Brazil Issues Preliminary List of U.S. Products That Could be Subject to Add'l Duties (Due to U.S.-Brazil Cotton Dispute)
On November 6, 2009, Brazil's Foreign Trade Chamber (CAMEX) issued its preliminary list of U.S. products that could be subject to additional duties of up to 100%, as the U.S. has not complied with World Trade Organization findings in the Brazil-initiated WTO dispute over U.S. subsidies provided to its producers, users and/or exporters of upland cotton.
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Comments on possible revisions to the list are due by November 30, 2009 and may be submitted to CAMEX by producers, importers, exporters, distributors, etc. on a form provided.
Final List to be Drawn from Preliminary List
Once comments are received and evaluated, and if there is still no action toward compliance by the U.S., CAMEX will select products from the preliminary list to be subject to additional duties of up to 100%.
(For example, CAMEX states that if a selected product had a 12% duty rate, and it decides to impose an additional duty of 100% on that product, the new duty rate would be 112%.)
CAMEX states that affected products would originate and come from the U.S., and that tariff numbers other than those on the preliminary list could be selected.
U.S. Products from 49 Chapters on Preliminary List
The U.S. products that are on the preliminary list are classified under 222 Brazilian 8-digit tariff numbers in Chapters 3, 4, 5, 8, 10, 11, 13, 15, 17, 20, 21, 22, 23, 25, 28, 29, 30, 33, 34, 37, 39, 40, 47, 48, 49, 52, 54, 56, 57, 58, 59, 60, 61, 62, 63, 70, 71, 72, 82, 84, 85, 87, 89, 90, 91, 94, 95, 96, and 97.
U.S. products under consideration include certain cars, freezers, stoves, radios, cotton yarn and fabric, cotton apparel, insulin, aspirin, lipstick, face creams, shampoos, toothpaste, and agricultural products such as certain oils, cherries, sardines, juice, potatoes, pears and prunes.
With respect to U.S. cotton yarn, fabric, and apparel, 32 cotton yarn and fabric eight-digit tariff numbers (Chapter 52) are preliminarily listed, as well as 12 cotton knit apparel 8-digit tariff numbers (Chapter 61), and 7 cotton woven apparel 8-digit tariff numbers (Chapter 62), among others.
WTO Report Authorized Brazil to Impose Millions in Countermeasures Each Year
In August 2009, a WTO Arbitration Report on this dispute authorized Brazil to impose countermeasures against U.S. goods on an annual basis, to vary from year to year. The fixed annual amount of countermeasures was set at $147.3 million. An additional amount of countermeasures that is variable would be added to the fixed amount each year.
The report also stated that Brazil may impose cross-sectoral countermeasures (e.g. against U.S. intellectual property and services) if the total amount of countermeasures for a particular year exceeds an annual threshold that is based on a subset of Brazil's imports from the U.S.
(On November 6, 2009, Brazil also submitted a request to the WTO for authorization to suspend the application of its WTO concessions and obligations to the U.S., in conformity with the Arbitration Report, and as preparation for this action.)
(See ITT's Online Archives or 09/01/09 news, 09090110, for BP summary of WTO authorization report, which determined that the U.S. GSM 102 export credit guarantee program was an export subsidy, etc.
See ITT's Online Archives or 06/13/08 news, 08061325, for BP summary of the WTO ruling against the U.S.)
Preliminary CAMEX list (published in Brazil's Diario Oficial on 11/09/09 in Portuguese) available at http://www.desenvolvimento.gov.br/arquivos/dwnl_1257771150.pdf
WTO notification on suspension of concessions (WT/DS267/41, dated 11/09/09) available at http://docsonline.wto.org/GEN_highLightParent.asp?qu=WT%2FDS267%2F41&doc=D%3A%2FDDFDOCUMENTS%2FT%2FWT%2FDS%2F267%2D41%2EDOC%2EHTM&curdoc=3&popTitle=WT%2FDS267%2F41