Brazil to seek to retaliate against U.S. over cotton

BRASILIA (Reuters) - Brazil is resuming action at the World Trade Organization (WTO) to take retaliatory trade measures against the United States over subsidies it pays its cotton farmers, the foreign minister said on Friday.

"We are sending a petition to Geneva (WTO headquarters) to request the resumption of the arbitration process which had been interrupted in relation to cotton," Celso Amorim told reporters.

The WTO cleared the way in June for Brazil to seek up to $4 billion in trade sanctions on U.S. imports but the Brazilian government had not pursued applying the sanctions in the hope of hammering out a deal through the DOHA round of trade talks, which have since collapsed.

Amorim said the country would also look more closely at possible action over U.S. tariffs on imports of the Latin American nation's sugar-cane derived ethanol biofuel.

"We also have to examine the ethanol question. A consensus is mounting that we should go down this road (a trade dispute) but we're still working with lawyers and checking the law," he said.

Brazil has already mounted a joint challenge together with Canada over the United States' agriculture subsidies.

(Reporting by Fernando Exman; writing by Peter Murphy; editing by Todd Eastham)