UNITED STATES – DOMESTIC SUPPORT AND EXPORT CREDIT GUARANTEES FOR AGRICULTURAL PRODUCTS
Document: Request for Consultations by Brazil
Date: 17 July 2007
Document codes: WT/DS365/1; G/L/823; G/SCM/D76/1; G/AG/GEN/75
Complainant: Brazil
Respondent: U.S.
Third parties: Argentina, Australia, Chile, EU, India, Japan, Mexico, New Zealand, Nicaragua, South Africa, Taiwan, Thailand, Turkey, Uruguay
Dispute stage: Panel
Agreements cited: Art. 3.2  Agriculture

UNITED STATES – DOMESTIC SUPPORT AND EXPORT CREDIT GUARANTEES
FOR AGRICULTURAL PRODUCTS

Request for Consultations by Brazil

 The following communication, dated 11 July 2007, from the delegation of Brazil to the
delegation of the United States and to the Chairman of the Dispute Settlement Body, is circulated in
accordance with Article 4.4 of the DSU.

 My authorities have instructed me to request consultations with the Government of the
United States pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes ("DSU"), Article XXII of the General Agreement on Tariffs and Trade
1994 (GATT 1994), Articles 4 and 30 of the Agreement on Subsidies and Countervailing Measures
(SCM Agreement), and Article 19 of the Agreement on Agriculture.

2. This request comprises two parts.

I. The measures at issue in the first part of Brazil's Request for Consultations are as follows:

 (a) for the years
1 1999, 2000 and 2001 : all domestic support measures in favour of
agricultural producers, within the meaning of Article 6.1 of the Agreement on Agriculture
notified by the United States in the notifications of its domestic support 2 (the "Notifications")
as part of its Aggregate Measurements of Suppor t for those years, as well as the programs,
legislation, regulations and other instruments by which any support was provided, as set forth
in Title 7 of the US Code
3 and Title 7 of the US Code of Federal Regulations ,4 as well as the
additional non-notified programs and support provided thereunder:

• Production Flexibility Contract payments 5 for each of wheat, corn, grain sorghum,
barley, oats, upland cotton, and rice; Non-insured Crop Disaster Assistance

1 In this request, "year" has the meaning assigned to it in Article 1(i) of the Agreement on Agriculture.
2 G/AG/N/USA/43 of 5 February 2003 for year 1999 and G/AG/N/USA/51 of 17 March 2004 for years
2000 and 2001.
3 Including Chapters 21C, 26, 35, 35A, 36, 38, 50, 55 , 58, 63, 68, 76, 77, 79, 80, 82, 87, 89, 90, 91, 92,
97, 99, 100, 101, 105, 106, 107 and 108.
4 Including Chapters IV, VII, IX, X, XI, XIV, and XV.
5 Subtitle B, Title I, Federal Agriculture Improvement and Reform Act of 1996, Public Law 104-127.
WT/DS365/1, G/L/823,
G/SCM/D76/1, G/AG/GEN/75

payments;
6 Crop Disaster payments; 7 Emergency Feed 8 and other feed program
payments for each of beef and veal, dairy, hogs and pigs, sheep and lamb, and all
other livestock; Livestock Indemnity9 payments for each of beef and veal, dairy, hogs
and pigs, sheep and lamb, and all other livestock; Tree Assistance Program
payments10 for each of apples, apricots, peaches, pears, and all other trees, bushes and
vines; programs providing various forms of credit for US agricultural producers; 11
programs exempting US agricultural produ cers from payment of gasoline and diesel
fuel taxes;12 programs exempting US agricultural producers from tax based on overall
farm income13; subsidies related to the operation and maintenance of irrigation works
by the US Department of the Interior.14

• Any other non-notified domestic support m easure or subsidies, and any other
legislation, regulations and other instru ments by which that support or those
subsidies were provided or granted, that are not properly exempted from the US
reduction commitments made pursuant to the terms of Article 6 of the Agreement on
Agriculture.

 (b) for the years 2002, 2004 and 2005 , during which years the United States made no
notifications of the domestic support include d in its Total Aggregate Measurements of
Support:

6 Section 109, Agricultural Risk Protection Act of 2000 , Public Law 106-224; Federal Crop Insurance
Reform Act of 1994.
7 " Food Security Act of 1985, Disaster Assistance Acts of 1988 and 1989 and subsequently " [sic];
Fiscal Year 2000 Appropriations Act, Public Law 106-78, October 22, 1999.
8 Notification G/AG/N/USA/43 indicates no public law or other references for this program.
Notification G/AG/N/USA/51 lists several public law references but does not indicate which ones apply
specifically to this program.
9 Notification G/AG/N/USA/43 indicates no public law or other references for this program.
Notification G/AG/N/USA/51 lists several public law references but does not indicate which ones apply
specifically to this program.
10 Notification G/AG/N/USA/43 refers to descriptions in the "1988 and subsequent disaster assistance
acts". Notification G/AG/N/USA/51 seems to refer to the Disaster Assistance Act of 1988, Public Law 100-387,
and also to "Public Law 105-174, May 1, 1998", whose name appears to be "1998 Supplementary
Appropriations and Rescissions Act" and in which Title II identifies a "Tree assistance program".
11 The guaranteed loans program provides lenders (e.g ., banks, Farm Credit System institutions, credit
unions) with a guarantee of payment should the borrower default on the loan. The guarantee permits lenders to
offer loans to farmers who would not otherwise be eligible for credit. See "Expect More Program Assessment
of the Agriculture Credit Insurance Fund," available at
http://www.whitehouse.gov/omb/expectmore/detail/10001009.2003.html. Given the United States' failure to
notify these measures, Brazil is unable to identify the precise statutory or regulatory provisions at issue, but
anticipates that the United States will provide such information during consultations.
12 Diesel fuel and gasoline used on farms are ex empt from various excise and sales taxes. See e.g.,
Diesel Fuel Tax Exemption 26 U.S.C. §4041(f) and Gasoline Tax Exemption 27 U.S.C. §6420.
13 Including deductions from taxable incomes from farming, farmers' marketing and purchasing co-
operatives and export transactions of agricultural commodities.
14 The OECD defines these subsidies as a proportion (38.7 per cent) of the annual expenditure of the
Bureau of Reclamation (US Department of the Interior) estimated to apply to the construction, operation and
maintenance of irrigation works for agriculture. Details available in Section III.E.1 of OECD "United States:
Estimates of Support to Agriculture", available at http://www.oecd.org/dataoecd/11/24/37003207.htm. Given
the United States' failure to notify these measures, Brazil is unable to identify the precise statutory or regulatory
provisions at issue, but anticipates that the United States will provide such information during consultations.
WT/DS365/1, G/L/823,
 G/SCM/D76/1, G/AG/GEN/75

• all domestic support measures in favour of agricultural producers within the meaning
of Article 6.1 of the Agreement on Agriculture , and the programs, legislation,
regulations and instruments by which that support was provided, as set forth in Title 7
of the US Code
15 and Title 7 of the US Code of Federal Regulations ,16 including the
measures identified in the Annex I to this request; and

• Any other domestic support measure or s ubsidies, and any other legislation,
regulations and other instruments by whic h that support or those subsidies were
provided or granted, that are not properly exempted from the US reduction
commitments made pursuant to the terms of Article 6 of the Agreement on
Agriculture.

3. Pursuant to Article 3.2 of the Agreement on Agriculture , the United States committed that it
would limit its Total Aggregate Measurement of Support to the annual levels specified in section I of
Part IV of Schedule XX of the United States: fo r the year 1999 USD 19,899.264 million and for each
subsequent year USD 19,103.294 million. Despite these commitments, the United States' Current
Total Aggregate Measurement of Support appears to have exceeded its commitment levels in each of
the years 1999, 2000, 2001, 2002, 2004 and 2005 in violation of Article 3.2.

4. For the years 1999, 2000, and 2001, the Notifications of the United States purport to show
that its domestic support did not exceed its commitm ent levels. However, in its Notifications, the
United States failed to include in its Aggregate Measurements of Support certain non-exempt
domestic support measures that the United States provi ded, within the meaning of Article 6.1 of the
Agreement on Agriculture as described above. The United States also failed to properly notify certain
of the measures identified under (a) above which must be included in the United States' Total
Aggregate Measurement of Support. Among other as pects of the Notifications that understated the
Total Aggregate Measurement of Support, the United States:

• incorrectly claimed that its Production Flex ibility Contract payments conformed to
the criteria for Decoupled income support (paragraph 6 of Annex 2 of the Agreement
on Agriculture);

• incorrectly claimed that payments under its Non-insured Crop Disaster Assistance,
Crop Disaster Assistance, Emergency Feed, Livestock Indemnity, and Tree
Assistance programs conformed to the criteria for Payments for relief from natural
disasters (paragraph 8 of Annex 2 of the Agreement on Agriculture);

• incorrectly included its crop Market Loss Assistance payments
17 in its non-product-
specific Aggregate Measurement of Support instead of product-specific Aggregate
Measurements of Support (paragraph 1 of Annex 3 of the Agreement on Agriculture).

5. For each of the years 1999, 2000 and 2001, the domestic support that the United States
provided, and which constituted its Current Total Aggregate Measurement of Support, exceeded its
commitment levels, contrary to Article 3.2 of the Agreement on Agriculture.

15 Including Chapters 21C, 26, 35, 35A, 36, 38, 50, 55, 58, 63, 68, 76, 77, 79, 80, 82, 87, 89, 90, 91, 92,
97, 99, 100, 101, 105, 106, 107 and 108.
16 Including Chapters IV, VII, IX, X, XI, XIV, and XV.
17 Section 802, Subtitle A, Title VIII , Emergency and Disaster Assistance for Producers, Public Law
106-78; Agricultural Risk Protection Act of 2000, Public Law 106-224. The Notifications refer to crop Market
Loss Assistance payments as "Crop market loss assist ance payments", "market loss payments (MLP)", and
"market loss payments (MLA)".
WT/DS365/1, G/L/823,
G/SCM/D76/1, G/AG/GEN/75

6. Although the United States has not notified its domestic support since 2001, for each of the
years 2002, 2004 and 2005, available public informa tion indicates that the domestic support that the
United States provided and which constituted its Current Total Aggr egate Measurement of Support
also exceeded its commitment levels, contrary to Article 3.2 of the Agreement on Agriculture.

7. Given the US failure to notify any dom estic support programs after 2001, Brazil has
endeavored to identify as many domestic suppor t measures as possible for the purposes of this
consultation request in view of available public s ources. These are set forth in the Annex I to this
request and/or are referenced above. However, in view of the nature of the affirmative US obligation
under Article 3.2 of the Agreement on Agriculture not to exceed its commitment levels, coupled with
the US failure to notify its domestic support programs after 2001, it is sufficient (and, indeed, the
most that Brazil can be expected to do) for pur poses of this consultation request, for the years
subsequent to 2001, to describe the general unive rse of domestic support measures provided for in US
legislation, regulations and other instruments by which domestic support or subsidies were provided
or granted, and that are not properly exempted from the US reduction commitments made pursuant to
the terms of Article 6 of the Agreement on Agriculture.

II. The measures at issue in the second part of Brazil's Request for Consultations are as follows:

• Export credit guarantee programs under the Agricultural Trade Act of 1978 and other
measures such as the General Sales Ma nager 102 ("GSM 102") program and the
Supplier Credit Guarantee Program ("SCGP"), as well as other statutory and
regulatory instruments providing the guarantees, and guarantees provided under those
programs or other measures, in respect of agricultural products for which the United
States has made export subsidy reduction commit ments in Section II of Part IV of the
Schedule of the United States ("scheduled products"), and in respect of all other
agricultural products ("unscheduled products").

8. Through these measures, the United Stat es makes available export credit guarantees,
contingent on the export of US agricultural pro ducts, at premium rates and on other terms more
favourable than those which are otherw ise available in the market. These measures therefore
constitute export subsidies under the Agreement on Agriculture and the SCM Agreement. The United
States provides these export subsidies: (i) in ex cess of its export subsidy reduction commitments for
scheduled products; and, (ii) for unscheduled products. These measures therefore violate Articles 3.3,
8, 9.1 and 10.1 of the Agreement on Agriculture . Additionally, these measures are prohibited export
subsidies contrary to Article 3.1(a) and 3.2 of the SCM Agreement.

9. In respect of Part II of this request for consultations, Article 4.2 of the SCM Agreement
requires the inclusion of a statement of available ev idence with regard to the existence and nature of
the subsidies in question. The Annex II to this request contains Brazil's statement of available
evidence.

10. Brazil looks forward to receiving the United St ates' reply to this request and to selecting a
mutually acceptable date on which consultations may take place. Brazil also expects that the United
States will supply information duri ng the consultations regarding all of its domestic support measures
existing in 1999, 2000, 2001, 200 2, 2004, and 2005, as well as on the measures at issue in the second
part of this request for consultations.
WT/DS365/1, G/L/823,
 G/SCM/D76/1, G/AG/GEN/75

ANNEX I

List of Various US Domestic Support Measures

Measure type Policy authority
Availability of Recourse Loans for
High Moisture Feed Grains and Seed
Cotton
Section 1209, Subtitle B of the Farm Security and Rural Investment
Act of 2002 (Public Law 107-171)
Certificate Exchange Gains Section 812, Sub title B, Title VIII of the Agriculture, Rural
Development, Food and Drug Administration, and Related Agencies
Appropriations Act, 2000 (Public Law 106-78) & 7 CFR, Part 1401,
§ 1401.4
Commodity Loan Forfeit 7 CFR, Part 1405, § 1405 (Equivalent to authorities notified in
ST DS: 6 in G/AG/N/USA/51)
Commodity Loan Interest Subsidy 7 CFR, Part 1401, § 1401.4 (Equivalent to authorities notified in
ST DS:7 in G/AG/N/USA/51)
Cotton User Marketing Certificates Section 136(a), Title 1 of the Federal Agriculture Improvement and
Reform Act of 1996 (Public Law 104-127)
Cottonseed Payments Section 206, Title II of the Consolidated Appropriations Resolution,
2003 (Public Law 108-7)
Countercyclical Payments (for
covered commodities)
Subtitle A, Title I of the Farm Security and Rural Investment Act of
2002 (Public Law 107-171)
Countercyclical Payments (for
peanuts)
Subtitle C, Title I of the Farm Security and Rural Investment Act of
2002 (Public Law 107-171)
Crop and Revenue Insurance
Subsidized by the Federal Crop
Insurance Corporation
Title 7 U.S.C., Chapter 36, § 1516
Crop Disaster payments Title II, Consolidated Appropriations Resolution, 2003 (Public Law
108-7)
Dairy Indemnities Title 7 U.S.C., Chapter 17, § 450j & § 450k
Dairy Forward Pricing Pilot Program Title 7 U.S.C., Chapter 26, Subchapter III, § 627
Direct Payments (for covered
commodities)
Subtitle A, Title I of the Farm Security and Rural Investment Act of
2002 (Public Law 107-171), as amended
Direct Payments (for peanuts) Subtitle C, Title I of the Farm Security and Rural Investment Act of
2002 (Public Law 107-171), as amended
Emergency Loans for Seed Producers Section 10103, Subtitle B, Title X of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Energy Subsidies As identified by the OECD at
http://www.oecd.org/dataoecd/11/24/37003207.htm
 Diesel Fuel Tax Exemption 26 U.S.C. §4041(f)
 Gasoline Tax Exemption 26 U.S.C. §6420
Farm Ownership Loans Subtitle A, Title V of th e Farm Security and Rural Investment Act of
2002 (Public Law 107-171)
Farm Storage Facility Loan Program Commodity Credit Corporation Charter Act (62 Stat.1070; 15 U.S.C.
714), as amended
WT/DS365/1, G/L/823,
G/SCM/D76/1, G/AG/GEN/75

Measure type Policy authority
Feed Assistance
 Emergency Feed Assistance
Program
7 U.S.C. §1471 Emergency Livestock Feed Assistance Act of 1998
(reauthorized by the Farm Security and Rural Investment Act of 2002
(Sec. 10104))
 Forage Assistance Program 7 U.S.C. §1471 Emergency Livestock Feed Assistance Act of 1998
 Livestock Assistance Program Military Constructio n and Appropriations and Emergency Hurricane
Supplemental Appropriations Act of 2005
 Disaster Reserve Assistance
Program
Agricultural Act of 1970, as amended, 7 U.S.C. 1427a
 American Indian Livestock Feed
Program
Section 101, Division B, Military Construction and Appropriations
and Emergency Hurricane Supplemental Appropriations Act of 2005
(Public Law 108-324)
 Pasture Recovery Program and
Flood Compensation Program
Agriculture, Rural Development, Food and Drug Administration, and
Related Agencies Appropriations Act
Flexible Marketing Allotments for
Sugar
Section 1403, Subtitle D, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Grazing Payments Grazing Payments identified by the OECD at
http://www.oecd.org/dataoecd/11/24/37003207.htm
Hard White Wheat Incentive
Payments Program
Section 1616, Subtitle F, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Income Tax Concessions Tax Concessions identified by the OECD at
http://www.oecd.org/dataoecd/11/24/37003207.htm
Irrigation on Bureau of Reclamation
Projects in 17 Western States
Equivalent to Authorities Notified in Supporting Table DS:9 in

Livestock Pilot Program Section 132, Subtitle C of the Agricultural Risk Protection Act of
2000 (Public Law 106-224)
Loan Deficiency Payments (for loan
commodities)
Subtitle B, Title I of the Farm Security and Rural Investment Act of
2002 (Public Law 107-171)
Loan Deficiency Payments (for
peanuts)
Section 1307, Subtitle C, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Marketing Loan Repayment
provision
Section 1204, Subtitle B, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Market Loss Assistance payments Section 1617, Sub title F, Title I of the Farm security and Rural
Investment Act of 2002 (Public Law 107-171)
National Dairy Market Loss
Payments (Milk Income Loss
Contract, i.e., MILC)
Section 1502, Subtitle E, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
National Dairy Market Loss
Payments (the authorized extended
period of the MILC program, i.e.,
MILCX)
Section 1101, Subtitle A, Title 1 of the Deficit Reduction Act of 2005
(Public Law 109-171)
Net Federal Budget Outlays for
Grazing Livestock on Federal Land
Equivalent to authorities notified in Supporting Table DS:9 in

Noninsured Crop Disaster Assistance
Program
Section 109, Subtitle A, Title I of the Agricultural Risk Protection
Act of 2000 (Public Law 106-224)
WT/DS365/1, G/L/823,
 G/SCM/D76/1, G/AG/GEN/75

Measure type Policy authority
Nonrecourse Marketing Assistance
Loans (for loan commodities)
Subtitle B, Title I of the Farm Security and Rural Investment Act of
2002 (Public Law 107-171)
Nonrecourse Marketing Assistance
Loans (for peanuts)
Section 1307, Subtitle C, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Payments in lieu of Loan Deficiency
Payments for Grazed Acreage
Section 1206, Subtitle B, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Payment to Processor (Sugar) Section 1401, Subtitle D, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Price support/quota: Milk Price
Support Program
Section 1501, Subtitle E, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Price support/quota: Sugar program Section 1401, Sub title D, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Producer Retention of Erroneously
Paid Loan Deficiency Payments and
Marketing Loan Gains
Section 1618, Subtitle F, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Production Flexibility Contract
payments
Subtitle B, Title I of the Federal Agriculture Improvement and
Reform Act of 1996
Recourse loans available for seed
cotton
Section 1209(b), Subtitle B, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Sheep and Lamb Adjustment
Assistance Program
Clause 3 of Section 32 of the Agricultural Adjustment Act of August
24, 1935, (Public Law 74-320), as amended
(See also Lamb Meat Adjustment Assistance Program FSA Fact
Sheets, August 14, 2000 and April 2002)
Special Competitive Provisions for
Extra Long Staple Cotton
Section 1208, Subtitle B, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Special Marketing Loan Provisions
for Upland Cotton
Section 1207, Subtitle B, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
State Credit Programs Equivalent to authorities notified in Supporting Table DS:9 of

Storage Payments Equivalent to authorities notified in Supporting Table DS:7 in
G/AG/N/USA/51 under Cotton
Strengthening Markets, Income and
Supply
Agriculture, Rural Development, Food and Drug Administration, and
Related Agencies Appropriations Act, 2002 H.R. 2330 (Public
Law No: 107-76)
Sugar Storage Facility Loan Section 1402, Subtitle D, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Supplemental Loan (Sugar) Section 1401, Subtitle D, Title I of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171)
Support Under Assistance for
Livestock Producers(includes
Livestock Indemnity, Livestock
Compensation and Livestock
Assistance payments)
Section 10104, Subtitle B, Title X of the Farm Security and Rural
Investment Act of 2002 (Public Law 107-171), as amended & Section
203(d) of the Agricultural Assistance Act of 2003 (Public
Law 108-7), as amended
Tree Assistance Program Subtitle C, Title X of th e Farm Security and Rural Investment Act of
2002 (Public Law 107-171)
WT/DS365/1, G/L/823,
G/SCM/D76/1, G/AG/GEN/75

ANNEX II

Statement of Available Evidence

 Brazil's request for consultati ons dated 11 July 2007 identifies the subsidy measures that are
part of this request for consultations. The evid ence set out below is evidence presently available to
Brazil regarding the existence and nature of tho se subsidy measures. Brazil reserves the right to
supplement or alter this list in the future, as required.

 The evidence presently available to Brazil includ es, in addition to the relevant legislation,
regulations and statutory instruments, the following:

USDA Export Credit Guarantee Programs
http://www.fas.usda.gov/excredits/ecgp.asp

Eligible Commodities Under the GSM 102 and SCGP Programs
http://www.fas.usda.gov/excredits/gsmcommodities.html

GSM 102 Guarantee Fee Rate Schedule
http://www.fas.usda.gov/excredits/gsm102fees.html

Monthly Summary of Export Credit Guarantee Program Activity
http://www.fas.usda.gov/excredits/Monthly/ecg.html

Budget of the United States Government. Office of Management and Budget.
http://www.whitehouse.gov/omb/budget/fy2007/

Agricultural Export Credit Guarantee Programs Assessment
http://www.whitehouse.gov/omb/expectmore/detail.10002020.2005.html