In Brief: Brazil Moves on Cotton

Brazil seeks hefty punitive trade sanctions over U.S. failure to amend cotton policies.

• BRAZIL MOVES ON COTTON: Brazil has reactivated legal proceedings at the World Trade Organization seeking authorization to slap hefty punitive trade sanctions over the failure by the U.S. to fully amend cotton policies found in breach of subsidy rules. The request calls for the reestablishment of the WTO arbitration proceedings, suspended in 2005 to allow the U.S. sufficient time to dispute panel rulings that found American policies broke WTO subsidy norms. “Over the coming weeks, we will be vigorously defending our interests in this dispute,” said a spokesman for the U.S. Trade Representative. The three-member arbitration panel is expected to determine both the final punitive sanctions figure and how Brazil would retaliate. In the initial request, Brazil demanded punitive sanctions of $4 billion per year. But a senior Brazilian diplomat said the final amount would be smaller in view of programs the U.S. has scrapped.

This story first appeared in the September 2, 2008 issue of WWD.  Subscribe Today.