The US and Brazil reached an agreement Wednesday to end a decade-long cotton dispute between the two countries.
Brazil sued the US in the World Trade Organisation (WTO) on cotton subsidies in 2002. The WTO handed down a ruling in 2009 in Brazil’s favour, allowing Brazil to take retaliation measures on imports of US goods.
To avert Brazil’s countermeasures, which would affect approximately $800 million worth of US trade, the US agreed in 2010 to pay about $150 million a year to Brazil, Xinhua reported.
Under the terms of Wednesday’s agreement, the US will make a one-time final contribution of $300 million to Brazil, while Brazil will terminate the cotton case, giving up its rights to countermeasures against US trade or any further proceedings in this dispute.
Brazil has also agreed not to bring new WTO actions against US cotton support programmes while the current US Farm Bill is in force, or against agricultural export credit guarantees which are operated consistent with the agreed terms.
“Through this negotiated solution, the United States and Brazil can finally put this dispute behind us,” said Agriculture Secretary Thomas Vilsack.
US trade representative Michael Froman also spoke highly of the deal struck in the day.
“Today’s agreement brings to a close a matter which put hundreds of millions of dollars in US exports at risk,” said Froman. “The United States and Brazil look forward to building on this significant progress in our bilateral economic relationship.”
–IANS