USA:s bomullssubventioner - effekter på världsmarknaden och utvecklingsländer

The aim of this thesis is to discuss and analyse the American cotton subsidies’ effect on the world market in general and developing countries in particular. The amount of U.S. subsidies is substantial compared to most other countries, but a great deal of the effect is due to the USA’s significant share of the market. With the help of a partial equilibrium analysis, it can be shown that subsidies increase the quantity produced and therefore the export. Domestic exporters of the product benefit from this policy while it is unfavourable to foreign exporters and it also strains the government budget. In the short run, the world market price of cotton has decreased while the American export has increased. The effect has been that African and Brazilian producers’ income has gone down because they cannot sell at a price below the production cost. With a petition to WTO, Brazil has tried to correct this and WTO ruled in its’ favour. The consequence of this ruling is yet to come but hopefully it will affect the Doha development round of talks