Brazil Delays Decision on Tariffs for U.S. Products
Brazil said it plans to wait until February to draw up a list of U.S. goods that will face steeper tariffs in retaliation for U.S. cotton subsidies.
Originally, Brazil said it would have the list of more than 200 products and services readied by December. But it is waiting a few months longer to tally U.S. cotton subsidies in 2009.
The trade war between Brazil and the United States, both major cotton producers, erupted in 2002 and turned into a long, drawn-out case before the World Trade Organization, with Brazil objecting to the United States’ $3 billion a year in subsidies to cotton farmers. The subsidies help push down world cotton prices, hurting farmers in South America, Africa and other parts of the world.
On Aug. 31, a WTO panel declared that Brazil could impose trade sanctions on U.S. products to retaliate for the cotton subsidies. Those trade sanctions can reach as much as $829 million a year based on fiscal year 2008, but they could be higher if 2009 figures are used.
Products likely to fall under higher duties include textiles and apparel, rubber, optical instruments, plastics, food products, machinery, and equipment.
The United States is the largest cotton exporter in the world. Brazil is the fourth-largest.—Deborah Belgum
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