WWD.com/business-news/government-trade/brazil-eyes-sanctions-for-u-s-cotton-2399985/
government-trade
government-trade

Brazil Eyes Sanctions for U.S. Cotton

Brazil may impose punitive sanctions in response to the U.S.’ failure to scrap cotton subsidy programs found in breach of global rules.

GENEVA — Brazil told a World Trade Organization forum Monday it could impose punitive sanctions of about $829.3 million because of the U.S.’ failure to scrap cotton subsidy programs found in breach of global rules.

This story first appeared in the December 22, 2009 issue of WWD.  Subscribe Today.

A preliminary list published in Brazil’s official daily in November cited more than 200 products that could be targeted for high tariffs, including cotton yarn, cotton fabrics, denim fabrics with more than 85 percent cotton, men’s and boys’ trousers, knitted or crocheted fabrics of cotton and woven fabrics of nylon. Other products on the provisional list include agricultural products, machinery and equipment; pharmaceuticals, and chemical products.

A senior Brazilian trade official told WWD no date has been set for when the final list will be determined, but the official noted it could be at the end of next month or in February. The official also said the industry comments on the products “have already been received and are being examined.”

Doug Goodie, director of international trade policy at the National Association of Manufacturers, said, “We’re concerned so many manufacturing products could be subject to retaliation.”

Goodie said NAM’s strongest concern is how Brazil will proceed on “cross-retaliation” — other than in goods — covering commercial services or intellectual property rights.

Brazil said Monday that, out of the $829.3 million, $561 million would be in earmarked goods and the rest would be in trademarks, patents and commercial services.

A spokeswoman for the U.S. Trade Representative said the U.S. took note of the Brazilian statement at a closed-door session without disputing the figures.

Brazil took its claims to the WTO, arguing the U.S. has been able to retain its place as the world’s second-largest cotton producer by paying out some $3 billion to American farmers each year. China is the largest exporter of cotton, while Brazil is fifth.