Brasília, April 27, 2004 (Agência Brasil) - After expressing "satisfaction" over the preliminary report on the impact of American agricultural subsidies on world trade, the Brazilian Ministry of Foreign Relations informed that 89.5% of agricultural production in the United States receives subsidies. According to the Ministry, this practice causes "severe harm to Brazil, due to the depression of international cotton prices and the illegitimate increase in American participátion in exports of the product."

Yesterday (26) the Ministry received the World Trade Organization's (WTO) preliminary report on the impact of American cotton subsidies on multilateral trade. The panel was in response to a Brazilian request in 2003. The Ministry said that, according to data from the United States Agriculture Department itself, American cotton growers received US$ 12.4 billion in subsidies between August, 1999, and July, 2003. "In this same period the total value of cotton production in the United States amounted to US$ 13.9 billion," says the note, underscoring that comparing the two figures results in a subsidy rate of 89.5%.

According to the argument presented by Brazil in the WTO, without the American subsidies during this period, American cotton production would have fallen 29%, American cotton exports would have dropped 41%, and international prices would have risen 12.6%. The three values are approximate.

Yesterday in a collective interview, the Ministry of Foreign Relations' general subsecretary for Economic Affairs, Ambassador Clodoaldo Hugueney, affirmed that he was "satisfied" with the preliminary conclusions of the report. "The Brazilian expectation is that this case will be an instrument of change for the regulation of world agricultural trade, which is currently undergoing a dramatic juncture," the Ambassador affirmed.

Translator: David Silberstein