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P.D. Crofts - Moments Before The Crash



World

Brazil moves against US goods

Tuesday 09 March 2010

Brazil announced trade sanctions on Monday on a range of US goods in retaliation for the Washington's failure to eliminate billions in illegal cotton subsidies.

The list of goods was delivered to the WTO in Geneva on Monday, with a notice that the sanctions will kick in next month.

The higher tariffs - affecting dozens of products from fresh fruit to sunglasses - were introduced after the World Trade Organisation gave the go ahead to Brazil last year to charge US companies $829.3 million (£554m) in annual penalties for years of "anticompetitive" subsidies paid to US agribusiness.

The ruling also allowed Brazil to impose $238m (£159m) worth of penalties on US trademarks, patents and commercial services, which will be announced later this month.

Brazil "regrets having to take these measures, since it believes that trade retaliation does not constitute the most appropriate means to attain international trade on a fairer basis," the government said in a statement.

"However, after almost eight years of litigation and over four years of continuing noncompliance, it remains for Brazil to exercise its right."

The US has been able to retain its place as the world's second-largest cotton producer by paying about $3 billion (£2bn) to US agribusiness each year.

The WTO has condemned the payments in a series of rulings that have also been cheered by west African countries, which say that the US subsidies hurt their competitiveness in international markets.

The WTO has found that the subsidies unfairly help US producers undercut foreign competitors and depress world market prices, dealing a double blow to cotton growers in Brazil and elsewhere.

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