BRASILIA (Commodity Online) : Cotton subsidy related tensions between Brazil and the US reached a new milestone Monday as Brazil announced trade sanctions against a slew of American goods.

Brazil published a list of more than 100 U.S. goods that would come under new import tariffs in 30 days and remain in effect for one year, unless the two governments reached a last-minute accord.



Brazil said it regretted the sanctions after eight years of litigation failed to produce a compromise and said it would raise tariffs on $591 million worth of U.S. products ranging from cars to milk powder with cotton and cotton products being charged 100% import tariff, the highest on the list.

In 2008, the World Trade Organization (WTO) ruled that subsidies to U.S. cotton producers were discriminatory.

Last year, the trade body authorized Brazil to set $829.3 million in annual penalties against the United States for anti-competitive subsidies--one of the few occasions in which the WTO has allowed cross-retaliation, where the wronged party can retaliate against a sector not involved in the case.

Meanwhile, The Office of the U.S. Trade Representative (USTR) here, said it was "disappointed" by Brazil's decision and that Washington favored a negotiated settlement to the issue.

"USTR has worked to reach a solution to the issues, without Brazil resorting to countermeasures and we continue to prefer a negotiated solution," it added.

The United States, the world's second-largest cotton producer, has been able to maintain its position by handing out some $3 billion in subsidies to American farmers each year. China is the largest exporter of cotton while Brazil is in the fifth position.

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook