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American Shipper

Brazil succeeds in WTO cotton dispute with U.S.

Brazil succeeds in WTO cotton dispute with U.S.

   A WTO panel has ruled in favor of Brazil over the United States in a dispute over cotton subsidies to U.S. farmers.

   The ruling essentially paves the way for Brazil to impose countermeasures of up to $147 million per year, with the WTO saying the subsidies unfairly bring down international cotton prices.

   The WTO did not, however, grant Brazil the right to impose so-called cross-sectoral countermeasures, as Brazil was seeking the right to suspend concessions against U.S. intellectual property and services.

   'It is regrettable that the United States has not yet complied with the determination of the multilateral trading system after the U.S. subsidies have been condemned several times,” Brazil's ambassador to the WTO, Roberto Azevedo, told journalists, as reported Monday by the Agence France-Presse.

   “In our view this continued disregard of WTO rules by a key member of the WTO is a cause for concern” in the midst of negotiations to try to revive the Doha Round of trade liberalization talks, he said.

   “While we remain disappointed with the outcome of this dispute, we are pleased that the arbitrators awarded Brazil far below the amount of countermeasures it asked for,' said U.S. Trade Representative spokeswoman Carol Guthrie. 'In its first requests for countermeasures in the cotton dispute, Brazil asked for more than $4 billion in annual countermeasures. During the arbitration proceedings, Brazil argued for more than $2 billion annually.

   'Further, we are grateful that the arbitrators denied Brazil’s request for unlimited ability to suspend concessions on intellectual property or services. At this time, 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 administration will be actively consulting within the U.S. government and with stakeholders on how to move forward.”

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