Brazil Seeks Sanctions Against US after WTO Ruling on Cotton

June 4, 2008 6:28:27 AM PDT
Brazil will seek sanctions against the U.S. after winning a World Trade Organization ruling on cotton subsidies, a top Brazilian trade official said Tuesday. Roberto Azevedo, the Brazilian Foreign Ministry's trade chief, said Brazil will pursue sanctions against the U.S., but he did not indicate what amount his government would ask for.

"We're going to ask for the authorization to retaliate," said Azevedo, who believes the WTO would decide this month on the amount and what goods the sanctions would target.

"The only alternative (to the sanctions) is if the United States takes steps to fully comply with the WTO ruling, but this is an unlikely scenario," he said.

Amaryllis Romano, an agribusiness expert at the Tendencias Consulting Group in Sao Paulo, estimated that Brazil could impose about US$4 billion in sanctions against the U.S. But she said such penalties could be counterproductive because Brazil needs the U.S. products and services that could be hit.

On Monday the U.S. lost its final appeal in the billion-dollar trade dispute over subsidies to U.S. cotton growers.

Because of the ruling, Brazil has the right to ask the WTO to authorize retaliatory trade sanctions until Washington scraps the payments.

U.S. lawmakers last month overruled a veto by U.S. President George W. Bush and forced through a farm bill worth US$290 billion that will largely maintain the cotton payments for the next five years.

U.S. trade officials said following the ruling that they were disappointed with the outcome, and rejected Brazil's complaint that the payments distort the global cotton market. Sean Spicer, spokesman for the U.S. Trade Representative, said Tuesday that the office had no comment on the prospect of Brazilian retaliation.

Brazil and several West African cotton-producing countries have long claimed that their farmers suffer because of Washington's payments to U.S. cotton growers, which amount to some US$3 billion a year.

Any trade sanctions imposed by Brazil will likely target U.S. trademarks, patents and commercial services, the South American country has warned.


Associated Press writer Stan Lehman contributed to this article from Sao Paulo, Brazil.