Brazil Beefs Up Import Duties on U.S. Goods
In retaliation for U.S. cotton subsidies, Brazil announced it would boost import tariffs on hundreds of U.S. products that include cotton, cotton fabric, and men’s and women’s pants as well as food, sunglasses and cell phones.
The trade war between Brazil and the United States, both major cotton producers, erupted in 2002 and turned into a long, drawn-out case before the World Trade Organization, with Brazil objecting to the United States’ $3 billion a year in subsidies to cotton farmers. The subsidies help push down world cotton prices, hurting farmers in South America, Africa and other parts of the world.
On Aug. 31, a WTO panel declared that Brazil could impose trade sanctions on U.S. products to retaliate for the cotton subsidies. Those trade sanctions can reach as much as $829 million a year based on fiscal year 2008, but they could be higher if 2009 figures are used.
On March 8, Brazil delivered to the WTO a list of goods subject to revised tariffs, which will go into effect April 7.
Currently, Brazilian tariffs on all U.S. cotton range from 6 percent to 8 percent. They will be increased to 100 percent. Tariffs on woven-cotton fabrics will go from 26 percent to 100 percent. The tariffs on men’s and women’s pants will rise from 35 percent to 100 percent.
“The Brazilian government regrets having to take these measures since it believes that trade retaliation does not constitute the most appropriate means to attain international trade on a fairer basis,” the Brazilian government said in a statement. “However, after almost eight years of litigation and over four years of continuing noncompliance hellip; it remains for Brazil to exercise its right.”
The United States Trade Representative’s office said it is trying to resolve the situation. “We are disappointed to learn that Brazil’s authorities have decided to proceed with countermeasures against U.S. trade in the WTO cotton dispute,” said USTR spokesperson Nefeterius McPherson. “USTR is working to reach a solution to the issues in this dispute without Brazil resorting to countermeasures, and we continue to prefer a negotiated solution.”—Deborah Belgum
