High Hopes for Deal between Brazil, United States

US-Brazil FlagsOne of the most-watched aspects of the ongoing debate over the still-undetermined U.S. Farm Bill is how – and if – new legislation would bring the U.S. cotton industry into compliance with the WTO ruling about cotton subsidies. In 2009, WTO agreed to allow Brazil to take $830 million in cross-retaliatory measures against the United States, but the two countries reached an agreement that has averted direct sanctions.

Not only is the status of sanctions undetermined because there is no new Farm Bill, but the United States hasn’t made any of the monthly installments of the $147 million it agreed to pay Brazil annually since September. The head of the WTO, Roberto Azevedo, has publicly stated that he expects the two countries to reach an agreement that would avert retaliatory steps from Brazil.

However, the South American country’s foreign trade council, Camex, will be holding public consultations in January to determine whether or not to apply sanctions – an announcement that met with approval from Brazil’s National Industry Confederation.

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