In October, the United States settled two long-running disputes at the World Trade Organization (WTO) – one with Brazil over cotton (DS267) and the other with Indonesia over clove cigarettes (DS406).
The dispute with Brazil began with WTO consultations in 2002 and an Appellate Body decision in 2005 finding U.S. subsidies to domestic cotton producers inconsistent with WTO obligations. Thereafter, the parties disputed the U.S. implementation of the rulings until a 2010 framework agreement designed to lead to a settlement. Finally, on October 16, the parties notified to the WTO a mutually agreed settlement, which included a one-time $300 million payment to Brazil to support technical assistance and capacity building. This settlement does not indicate that the U.S. support measures are now WTO-consistent, but it does come after the United States ended $147 million annual payments to Brazil while it reviewed implementation options.
As for Indonesia, the United States tobacco control measure that banned flavors in cigarettes, which prohibited imports of clove cigarettes from Indonesia but exempted domestically-produced menthol cigarettes, was declared a WTO-inconsistent technical barrier to trade by the Appellate Body in 2012. The mutually-agreed settlement with Indonesia, notified to the WTO on October 3, retains the ban on clove cigarettes (which reportedly is not a major concern to the Indonesian industry which has since refashioned clove cigarettes as exempted clove cigars to sell in the United States). This settlement requires that the United States will not unjustifiably discriminate against Indonesian clove cigarettes and will not pursue dispute settlement over an unrelated Indonesian mining rule that restricts exports of unprocessed ores. The settlement also ends the Article 22.6 arbitration over remedies filed by Indonesia (and likely renders moot the related dispute filed by the European Union over its exclusion from Third Party participation in that arbitration).
With these two longstanding disputes finally settled, another 10-plus-year dispute with Antigua and Barbuda over U.S. online gambling restrictions (DS285) remains to be settled, as most recently pointed out by the Prime Minister of the Caribbean island state at the September 2014 United Nations General Assembly meeting in New York.