Brazilian senate to discuss measures on US cotton subsidy

29 Jan '14

2 min read

The Committees on Foreign Relations and National Defense, as well as on Agriculture and Agrarian Reform of the Brazilian Senate would be meeting in February 2014, in order to discuss retaliatory measures to be taken against the US on the cotton subsidy issue, after the commencement of the work of National Congress of Brazil during the same month.

The meeting is being convened at the request of Senator of the Brazilian state of Mato Grosso do Sul Waldemir Moka, who during a recent meeting at the Ministry of Development, Industry and Trade (MDIC) suggested that measures should be discussed for retaliating against the US on failure of payments to the Brazilian Cotton Institute (IBA), states a press release issued on the Mato Grosso do Sul Senator’s website.

Senator Moka states that Brazil should impose barriers against the US as a way of demonstrating dissatisfaction with the interruption of payments agreed by the US and Brazilian Government, on the US cotton subsidy issue.

Regardless of the consequences, Brazilian Government must express to the US not to breach the contract and its terms, he added.

In 2010, Brazil had challenged US cotton subsidies at the World Trade Organization (WTO) and won authorization to receive US$ 831 million per year, with US$ 591 million in products and about US$ 240 million in intellectual property.

Through a memorandum of understanding (MoU), the US Government agreed to make an annual payment of US$ 147.3 million, in monthly installments to the IBA, until the Farm Bill was passed, which would eliminate the long-standing subsidies that caused the dispute.

However, after a recent visit to the US, Brazilian cotton producers expressed disappointment on US Congress’ delay and lack of efforts undertaken for passing the Farm Bill in time to comply with the international standards on cotton subsidies in order to avoid trade sanctions on US exports to Brazil.

The last farm bill expired on September 30, 2013, and the US Government stopped paying its monthly installments to the IBA since September 2013.

Fibre2fashion News Desk-India

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