Saturday, July 28, 2007

Cotton and Sovereignty: Brazil, the US, the WTO and Cotton Subsidies

The World Trade Organization is sometimes understood as largely a an intergovernmental organization. Its member states meet to try to arrange a global system within which private trade among their citizens can take place. This is true enough. But the WTO is increasingly building an autonomous institutional framework through which existing multilateral agreements might be implemented. That these institutions are quasi judicial in form makes them more powerful in the Western institutional mind.

In June of this year, the Doha round of multilateral trade talks collapsed amidst a bit of bitterness. Latest World Trade Talks Collapse, BBC News Online, June 21, 2007 ("Brazil and India blamed the latest failure on the EU and US not offering enough concessions on agriculture. The EU and US countered that Brazil and India were not opening up their markets to Western manufactured goods"). In the face of these setbacks, there was fear that the process of building a multilateral framework for trade--based on the management of impediments to trade imposed by some states--would be stymied.

But it seems that while the political and intergovernmental aspect of multilateralism has been slowed, its judicial aspects continue to "make facts." Thus it was that Brazil was able to take an additional step toward procuring agricultural concessions from the United States, at least in connection with American cotton subsidies. Brazil Claims WTO Cotton Victory, BBC News Online, July 27, 2007 (reporting that the WTO decision determined that "The changes made by the US were insufficient to bring the challenged measures - certain support payments under the 2002 Farm Bill and export credit guarantees - into conformity with US WTO obligations.").

And of course, this quasi judicial determination appears to move forward (in an unsystematic way to be sure) "discussion" on agricultural concessions in fact. Brazil had accused the U.S. "of unfairly helping its farmers, distorting the price of cotton and make it harder for developing nations to compete." Brazil Claims WTO Cotton Victory, supra. This was precisely the point in which intergovernmental talks had been stalled. "Subsidies, particularly those paid to the US cotton industry, have been at the heart of WTO trade talks that have been sputtering and stalling." Brazil Claims WTO Cotton Victory, supra.

The American reaction was telling: "US Agriculture Secretary Mike Johanns had a different view, adding that the US would work "very very hard" to protect the financial payments it made to cotton farmer." Brazil Claims WTO Cotton Victory, supra. A curious conundrum for American law and American business. On the one hand, the WTO system, a multilateral system fashioned after American desires to develop a global private economic system demands that states take a secondary role to that of private market actors. On the other, the majesty of American rule of law notions, as traditionally applied, make the attainment of global economic policy difficult at best. Treaties, after all, are no more compelling than federal statutes (to the extent of their conformity with American federal constitutional constraints). And they are subject to the will of Congress representing the political state. In a sense, the political theory of American rule of law constitutionalism works against American economic globalization goals. Unless of course, our goals are merely to secure the greatest possible concessions while retaining the greatest measure of advantage. While this may be a worthy political goal, it is at odds with the rule of law system inherent in the WTO itself--constituting itself as something that seems to be searching for a measure of autonomy from the intergovernmentalism from which it arose. And so .

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