issues such as services.

"'India can by and large live with what is on the table and has concerns only on agriculture,' Singh told Bush in a telephone conversation last night. 'We will try to help in reaching a compromise.'"

The article noted that, "Singh's statement may set the tone for a meeting this week among the leaders of India, South Africa and Brazil, which the U.S. wants to lead to an agreement on industrial tariff cuts. The three nations and other African and Latin American countries have complained that the current negotiating framework would require them to make deeper cuts in their industrial tariffs than the U.S., the European Union and other developed nations."

The Bloomberg article stated that, "Singh will instruct Nath [India's Trade Minister Kamal Nath] to work on reaching a compromise, according to the release issued late yesterday by the Indian government after the conversation between the two leaders.

"'India remains committed to the successful conclusion of the Doha Round at an early date,' Singh told Bush.

"Singh, however, insisted the government would not compromise on its demands on farming. More than half of India's 1.1 billion population depend on agriculture for their living."

Meanwhile, an article posted yesterday at the Hindustan Times Online http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=7bcd92c8-1e2b-491 5-bbf0-058efa393881&MatchID1=4568&TeamID1=6&TeamID2=1&MatchType1=2&SeriesID1 =1145&PrimaryID=4568&Headline=Kamal+Nath+meets+Lamy+over+WTO+crisis reported that, "As [Kamal Nath] left [London] to meet [WTO Director General Pascal] Lamy after his speech, he told reporters that he was hoping the Geneva talks would not break down, but said that it was up to the US and the European Union to talk among themselves and rescue the [Doha] negotiations."   

With respect to Europe, Charlie Rose interviewed EU Trade Commissioner Peter Mandeslon last week, and in part, the interview mentioned the Doha talks. According to a transcript of the conversation http://trade.ec.europa.eu/doclib/docs/2007/october/tradoc_136429.pdf , this exchange took place: "CHARLIE ROSE:  Anything you want to add about the next Doha round that is so vitally important?  Have we missed a point here?

"PETER MANDELSON:  Three points.  One, it's worth $200-plus billion a year for world trade and jobs and jobs security if we get it right.  Secondly, we're in now the final, sort of final stage of these negotiations where I believe the United States has a key role -- not the only role, but a key role in giving leadership to those negotiations.

"Thirdly, if we get it wrong, we not only lose the opportunity of that boost to world trade and boost for jobs around the world, but we'll damage the international trading system, which will have consequences for decades to come in my view."