U.S. senators condemn cotton plan, threaten WTO deal

By Missy Ryan

WASHINGTON (Reuters) - A bipartisan group of U.S. senators urged the Bush administration to reject deep cuts to U.S. cotton subsidies in world trade talks, promising to oppose any agreement with major subsidy reforms that some poor countries insist they need to compete on world markets.

"We cannot abandon a group of farmers who have operated within the parameters of a program written to comply" with existing trade rules, Sen. Saxby Chambliss of Georgia and nine other southern lawmakers said on Thursday in a letter to U.S. Trade Representative Susan Schwab.

"Treating cotton differently than all other agriculture products in the Doha Negotiations will further erode support in the U.S. Congress for the WTO and the Administration's trade agenda," wrote Chambliss, the top Republican on the Senate Agriculture Committee, and his fellow senators.

They threatened to vote no to any agreement in the World Trade Organization's Doha round including a recent proposal to reduce U.S. cotton subsidies by more than 80 percent, going far beyond cuts for other crops.

That plan, put forward in a July draft paper by the chair of the WTO agriculture negotiations, reflects earlier demands from cotton-producing countries in Africa to end the subsidies they believe depress cotton prices the world over, making it impossible for their dirt-poor farmers to compete.

The Doha talks, launched in 2001 with an unprecedented mission to help poor countries, has set up a unique initiative on cotton, but countries differ on how far that special treatment should go.

The U.S. cotton industry, which produces 40 percent of the cotton on world markets, wields major political clout in Congress, but it has suffered setbacks since Brazil triumphed several years ago in a WTO case against its subsidies.

Some reforms were made, but the two countries are still battling over whether more needs to be done.