By  on March 9, 2010

Brazil on Monday released a list of U.S. goods, including raw cotton, woven textiles and some apparel, that could face steeply increased tariffs in the latest salvo in the long-running dispute between the two countries over cotton subsidies.

Brazil told the World Trade Organization in December that it was considering sanctions against the U.S. for failing to end two cotton subsidy programs. Brazil argued the programs have allowed the U.S. to maintain its spot as the world’s second-largest cotton supplier, behind China, and violate international trading rules. The WTO authorized Brazil to target U.S. goods in an arbitration panel ruling in September.

According to the list of sanctions, tariffs on U.S. raw cotton would increase to 100 percent from 6 percent. Woven fabric tariffs would rise to 100 percent from 26 percent. Tariffs for men’s and boys’ cotton pants and shorts and women’s and girls’ cotton pants and shorts would climb to 100 percent from 35 percent. Some jewelry and beauty care categories were also included in the list.

The tariffs go into effect in 30 days, unless the two governments can broker a fix for the problem.

“We are disappointed to learn that Brazil’s authorities have decided to proceed with countermeasures against U.S. trade in the WTO cotton dispute,” said a spokeswoman for the U.S. Trade Representative. “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.”

In all, retaliatory tariffs for more than 100 U.S.-produced goods were on the list, which also includes shampoo, soap, deodorant, fresh fruit, cars, carpets, curtains, refrigerators and other industrial products. The list of sanctioned goods is valued at $591 million, according to Brazil. The remainder of the retaliation that Brazil was authorized, $238 million, will be applied to U.S. patents, trademarks and services later this month.

“Brazil’s latest actions are imposing unwarranted harm on Brazilian and American interests in times of economic hardship for all,” the National Cotton Council said Monday. “Historically, dispute settlement is frequently made more difficult, not easier, by the application of retaliatory trade measures.”

Commerce Secretary Gary Locke is in Brazil this week for the U.S.-Brazil CEO Forum. Today, Locke is scheduled to meet with Brazilian officials, American companies and public and private sector executives.

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