Brazil's Final List of U.S. Products Subject to Add'l Duties Due to Cotton Dispute Expected in Jan. 2010
Brazil's Ministry of Development, Industry and Foreign Trade has announced that on December 15, 2009, Brazil's Foreign Trade Chamber (CAMEX) will meet to consider what U.S. products Brazil may subject to additional duties of up to 100%, as the U.S. has not complied with World Trade Organization findings in the upland cotton dispute.
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(In August 2009, the World Trade Organization (WTO) authorized Brazil to impose millions in countermeasures against the U.S. due to its failure to comply in the U.S.-Brazil cotton dispute, and on November 6, 2009, CAMEX issued a notice seeking comment on a preliminary list of U.S. products for possible retaliation. See ITT's Online Archives or 11/12/09 and 11/16/09 news, 09111205 and (09111620), for BP summaries.)
CAMEX to Finalize Product List, Prepared to Impose Add'l Duties in Early 2010
CAMEX received over 400 comments on its preliminary list of 222 U.S. products that could be subject to the additional duties.
While the preliminary list was valued at $2.7 billion dollars, CAMEX will consider a reduced list of products worth $450 million at its December 15th meeting, with finalization of the list expected at the beginning of 2010. CAMEX's Executive Secretary Spndola says Brazil will be prepared to impose the additional duties at that time.
Second Round of Retaliation Could be Imposed on U.S. IP and Services
In addition, Brazil states it is authorized to initiate a second round of retaliation on U.S. intellectual property and services, which based on 2006 data, would be valued at $450 million, bringing total retaliation to a value of $900 million.
However, according to CAMEX's Executive Secretary Spndola, the WTO authorized Brazil to base its calculations on data from other years and if it were to use preliminary 2008 data from the U.S., the second round of retaliation would be even more than $450 million. Spndola notes that this second round of retaliation still depends on approval by Braslia.
U.S. Says it Will Comply with WTO Ruling, Work with Brazil to Avoid Add'l Duties
In November 2009, U.S. Diplomat to the World Trade Organization Millan told the WTO dispute settlement body that the U.S. intends to comply in the U.S.-Brazil cotton dispute and therefore, Brazil would not need to levy its WTO-authorized sanctions.
The Office of the U.S. Trade Representative also announced that it is interested in working with Brazil to identify a solution without Brazil applying countermeasures.
(See ITT's Online Archives or 11/20/09 news, 09112005, for BP summary of these U.S. announcements.)
MDIC press release (in Portuguese, dated 12/08/09) available at http://www.mdic.gov.br/sitio/interna/noticia.php?area=1¬icia=9512