WORLD TRADE  
ORGANIZATION  WT/DS267/33 
19 February 2008 
 (08-0733) 
 Original:   English 
  
UNITED STATES – SUBSIDIES ON UPLAND COTTON 
 
Recourse to Article 21.5 of the DSU by Brazil
 
 
Notification of an Appeal by the United States  
under Article 16.4 and Article 17 of the Understanding on Rules  
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 20(1) of the Working Procedures for Appellate Review  
   The following notification, dated 12 February 2008, from the Delegation of the United States, 
is being circulated to Members. 
 
_______________ 
 
Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes  ("DSU") and Rule 20 of the Working Procedures for Appellate Review, the 
United States hereby notifies its decision to app eal to the Appellate Body certain issues of law 
covered in the report of the panel in United States – Subsidies on Upland Cotton: Recourse to 
Article 21.5 of the DSU by Brazil (WT/DS267/RW) ("Panel Report") and certain legal interpretations 
developed by the panel in this dispute.   
1. The United States seeks review by the Appella te Body of the panel's finding that Brazil's 
claims relating to GSM 102 export credit guarantees fo r exports of pig meat and poultry meat were 
within the scope of this proceeding under Article 21.5 of the DSU.
1  This finding is in error and is 
based on erroneous findings on issues of law and related legal interpretations. 
 2. The United States seeks review by the Appella te Body of the panel's finding that Brazil's 
claim that the United States failed to comply with its obligation unde r Article 7.8 of the  Agreement on 
Subsidies and Countervailing Measures ("SCM Agreement ") with respect to marketing loan payments 
and counter-cyclical payments made by the Unite d States after September 21, 2005 was properly 
before the panel.
2  This finding is in error and is based  on erroneous findings on issues of law and 
related legal interpretations. 
 
3. The United States seeks review by the Appellate Body of the panel's legal conclusion that as 
to GSM 102 export credit guarantees issued after July  1, 2005, the United States acted inconsistently 
with Article 10.1 of the Agreement on Agriculture by applying export subsidies in a manner which 
resulted in the circumvention of U.S. export su bsidy commitments with respect to unscheduled 
products and certain scheduled products, and as a resu lt acted inconsistently with Article 8 of the 
Agreement on Agriculture .3  The United States also seeks review by the Appellate Body of the panel's 
related legal conclusion that the United States acted in consistently with Articles 3.1(a) and 3.2 of the 
                                                      
1 See, e.g., Panel Report, paras. 9.20-9.27. 
2 See, e.g., Panel Report, paras. 9.75-9.81. 
3 See , e.g. , Panel Report, paras. 14.89, 14.97, 14.110, 14.115, 14.120, 14.128-14.129, 14.131, 
14.133(a)-(c), 14.134, 14.140, 14.149, 15.1(c). WT/DS267/33 
Page 2  
 
SCM Agreement  by providing export subsidies to unsche duled products and by providing export 
subsidies to scheduled products in excess of U.S. commitments under the Agreement on Agriculture .
4  
These conclusions are in error and are based on erro neous findings on issues of law and related legal 
interpretations.  
4. The United States requests the Appellate Body  to find that the panel failed to make "an 
objective assessment of the matter before it, including an objective assessment of the facts of the case 
and the applicability of and conformity with the relevant covered agreements" as required by 
Article 11 of the DSU with respect to Brazil's claims that the GSM 102 export credit guarantees 
constituted prohibited export subsidies.  The pa nel's failure to undertak e an objective assessment 
includes, for example, the following: 
  (a) The panel disregarded and misconstrue d the import of the GSM 102 export credit 
  guarantee budgetary re-estimates data submitted by the United States
5; 
 
 (b) When conducting its analysis under item (j) of the Illustrative List of Export 
Subsidies to the SCM Agreement , the panel relied upon assumptions not supported by 
evidence on the record6 and on inappropriate comparisons of fees.7 
 5. The United States seeks review by the Appellate  Body of the panel's legal conclusion that the 
United States failed to comply with the DSB's ruli ngs and recommendations relating to the original 
panel's findings of inconsistency with Articles 10.1 and 8 of the Agreement on Agriculture and 
Articles 3.1(a) and 3.2 of the SCM Agreement .
8  This erroneous conclusi on is based on the panel's 
erroneous legal conclusions a nd failure to undertake an objec tive assessment, described in 
paragraphs 3-4 above.  
6. The United States seeks review by the Appella te Body of the panel's finding that the United 
States acted inconsistently with its obliga tions under Articles 5(c) and 6.3(c) of the SCM Agreement  in 
that the effect of marketing loan and counter-c yclical payments provided to U.S. upland cotton 
producers after September 21, 2005 was signifi cant price suppression within the meaning of 
Article 6.3(c) of the SCM Agreement  in the world market for upland cotton constituting "present" 
serious prejudice to the interests of Brazil within the meaning of Article 5(c) of the SCM Agreement .
9  
This conclusion is in error and is based on err oneous findings on issues of  law and related legal 
interpretations.  7. The United States requests the Appellate Body  to find that the panel failed to make "an 
objective assessment of the matter before it, including an objective assessment of the facts of the case 
and the applicability of and conformity with the relevant covered agreements" as required by 
Article 11 of the DSU with respect to Brazil's claims  of present serious prejudice.  The panel's failure 
to undertake an objective assessment in cludes, for example, the following: 
  (a) The panel disregarded and misconstrue d evidence on the record concerning the 
structure, design, and operation of marketing loan and counter-cyclical payments
10; 
 
                                                      
4 See, e.g., Panel Report, paras. 14.156, 15.1(c). 
5 See, e.g., Panel Report, paras. 14.80-14.81. 
6 See, e.g., Panel Report, paras. 14.101, 14.125, 14.129. 
7 See, e.g., Panel Report, paras. 14.94-14.103, 14.124-14.128, 14.129-14.131. 
8 See, e.g., Panel Report, paras. 14.150, 14.157, 15.1(c), 15.2. 
9 See, e.g., Panel Report, paras. 10.50, 10.58, 10.104, 10.111, 10.196, 10.222, 10.231, 10.239, 10.243, 
10.247-10.256, 15.1(a). 
10 See, e.g., Panel Report, paras. 10.61-10.82, 10.92-10.95.   WT/DS267/33 
 Page 3 
 
 
 (b) The panel disregarded and misconstrued evidence on the record and its own finding 
that the U.S. share of world upland cotton production and exports was stable over MY 2002-2005
11; 
  (c) The panel misconstrued the results of  U.S. econometric modeling concerning the 
effect of U.S. marketing loan and counte r-cyclical payments on the world price for 
upland cotton
12; 
  (d) The panel disregarded and misconstrue d evidence concerning the alleged gap 
between the costs of production and the revenues of U.S. upland cotton farmers
13; 
 
 (e) The panel disregarded evidence relevant to ensuring that the effect of other factors on 
upland cotton prices was not improperly a ttributed to U.S. marketing loan and 
counter-cyclical payments.14 
 
8. The United States seeks review by the Appellate  Body of the panel's legal conclusion that the 
United States failed to comply with the DSB's ru lings and recommendations related to the original 
panel's findings of inconsistency with Articles 5 and 6 of the SCM Agreement .15  This erroneous 
conclusion is based on the panel's erroneous legal conclusions and fa ilure to undertake an objective 
assessment, described in paragraphs 6-7 above.  
__________ 
 
                                                     
 
11 See, e.g., Panel Report, paras. 10.127, 10.251. 
12 See, e.g., Panel Report, paras. 10.221-10.222, 10.251. 
13 See, e.g., Panel Report, paras. 10.176, 10.184, 10.195-10.196. 
14 See, e.g., Panel Report, para. 10.243. 
15 See, e.g., Panel Report, paras. 10.257, 15.1(a), 15.2-15.3.