Bridges Weekly Trade News Digest • Volume 13 • Number 32 • 23rd September 2009

US, Brazil Trade Envoys Talk Cotton, Doha

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The United States and Brazil are willing to negotiate a settlement to a long-running dispute over Washington’s cotton subsidies, but in the meantime Brazil is continuing to prepare a list of US exports to be sanctioned, the countries’ top trade officials said on Thursday.

US Trade Representative Ron Kirk was in Brazil on 16 and 17 September to meet with Brazilian Foreign Relations Minister Celso Amorim. In addition to the cotton ruling, the officials also discussed the WTO’s Doha Round of trade talks and the possibility of a bilateral trade deal. But the cotton case seemed to top the officials’ agenda.

In a ruling delivered on 31 August, the WTO gave Brazil authorisation to implement tariffs on US exports in retaliation against Washington’s cotton subsidies, which the global trade body has deemed illegal (see Bridges Weekly, 9 September 2009, http://ictsd.net/i/news/bridgesweekly/54716/).

Brazil has yet to announce the list of goods, services and intellectual properties that it intends to hit with the new duties. Kirk said in Sao Paulo last week that he hoped the country’s retaliation would be “deliberate and thoughtful,” AFP reported.

“We would usually prefer a negotiated settlement, but in the wake of the conclusion of this long process, the time is for reflection on our next move,” said Brazil’s Amorim, Dow Jones reported. “At the moment we’re studying what measures we might take in case the US resolves not to change its position on subsidies.”

The leaders found some common ground on the WTO’s Doha Round of trade talks, which have struggled to maintain political momentum amid the global economic slowdown (see related story, this issue).

“On multilateral issues, we’re both looking for a way to thread the needle to make an agreement on Doha become a reality,” Kirk said, according to Dow Jones. “If we enter into negotiations in good faith, there’s a possibility to get it done in 2010.”

The trade envoys also hinted that they were considering working toward a bilateral deal to boost their countries’ economic ties. Trade in goods and services between the US and Brazil - the two biggest economies in the Americas - totalled US$64 billion in 2007. The US is Brazil’s second-largest trading partner, after China.

ICTSD reporting; “Brazil, US study resolution to WTO cotton ruling impasse,” DOW JONES, 17 September 2009; “US official urges ‘thoughtful’ WTO reprisals by Brazil,” AFP, 17 September 2009; “US interested in promoting bilateral trade with Brazil, in spite of Mercosur,” MERCOPRESS, 18 September 2009.