Oxfam asserted that only a total elimination of Step 2 and export credit guarantees will begin to ameliorate the unfair advantage that American cotton has over cotton produced in developing countries. Losses for poor African cotton-producers in Benin, Burkina Faso, Chad and Mali could top $1 billion over the next eight years if the US delays full subsidy reform.
"A proposal for compliance that does not eliminate Step 2 and other export subsidies will only sustain programs that have already been proven to be trade-distorting, very costly to taxpayers, and have failed to make US farmers more competitive or more sustainable," wrote Offenheiser. "Complying with the WTO ruling will not only remove an unfair trade distortion, but it will help tens of millions of farmers in many of the poorest countries, many of whom are struggling to survive on less than a dollar a day."
Failure on the part of the US to implement the WTO decision would also damage prospects for a new global trade deal on agriculture in the Doha Round and beyond, according to Offenheiser.
"We expect other countries to abide by the rules and uphold a fair, transparent, and rule-based trading system a system that continues to benefit the US," wrote Offenheiser. "But our failure to comply would send the wrong signal to developing countries that rich nations don't have to follow the rules."
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