Brazil might retaliate if US cotton payments end
09/08/2013
The payments could be suspended under automatic spending cuts that would take effect if the Obama administration and Congress fail to agree on the size of the US deficit for the fiscal year starting on October 1.
Brazil won a challenge against US cotton subsidies at the World Trade Organisation in 2004 whereby Brazil said it would not impose $830 million in sanctions against US products if the US paid into an assistance fund for Brazilian cotton farmers. According to Reuters, the US agreed to pay Brazil $147 million a year – which it has done so since 2010 – while it wrote a new farm law that would eliminate cotton subsidies, but Congress is behind schedule.
"We are going to study our options and one option that cannot be excluded is cross-retaliation," Mr Patriota told reporters in Rio de Janeiro. "We are facing an interesting situation that will require a decision by Brazil."
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