According to a press release issued April 6, the United States Trade Representative, Ron Kirk, and the country’s Agriculture secretary, Tom Vilsack, stated that the two countries “have agreed to attempt a negotiated agreement over the cotton dispute.”
The WTO ruled in favor of Brazil in the dispute regarding subsidies granted by the US to its cotton farmers, which, according to the Brazilian government, leads to distortions in international trade of the product. The Americans did not comply with the decision, therefore the organization authorized Brazil to impose countermeasures of up to US$ 829 million.
In early March, the Camex announced a list of United States products for which the import tariff would be increased starting April 7. In the face of a proposal submitted by the United States government, the Camex decided to postpone the imposition of countermeasures up until the 22nd so that negotiations may continue. Brazil has always claimed to prefer a negotiated solution.
“I am pleased that our teams have been able to make substantial progress towards the goal of a negotiated settlement which would avoid the imposition of countermeasures against US trade, including exports and intellectual property rights,” said Kirk, according to a release issued by his ministry.
Vilsack added, according to the release, that he intends to work together with the United States Congress and Brazil in order to devise a long-term, mutually-agreeable solution to the dispute over cotton, one that will “meet the needs of North American farmers, workers and consumers.”
According to a release issued by the Camex, the United States has proposed the establishment of a fund for financing projects to benefit cotton production in Brazil, valued at US$ 147.3 million per year; the negotiation of new guidelines for the United States government’s export credit guarantee program for cotton exports, which is one of the points disputed by Brazil at the WTO; and cooperation in animal sanitation, particularly beef and pork.
The United States does not import fresh meat from Brazil, under claims that the country has not eradicated foot-and-mouth disease. Sector representatives, though, claim that it is actually a trade barrier disguised as a sanitary one, given that the two countries are strong competitors in the meat industry.
The postponement of the countermeasures up until the 22nd may be extended for another 60 days, according to the release issued by the Camex and the Brazilian foreign ministry (Itamaraty), a period that should be used for attempting to reach a provisional agreement. There are, however, hopes of attaining a definitive one.
“In case negotiations are successful by April 21st, leading to concrete, credible and immediate steps, then we will be able to glimpse at the possibility of a wider understanding in the near future,” said the Brazilian foreign minister, Celso Amorim, according to the release issued by the Itamaraty.
In an interview to Agência Brasil, the Brazilian minister of Development, Industry and Foreign Trade, Miguel Jorge, claimed that “the United States have become convinced that there is a need to negotiate and seek a point of convergence.”
“We have always stated that we wanted to negotiate,” he declared, adding that postponing the imposition of countermeasures was an “optimal” decision. “Seeking an agreement is always the best way,” he said.