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Brazil Accuses US of Subsidizing 90% of Its Cotton and Gets Ready for Retaliation

Within the next 30 days Brazil is expected to request retaliatory rights at the World Trade Organization to be used against the United States because of a dispute over cotton subsidies.

The WTO has ruled in Brazil’s favor on the issue, based on arguments that American support programs for cotton growers, known as “Market Assistance Loan,” “Step 2,” and “Counter-Cyclical Payments,” distort international market prices causing grave damage to Brazilian cotton farmers.


The ruling came six months ago and as the programs remain in place Brazil, under WTO norms, can now implement some form of retaliation.


The Ministry of Agriculture points out that between 1999 and 2002, support program payments to American cotton growers totaled US$ 12.5 billion, while the total value of the US cotton crop during the same period was US$ 13.9 billion. In other words, almost 90% of the value of the cotton grown in the US at that time was in the form of government subsidies.


WTO Meeting


Government representatives from Brazil, the United States, India, and the European Union (EU) have been meeting since Thursday, September 22, in Paris. Their agenda is focussed on the negotiations for the Ministerial Meeting of the World Trade Organization (WTO).


The meeting, which is scheduled to occur in December of this year, concludes the Doha Round, the series of trade negotiations initiated in September, 2001. The meeting in Paris ended today.


Brazil was represented by the Minister of Foreign Relations, Celso Amorim, at this meeting of the countries known as the Group of Four (G4).


According to the press office of the Ministry, issues such as agricultural subsidies and tariff policies practiced by the countries in the bloc are on the docket.


Harvest Down


The latest estimates of Brazil’s grain production for 2005 are that there will be a reduction of six million tons (5.23%), compared to the 2004 harvest. Total production is now expected to reach just over 113 million tons, reports the government statistical bureau (Instituto Brasileiro de Geografia e Estatí­stica) (IBGE).


The IBGE says that the smaller harvest is due to “either too much rain or not enough rain in various farm production areas of the country this year.”


Singapore


A cooperation agreement intended to strengthen trade between Brazil and Singapore was signed today by Brazil’s Minister of Development, Industry and Foreign Trade, Luiz Fernando Furlan, the vice prime minister of Singapore, Jaykumar, and the Singapore minister of Industry and Commerce, Heng Chee How.


The agreement calls for establishing a permanent dialogue on experience in management, economics and commerce, as well as investments.


Agência Brasil

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