Brazil calls for power to impose counter-measures against US in cotton case

18 Jul '05

2 min read

During DSB meeting on 15 July 2005, Brazil urged authorization to impose countermeasures against the US in the cotton dispute corresponding to a value of approximately US$3 billion per year.

The US responded by pointing out that in its communication to the DSB dated 14 July 2005 the US had objected to the appropriateness and level of the countermeasures proposed by Brazil. Hence, the matter was referred to arbitration.

Both Brazil and the US also drew attention to their bilateral agreement concerning procedures under DSU Articles 21 and 22, and Article 4 of the Subsidies Agreement.

According to this procedural agreement, both parties would, “at the earliest possible moment”, request the arbitration to be suspended, while Brazil would retain the right to request a compliance review panel under DSU Article 21.5.

In its statement at the meeting, Brazil recalled that, on 21 March 2005, the DSB adopted the rulings, including the panel's recommendation that the US withdraw by 1 July 2005 the prohibited subsidies under the export credit guarantee programmes and under the STEP 2 programme.

Brazil said that on 30 June 2005 the US announced the adoption of measures concerning these programmes but no action was taken in relation to STEP 2 within the time-period specified by the DSB. Brazil stated that on 5 July 2005 it submitted its request for authorization to impose countermeasures.

On the same day, the US announced additionalmeasures to implement the rulings concerning prohibited subsidies, which it planned to submit to Congress for approval.

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