Brazil-US cotton agreement could suffer legal limbo
18/04/2012
Brazil has complained to the World Trade Organisation about subsidies it says the US government gives to cotton farmers there and has received permission to increase its tariffs on cotton imports from the US.
In 2010, the two countries reached an agreement that was enough to convince Brazil not to impose the higher tariffs. Instead, Brazilian cotton farmers were to receive support funding of almost $150 million a year from the US.
This support can only materialise if a new Farm Bill passes through the US Congress. With this being an election year there, there is speculation in Washington that the Farm Bill may have to wait until 2013. If that happens, Brazil may go ahead and apply the higher tariffs.
Brazilian media have quoted a senior diplomat in the country’s embassy in Washington, Diego Bonomo, who said it would be far better for all concerned if the Farm Bill vote could take place this year as planned. “US companies who do business in Brazil don’t want there to be a legal limbo surrounding the tariffs,” he added.
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