The United States was ordered to withdraw some of its support for producers of cotton and other commodities, according to a World Trade Organization report made public Wednesday.
The WTO panel, which ruled on a complaint from Brazil, found that the United States provides cotton farmers with subsidies that are higher than permitted by WTO rules -- depressing world prices and harming growers in underdeveloped countries.
"We are pleased with the results, and we hope that they will be implemented by the United States," Brazilian Ambassador Luis Felipe de Seixas Correa said.
The United States called the decision "mixed" and said it would appeal parts of the ruling.
"U.S. farm programs were designed to be fully compliant with our WTO obligations. We will strongly defend the U.S. position and work to ensure a level playing field for U.S. producers," Agriculture Secretary Ann M. Veneman said.
The report was given to the U.S. and Brazilian governments in June, but the exact details had remained confidential.
Brazil alleged the United States has kept its place as the world's second-largest cotton grower and largest exporter because the U.S. government paid $12.5 billion in subsidies to American farmers between August 1999 and July 2003.
The United States has insisted that its payments to farmers are within permitted levels, claiming that many are not subsidies as defined by the WTO and should not be included in the calculations.
In its report, the three-person panel ruled that some U.S. loan guarantee programs for cotton and other items are export subsidies because they are provided at rates that do not cover the long-term cost of running the program.
It said that other payments to U.S. producers led to "significant price suppression" on the world market, causing "serious prejudice to the interests of Brazil."
The panel recommended that the United States remove the illegal subsidies "without delay."
The publication of the ruling came on the same day that the WTO sent governments confidential copies of a report on European Union support for its sugar industry.
Diplomats said that ruling sided with Brazil, Thailand and Australia, which had claimed that the E.U. exports more sugar than it had agreed to and that the sugar is unfairly subsidized, encouraging overproduction. Opposing countries say that hurts their producers.
"These rulings are a triumph for developing countries and a warning bell for rich countries who consistently flout the rules at the WTO and whose unfair systems are creating misery and poverty for millions," said Phil Bloomer, head of the trade campaign for development charity Oxfam International.