Brazil to punish US over trade

September 2, 2009

, BRASILIA, Sept 1 – Brazil is looking to leverage its right to punish the United States under a WTO ruling to bring about an end to US subsidies on cotton, Foreign Minister Celso Amorim said Tuesday.

"It\’s not that we want to retaliate, it\’s just that this authorization gives us negotiating tools that will, we hope, change distorting laws in that and other rich countries," he said at a meeting with his Indian and South African counterparts.

The World Trade Organization on Monday gave Brazil permission to impose big retaliatory trade sanctions on the United States because of subsidies to US cotton farmers that unfairly dampened international cotton prices, breaching international trade rules.

Brazil is allowed to target US goods, services and intellectual property imports to the tune of hundreds of millions of dollars a year — including 147.3 million dollars a year in suspended concessions, and around the same amount again in other sanctions until the US subsidies end.

Brazil\’s ambassador to the WTO, Roberto Azevedo, said the total level of permitted retaliatory action this year would amount to 800 million dollars.

His country — the biggest economy in Latin America — had sought an even bigger sum, 2.5 billion dollars, from the United States from the case, which was first brought before the WTO in 2002.

Amorim told reporters that Brazil "will shortly have a small list of retaliation points" that should prove "very stimulating for negotiations."

"The aim of the retaliation is not to penalize" the United States, just to change an unfair trade practice, he said.

"If the norm is met, there is no reason to retaliate. And if it is not met, there will be retaliation."

US cotton subsidies was one of several barriers to an agreement in the Doha round of world trade talks that collapsed last year, with the United States and India in particular at loggerheads over the issue.

The United States has said it was disappointed with the WTO ruling against it, although the US Trade Representative\’s office added it was pleased Brazil was awarded an amount "far below" what it had been seeking.

A spokeswoman for that office, Carol Guthrie, said on Monday: "We do not know when or if Brazil will move to obtain final authorization to suspend concessions or when or if Brazil would act on any such authorization."

The National Cotton Council of America, a US industry association, meanwhile, accused Brazil of making "unrealistic" claims in its argument to impose the retaliatory sanctions.

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