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WTO confirms United States cotton subsidies illegal.

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Media release

4 March 2005 - MVT15/2005

WTO Confirms United States Cotton Subsidies Illegal Trade Minister Mark Vaile has welcomed confirmation by the World Trade Organization that United States cotton subsidies breach WTO rules.

Mr Vaile is currently in Kenya where he is attending a meeting of trade and economic ministers to progress the current Doha Round of world trade negotiations.

The WTO Appellate Body upheld earlier findings that some US cotton subsidies were prohibited while some others suppressed world cotton prices. The Appellate Body's report was released in Geneva overnight (3 March).

"The outcome provides a very positive result for cotton producers in Australia, in Brazil which initiated the challenge and in other developing countries," Mr Vaile said.

"Oxfam has estimated that the cost of US cotton subsidies to African producing countries alone is around US$300 million a year.

"The outcome reinforces efforts by the Australian-led Cairns Group and other like-minded coalitions to ensure that heavy users of agricultural subsidies live up to their existing WTO commitments. It also underscores the importance of Australia's efforts to pursue substantial reductions in domestic support and the elimination of export subsidies within the Doha round.

"Australia also hopes that, like the welcome result today, the final outcome of the WTO dispute concerning the EU's export subsidies for sugar initiated by Australia, Brazil and Thailand, will also provide further impetus for agricultural trade reform."

Contact: Mr Vaile's office 02 6277 7420 - DFAT Media Liaison 02 6261 1555