Agricultural News
Brazil to Impose Cotton Sanctions
Mon, 08 Mar 2010 17:32:42 CSTBrazil has moved to retaliate against the United States over U.S. cotton subsidies. But that South American Country says the U.S. can settle the trade dispute through negotiations. The U.S. has 30 days to do so or Brazilian wheat tariffs will be increased to 30 percent. The World Trade Organization gave Brazil the formal go-ahead last year to impose sanctions on U.S. imports after the body ruled the U.S. government spent too much subsidizing cotton farmers and on an export credit guarantee program.
A spokeswoman for the Office of the U.S. Trade Representative said - USTR has worked to reach a solution to the issues in this dispute without Brazil resorting to countermeasures and we continue to prefer a negotiated solution. U.S. Commerce Secretary Gary Locke is headed for Brazil and it is likely he will discuss the situation upon his arrival.
The National Cotton Council says Brazil’s proposed tariff will - impose unwarranted harm on Brazilian and American interests in times of economic hardship for all. U.S. cotton’s share of the retaliation is relatively small and fixed at 147-million dollars. The retaliation damages associated with the export credit guarantee program, which are determined annually using a formula developed by an arbitration Panel, were recently claimed by Brazil at more than 600-million. Costs of U.S. cotton price-related programs are down more than 80 percent from the previous five-year average.
Senate Ag Committee Chairman Blanche Lincoln and Ranking Member Saxby Chambliss expressed disappointment after Brazil announced it is moving forward on retaliation for injuries due to the U.S. cotton program. The retaliation list totals 102 products including both agricultural and industrial goods. Brazil is expected to follow up this action with an additional announcement of “cross retaliation” action against U.S. intellectual property later this month.
In a joint statement, Lincoln and Chambliss said - it is unfortunate Brazil is moving forward with retaliation without first engaging in meaningful discussions towards resolving the dispute. The U.S. government continues to express its willingness to have a substantive dialogue but we cannot negotiate with a partner that is unwilling to voice what it wants.
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