Brazil Seeks $2.5 Billion in Sanctions Against the U.S.

By Jim.Robinson|March 11, 2009

Brazil is asking the World Trade Organization to approve $2.5 billion (1.97 billion euros) in sanctions against the United States in a dispute over US cotton subsidies, the Brazilian ambassador said Monday. Roberto Azevedo said the request was lodged at a meeting of the WTO’s Dispute Settlement Body in Geneva.

“We have asked the WTO to ensure that Brazil is compensated $2.5 billion for the prejudice … suffered by our cotton producers between 1998 and 2000,” Azevedo, Brazil’s ambassador to the WTO, said after the meeting. “If the big countries are not sanctioned for violations of WTO rules, that would affect the credibility of the organisation,” he added.

Last June, a WTO panel upheld a Brazilian complaint that the United States had breached trade rules over its subsidies for cotton farmers. Brazil first brought the case to the trade bloc in 2002. It estimates that total US cotton subsidies were worth 12 billion dollars between 1999 and 2002. Compared with the value of cotton produced, which reached $13.9 billion during the period, it means that subsidies came to about 89.5 percent.

After the WTO ruled in its favor, Brazil said it could seek more than $1 billion in retaliatory sanctions. The subsidies paid by Washington to US cotton farmers have been criticized by non-governmental groups, who say they depress world cotton prices, thereby penalizing producers from poorer countries, particularly in Africa. The C4 group of West African cotton-producers — Benin, Burkina Faso, Chad and Mali — has since 2003 been fighting for the cotton issue to be included in the Doha Round of negotiations for a global free trade pact.