Politics, Business & Culture in the Americas

Brazil Backs off U.S. Trade Retaliation

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Brazil’s government delayed the implementation of retaliatory tariffs on 102 U.S. goods until at least April 22, pending a revision of U.S. subsidies for cotton producers, the country’s foreign minister said Monday. The trade dispute started in 2002 when Brazil filed a complaint to the World Trade Organization claiming the subsidies gave U.S. producers an unfair advantage in world markets. 

U.S. Trade Representative Ron Kirk and Agriculture Secretary Tom Vilsack said the two countries had reached a preliminary agreement in a statement released on April 6, the day before the sanctions would have gone into effect. 

The WTO first ruled that the U.S. subsidies were discriminatory in 2005 and again in 2008, and approved Brazil’s retaliatory measures in March. Brazil planned to adopt $591 million in annual penalties against the U.S. and withhold payment on intellectual property rights in retaliation. 

Carlos Cosendey, head of the Foreign Ministry’s economic department, said Brazil would suspend the implementation of the sanctions for another 60 days on April 22 if the U.S. changed the credit guarantee program for U.S. cotton exports, eased requirements for meat imports and committed $147 million a year to an assistance fund for Brazil’s cotton industry. 

Tags: cotton subsidy, trade disputes, U.S.-Brazil trade, WTO
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