A dispute settlement panel from the World Trade Organization has ruled that the United States is violating the rules of international commerce with illegal antidumping measures against imports of orange juice from Brazil.
The decision, however, is still preliminary and may be appealed to a higher level at the WTO where a final decision will probably be issued in February 2011.
In September 2009, the Brazilian Foreign Ministry (Itamaraty) filed a complaint at the WTO regarding the formula used by the US to calculate an instance of dumping and its application to Brazilian orange juice imports.
According to Itamaraty, the methodology used the US “exaggerates dumping margins and is detrimental to Brazil.” The ministry, in a note, points out that the US has been condemned in other trade disputes for the same reason.
Brazil is now the world’s biggest orange juice exporter with sales totaling US$ 1.7 billion annually. Brazilian orange juice exports to the US are worth US$ 400 million, but the American consumer pays a price that includes not only import taxes but surtaxes that Brazilian producers claim are harmful to sales.
Although the WTO decision this week is only preliminary, it is the second recent Brazilian victory against US trade policies.
In December 2009, the WTO authorized Brazil to retaliate against US cotton subsidies in the amount of US$ 830 million annually. Since then Brazil and the US have been trying to negotiate a solution to the problem.