Monday, March 24, 2008

Fruit and Vegetable

From Congressional Research Service report to Congress on WTO status
includes the status of the fruit and vegetable limitation (which I blogged about here).
The claim that the United States has exceeded its total spending limits hinges
largely on a previous ruling from the U.S.-Brazil cotton case in which a WTO panel
found that U.S. payments made under the Production Flexibility Contract (PFC) and
Direct Payment (DP) programs do not qualify for the WTO’s green box exemption
category because of their prohibition on planting fruits, vegetables, and wild rice on
covered program acreage. However, the panel did not make the extension that PFC and DP payments should therefore be counted as amber box programs, but instead was mute on this point. In its WTO notifications, the United States has notified its PFC payments as fully decoupled and green box compliant.21 This is an important distinction because the green box contains only non-distorting program payments and is not subject to any limit. Canada and Brazil argue that, because of the previous panel ruling, PFC and DP payments do not conform with WTO green-box rules and should be included with U.S. amber box payments.
The report suggests the issue is moot--because projections for high commodity prices into the future will keep the U.S. from violating the WTO limits.

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