Wednesday, March 10, 2010
Cotton harvesting (photo: David Nance, USDA)
After eight years of complaints, Brazil is now threatening to impose stiff trade sanctions against the United States over U.S. subsidizing of cotton production. Brazil has appealed to the World Trade Organization (WTO), which first ruled that the American subsidies were a violation of international law and then approved Brazil’s list of pending tariffs on U.S. exports.
A total of more than 100 goods, valued at $591 million, could be subject to import tariffs within 30 days, unless the U.S. comes up with a satisfactory compromise. Cotton products would be charged with a 100% tariff, while other goods like cars would increase from 35% to 50% and milk powder would jump 20%. Brazil is also considering $238 million worth of limits on royalties and intellectual property rights.
The Office of the US Trade Representative expressed disappointment over Brazil’s decision and called for new negotiations to settle the matter before the sanctions kick in.
-Noel Brinkerhoff
Brazil Details US Cotton Retaliation, Wants Accord (by Raymond Colitt, Reuters)
U.S. Cotton Dispute – Publication of the List of Goods Subject to Increased Import Duties (Ministry of External Relations)
Brazilian Retaliation Against U.S. Trade Violations: A Signal for Reform (by Daniella Markheim and Scott Lincicome, Heritage Foundation)
The WTO Cotton Case and US Domestic Policy (by Darren Hudson, Choices Magazine)
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