Members of the Federal Senate, the Upper House of the National Congress of Brazil, have sought strong measures against the protectionism of cotton producers, adopted by the US Government under its new Farm Act, according to the senators who participated in a joint public hearing on the issue at the Committees on Agriculture and Agrarian Reform and on External Relations and National Defense.

Members of the Federal Senate, the Upper House of the National Congress of Brazil, have sought strong measures against the protectionism of cotton #

 

The new Farm Act, with wider subsidies, assures revenues to the American cotton producer even if nothing is produced, the senators said, according to the information on Federal Senate website.

 

At the meeting, Senator Ricardo Ferraco said, “The new American farm act is, in a rather disguised way, trying to violate a competitive international trade.”

 

Senator Jayme Campos was of the view that Brazil needs to take a stronger position on the issue.

 

Senators Waldemir Moka and Walter Pinheiro said the National Congress needs to be more active in tackling commercial protectionism. They said the measures taken until now by Brazil are valid, and within the “spirit of negotiation”, but Brazil should take greater action against the new US Farm Act.

 

Explaining the issue, Senator Ana Amélia said that without subsidies the Brazilian cotton production is more competitive than the American. “The difference is that the Brazilian farmer, when planting, looks up towards the sky to see if St Peter will deliver rain. But the American producer looks towards the Treasury, to Washington, to the availability of resources that will assure their payment,” she said.

 

Gilson Ferrúcio Pinesso, chairman of the Brazilian Association of Cotton Producers, said that the losses during the next harvest will be even greater than those caused by the previous farm act. “It is estimated that we will have an annual loss of US$ 335 million. This implies a reduction in the Brazilian GDP, according to our calculations, of $1.8 billion, and an estimated loss of eight thousand new jobs,” stated Pinesso.

 

Enio Cordeiro, from the Ministry of External Relations, informed that the Government has started working on a negotiated solution at the WTO, aiming to prove that the amendments to the new act violate an agreement signed by the United States. If an agreement is not made by June, he said, Brazil will seek an arbitration mechanism through the WTO, in which it will have to prove the demand to specialists selected to analyze the case.

 

In case a negotiated solution is not found, Brazil has the option of adopting the mechanism of commercial retaliation against the United States, but André Alvin Rizzo, from the Ministry of Development, Industry and Foreign Trade was of the opinion that commercial blockades would have consequences for the Brazilian domestic market. “Retaliation is the last option, since it is drastic; it blocks trade when everybody wants an open, free trade. And it also weakens relations between the countries,” said Rizzo, who was optimistic that Brazil will be able to obtain a favorable response from the WTO to solve the issue.