WTO expects Brazil-US agreement on cotton dispute

Criado em 20/12/13 13h15 e atualizado em 23/12/13 07h41
Por Mariana Branco Fonte:Agência Brasil

Brasília – Director-General of World Trade Organization (WTO) Roberto Azevêdo said on Thursday (Dec. 19) that he expects Brazil and the US to arrive at a compromise on the cotton feud.

The WTO was favorable to Brazil as regards the US cotton subsidies. Subsequently, an agreement was established whereby the US should pay $147 million to the Brazilian Cotton Institute, which, since September this year, the US have refused to do due to automatic budget cuts. On Wednesday (Dec. 18), Brazil decided to hold a public consultation on cross-retaliatory sanctions as of January 2.

“My expectation is that the parties keep negotiating, so that measures that may constrain or distort their bilateral trade can be avoided,” Azevêdo declared at a press conference held after his meeting with Robson Andrade, chairman of the National Confederation of Industry.

WTO’s director stated that the case of Brazil and the US is an exception: “90% of the disputes started at the WTO lead to the implementation of the solutions from the conflict resolution agency. Only 10% are like the cotton case, in which the parties have not reached a compromise.”

In a note released on Thursday, the confederation asserts that the public consultation “safeguards Brazil’s rights at the WTO and allows the Brazilian government and the industry to evaluate the impact made on the country by the retaliatory measures, and gives the US two more months to fulfill their obligations.”

The interested parties will be allowed to participate in the public consultation up to January 31. The definitive decision on possible retaliatory action is only expected to be announced late in February, after the assessments made by the workgroup from Brazil’s chamber of foreign trade Camex, connected with the Ministry of Development, Industry and Foreign Trade.

In the note, the National Confederation of Industry argued that, in spite of the White House’s reporting that the budget has been frozen by Congress, the source of the payment due to Brazil is not the public budget, but their Commodities Credit Corporation, the same one used by the US government to grant subsidies to their cotton producers. “It is the Confederation’s understanding that the US executive has the resources and the instruments needed to solve this problem,” the communication reads.

The Confederation argued for the passing in the US of the so-called “Farm Bill” as the ultimate solution to the feud, as it should support the WTO’s decision to abolish their cotton subsidies.

Edited by Carolina Pimentel / Nira Foster
Translated by Fabrício Ferreira