March 10, 2010 / 5:16 PM / 10 years ago

Lula: Brazil urges US to respect WTO cotton ruling

* “Respect institutions” or face world disarray, says Lula

* Extra retaliation to target U.S. intellectual property

SAO PAULO, March 10 (Reuters) - The United States must comply with a World Trade Organization ruling on U.S. cotton subsidies to uphold international law and order, President Luiz Inacio Lula da Silva said on Wednesday.

Brazil detailed on Monday a list of 102 U.S. goods that will be subject to import tariffs within 30 days unless both countries can reach an agreement to settle a long-standing dispute over U.S. cotton aid considered illegal by the WTO.

“Brazil is not interested in confrontation. We’re interested in respect for the decisions of the WTO. Either we respect institutions or the world will fall into disarray,” Lula said during the inauguration of a power plant in near Sao Paulo.

The WTO gave Brazil the formal go-ahead last year to impose sanctions on U.S. imports after the body ruled the U.S. government spent too much subsidizing cotton farmers and on an export credit guarantee program.

“We’re all sovereign countries and want to be respected, let the WTO be respected as well,” Lula said.

U.S. Trade Representative Ron Kirk said on Tuesday that the United States still hoped to strike a deal with Brazil to avoid the sanctions. If it can’t, it will have to try to persuade Congress to change the U.S. cotton program to satisfy Brazil’s concerns, he said.

Brazil has indicated it could accept a U.S. proposal with a pledge to send a reform bill to Congress if Brazil were compensated for damages until the bill’s approval. Some Brazilian business leaders have proposed compensation through U.S. investments into cotton research, as well as more U.S. imports of Brazilian beef, orange juice and ethanol.

Brazil is expected to publish by March 23 a separate list worth an additional $238 million in annual cross-retaliation penalties. That list would focus on intellectual property rights and services, Brazilian officials have said.

The total retaliation would be worth $829 million.

Reporting by Roberto Samora; Writing by Raymond Colitt; Editing by Eric Walsh

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