U.S., Brazil Consider Settlement on Cotton Subsidy Issue

Reuters

Maria Carolina Marcello

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Brazil delayed slapping import duties on U.S. goods for two weeks on Monday after getting a proposal from Washington aimed at settling a long-standing dispute over U.S. cotton subsidies.

Diplomats, trade experts and business leaders are closely watching the case, one of a few in which the World Trade Organization has allowed the wronged party to retaliate against a sector not involved in the dispute. Brazil would become the first country to apply cross-retaliation under WTO rules.

Brazil will suspend retaliation measures against U.S. goods until April 22, Lytha Spindola, executive director of the government’s foreign trade chamber CAMEX, told reporters in the capital Brasilia.

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The retaliation would be suspended for another 60 days if Washington takes further steps requested by Brazil.

Those steps include changing the credit guarantee program for U.S. cotton exports and laying out a framework for an assistance fund worth $147 million a year for Brazil’s cotton industry.

Brazil also wants the United States to declare the state of Santa Catarina free of Aftosa fever, a move that could open up more markets for Brazilian meat exports.

“If they effectively take these measures, a new period of 60 days will take effect on April 22 for there to be a complete negotiation,” said Carlos Cozendey, the head of economic issues at Brazil’s Foreign Ministry.

(Writing by Raymond Colitt and Stuart Grudgings; Editing by Philip Barbara)

(Story found in original format here.)

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