WASHINGTON Jan 14 Brazilian cotton producers
visiting Washington were pessimistic that the U.S. Congress
would finish wrangling over farm policy in time to comply with
international rules on cotton subsidies and avoid trade
sanctions on U.S. exports to Brazil.
Brazil challenged U.S. cotton subsidies at the World Trade
Organization and won the right to impose $830 million in
retaliatory tariffs on U.S. goods ranging from cars to milk
powder. But sanctions were put on hold while Washington wrote a
new farm law that was expected to eliminate the long-standing
The farm bill is already more than a year overdue and
Brazilian cotton producers said after visits to Capitol Hill
this week they were not reassured that the legislation, which
could pass this month, would comply with WTO rules against
"In visits to Congress we have not yet seen sufficient
effort to make the new farm bill comply," Gilson Pinesso,
president of the Brazilian Cotton Growers Association
(ABRAPA), told reporters on Tuesday.
Although Brazil's growers want to resolve the dispute
amicably, sanctions were looming if the farm bill did not pass
soon or failed to meet WTO rules, a concern which has also been
raised by U.S. business groups.
"We are in the position where there are no options left but
retaliation," said Welber Oliveira Barral, former Brazilian
secretary of development, industry and trade, who was part of
Brazil's foreign trade commission (Camex) said in December
it would hold public consultations in January with a view to
finalizing retaliatory measures by Feb. 28.
In 2010, Brazil published a list of some 100 U.S. goods that
could be targeted, including a tariff increase on cars to 50
percent from 35 percent, a rise on non-hard wheat tariffs to 30
percent from 10 percent and a 48-percent levy on milk powder, up
from 28 percent. Cotton would be charged a 100 percent import
tariff, the highest on the list.
ABRAPA and the U.S. National Cotton Council have put forward
a joint proposal to resolve the standoff but ABRAPA
international advisor Mark Langevin said the proposals had to be
taken as a package, not mix and match.
In a letter in May 2013 to the U.S. Trade Representative and
the Department of Agriculture, the two groups called for a
formula-based loan program for upland cotton producers,
voluntary revenue insurance and more cooperation between U.S.
and Brazilian industry groups.