The US has appealed a World Trade Organisation (WTO) ruling last year that accused it of failing to comply with earlier recommendations to axe illegal subsidies paid to its cotton farmers.

Gretchen Hamel, a spokesperson for the US trade representative's office, said the US has decided to appeal because it had brought its cotton programs "into full compliance with the WTO's recommendations and rulings in the original cotton case."

If it loses the appeal, the US could face billions of dollars worth of retaliatory sanctions against US products.

The dispute, which dates back to 2002, was brought about by Brazil after it accused the US of paying out $12.5bn in subsidies and export credit guarantees to its farmers.

Moreover, Brazil alleged that the US kept its position as the world's second-biggest cotton producer because of the subsidies.

The US, however, maintains it has made the changes necessary and that it has been complying with all WTO rules - including eliminating the so-called Step 2 programme which meant US exporters and manufacturers would no longer receive an incentive for buying higher-priced cotton from US cotton growers.