Brazil ponders action against US on cotton subsidy issue

16 Nov '13

2 min read

The Brazilian Government is still studying and discerning as to what action it would be taking against the US for the non-payment of compensation to Brazilian cotton producers who were affected by the agricultural subsidies of the country, said Daniel Godinho, Secretary of Foreign Trade of the Ministry of Development, Industry and Foreign Trade.

According to a statement issued by the Chamber of Deputies (lower house of the Brazilian National Congress), the Brazilian Secretary said this during a public hearing in the Committee on Foreign Relations and National Defense of the Chamber of Deputies.

Mr. Godinho said the working group created to propose retaliatory measures against the US is examining proposals which would be submitted soon.

The Brazilian Secretary said that it is understood and obvious that a negotiated solution is desired in this case, but it has to be noted that the Government cannot relinquish all legal instruments to see this problem solved.

As per the decision of the World Trade Organization (WTO), the US is supposed to make monthly payments to Brazilian Cotton Institute to offset losses suffered by Brazilian cotton farmers due to agricultural subsidies provided by the country.

In 2004, the WTO found that the US granted a number of benefits to its cotton farmers and the country should change its subsidy programs or face retaliatory measures from Brazil.

In 2010, the two nations had agreed upon monthly payments which continued until the end of 2012. A technical group of retaliation was formed by the Brazil’s Council of Ministers of Foreign Trade Chamber (CAMEX), to assess the measures to be taken against US by November 30, 2013.

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