US–Brazil Cotton Dispute and the World Cotton Market

20 Pages Posted: 16 Aug 2014

See all articles by William Ridley

William Ridley

University of Colorado at Boulder - Department of Economics

Stephen Devadoss

University of Idaho - Department of Agricultural Economics

Date Written: August 2014

Abstract

US policies for its cotton producers depress world cotton prices, adversely affecting exporters such as Brazil, which filed a complaint to the WTO. Despite WTO rulings in Brazil's favour, meting out the right to enact retaliatory countermeasures, the United States continues to subsidise its cotton farmers. After prolonged negotiations, Brazil and the United States reached an agreement which allowed the United States to pay Brazil to refrain from enforcing the countermeasures. To capture the adverse effects of US policies, theoretical analyses are conducted. The theoretical model is extended by constructing an empirical model of the world cotton market. The adverse effects of US policies on Brazil are estimated and compared to the compensation the United States pays Brazil.

Suggested Citation

Ridley, William and Devadoss, Stephen, US–Brazil Cotton Dispute and the World Cotton Market (August 2014). The World Economy, Vol. 37, Issue 8, pp. 1081-1100, 2014, Available at SSRN: https://ssrn.com/abstract=2481381 or http://dx.doi.org/10.1111/twec.12146

William Ridley (Contact Author)

University of Colorado at Boulder - Department of Economics

Campus Box 256
Boulder, CO 80309
United States

Stephen Devadoss

University of Idaho - Department of Agricultural Economics ( email )

Box 442334
Moscow, ID 83844-2334
United States
208-885-6806 (Phone)
208-885-5759 (Fax)

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