GENEVA — A World Trade Organization arbitration panel Monday authorized that Brazil could proceed and target U.S. goods and services for punitive sanctions approaching $295 million over America’s failure to scrap cotton subsidy programs found in breach of global rules.
The three-member panel in two separate determinations ruled that Brazil could proceed and request punitive annual countermeasures until Washington scrapped the offending measures.
Earlier, between 2005 and 2008, a series of WTO dispute panels and appellate body reports had found the U.S. in violation of global trade norms.
In the ruling over the adverse effects of the U.S. marketing loan and countercyclical payments, the arbitrators determined Brazil may request to suspend concessions “not to exceed $147.3 million annually.”
In the second ruling, over the U.S. export credit guarantee programs that broke global rules, the arbitrators determined Brazil may request authorization to suspend trade concessions up to $147.4 million for fiscal year 2006, and noted for subsequent years the amount would be determined by a detailed formula.
The total authorization amount granted, $294.7 million, however, was less than the $2.68 billion sought by Brazil during the proceedings.
Carol Guthrie, spokeswoman for the U.S. Trade Representative, said while the U.S. was “disappointed with the outcome of the dispute, we are pleased the arbitrators awarded Brazil far below the amount of countermeasures it asked for.”
Similarly, the chairman of the National Cotton Council, Jay Hardwick, in response to the WTO ruling, said, “We are pleased that the arbitration is far less than requested by Brazil.”
However, Brazil’s ambassador to the WTO, Roberto Azevedo, said the South American nation projects that for fiscal year 2009 (October 2008 to September 2009) the level of retaliation would be in the order of $800 million.
He said for the first $460 million, Brazil would apply countermeasures on goods, and the remaining $340 million on commercial services or intellectual property rights.
The arbitrators also determined that if the amount of permissible countermeasures exceeds a certain threshold ($409.7 million for 2007) of imports of consumer goods from the U.S., Brazil would be allowed to “cross retaliate” and suspend concessions in intellectual property such as patents, industrial designs, trademarks, or in commercial service sectors such as business and distribution services.
Azevedo, pressed on when Brazil would seek authorization from the WTO’s Dispute Settlement Body to retaliate, said, “We don’t know yet,” adding it would only decide after “an in-depth review.”
Asked how this would impact Brazil’s cotton sector, Azevedo said the best way to do it is “to get U.S. cotton subsidies out of the picture.”
Asian and African diplomats and trade specialists said the ruling was also likely to intensify the pressure on the U.S. to agree to deeper cuts on cotton subsidies in the troubled Doha trade talks.
“The [U.S.] cotton subsidies have been there since 1955 and many developing countries have suffered because of this,” said a trade diplomat from a cotton producing Asian nation who requested anonymity.
Meanwhile, West African cotton exporting nations are continuing to push the U.S. to make much deeper cuts in this sector.
“We want them to cut cotton subsidies to help African countries,” said a WTO ambassador from a cotton exporting African nation.
The envoy said African nations aired their concerns in talks with U.S. officials in Washington in July and with U.S. Trade Representative Ron Kirk in early August in Nairobi, Kenya.
The concerns of the African nations were also expected to be discussed in a meeting of trade ministers from a cross section of about 36 nations slated to meet in New Delhi Sept. 3 and 4 on how to advance the Doha talks.
The advocacy group Oxfam International, which campaigns for farmers in poor nations, lauded the WTO ruling in the Brazil case.
“Massive government subsidies for large-scale cotton growers in the United States are unfair and hurt farmers in poor countries. The WTO confirmed today the injury caused by these subsidies and authorized Brazil to retaliate against the U.S., ” said Gawain Kripke, policy director for Oxfam America. “American farm policy is broken and bloated, and now other sectors of the U.S. economy may suffer as Brazil retaliates.”
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews