Geneva The World Trade Organization largely ruled against the United States in an interim decision that it has failed to scrap a series of what the trade body says is illegal subsidies paid out to American cotton growers, U.S. and Brazilian trade officials said Friday.
The interim ruling was handed out confidentially to the parties late Friday. A final verdict, expected in September, could open the door for billions of dollars worth of Brazilian trade sanctions against the United States.
WTO panels rarely change their findings between preliminary and final rulings, and the apparent result is a major victory for Brazil's cotton industry and West African countries that have claimed to have been harmed by the American payments.
The South American country said Washington's continued support for American cotton producers ensured artificially high production and export levels, hurting Brazilian and African producers.