2014-12-29

Cato: Good News! U.S. Can Keep Sending $147m (per annum) to Brazilian Cotton Farmers after All

Phew. That was close.

Earlier this month, Secretary of Agriculture Tom Vilsack said that without a new farm bill to replace the 2008 farm bill, the USDA would not have the authority or the funds to continue paying the $147m per year bribe we had settled with Brazil in 2010 as part of a trade deal. (The fulsome details are available in this blog post, written at the time of the deal, and more about the underlying trade dispute is available in this 2005 policy analysis by Cato Adjunct Scholar Dan Sumner). And without those bribes, Brazil would likely suspend the ceasefire deal and retaliate against U.S. export interests by raising import taxes and suspending its obligations to protect Americans’ intellectual property. So, Mr. Vilsack implied, Congress needs to pass a farm bill now, and include changes to the cotton program that would satisfy the Brazilians and prevent a trade war.

Read more at http://www.cato.org/blog/good-news-us-can-send-147m-pa-brazilian-cotton-farmers-after-all

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