Brazil, US Reinvigorate Talks On Trade Retaliation

Brazil’s imposition of trade countermeasures against United States products and intellectual property rights, following a World Trade Organization (WTO) ruling, might be averted as the two countries are working toward a negotiated settlement.

Yesterday, United States Trade Representative (USTR) Ron Kirk and US Secretary of Agriculture Tom Vilsack announced that the US and Brazil had “agreed upon a path toward a negotiated settlement with Brazil over the cotton dispute,” according to a USTR press release.

A WTO dispute settlement panel authorised Brazil to suspend its obligations on US goods including IP rights after it found US cotton subsidies non-compliant with international trade rules. US industry, including the Biotechnology Industry Organization, applauded the step towards a negotiated solution.

The Brazilian Trade Ministry said in a 5 April press release [in Portuguese] that trade countermeasures against the US would be suspended at least until 22 April, according to an informal translation. Until then, the two governments will discuss a list of proposals that would benefit Brazilian cotton producers, such as the establishment of a fund financed by the US and totalling US$147.3 million per year. This amount corresponds to the calculation made by the WTO dispute settlement body. An extension of 60 days of the grace period could be negotiated, said the press release.