U.S., Brazil Reach Deal to Avert Sanctions

April 5, 2010 07:00 PM
 

Roger Bernard, Farm Journal Policy & Washington Editor

Retaliation against a host of U.S. products will not kick in April 7 in the wake of an agreement announced between the U.S. and Brazil on a "path forward" to resolve the dispute over cotton subsidies.

While announcing the agreement, a statement from USDA and the U.S. Trade Representative indicates there are still additional negotiations to be held on this topic.

"I am pleased that our teams have been able to make substantial progress towards the goal of a negotiated settlement which would avoid the imposition of countermeasures against U.S. trade, including U.S. exports and intellectual property rights. We now have a clear path forward, one that is in the best interest of both the United States and Brazil,” said Ambassador Kirk. "As a result of our discussions with Brazil we have avoided imposition of higher tariffs against hundreds of millions of dollars in U.S. goods exports which were scheduled to go into effect this week. This demonstrates how our two countries, working together, can solve problems. I am hopeful that this will enable us to build upon our strong relationship with Brazil, to the benefit of both of our economies.”

On April 1, Deputy USTR Miriam Sapiro and USDA Undersecretary for Farm and Foreign Agricultural Services Jim Miller met with Ambassador Antonio Patriota, Secretary General of Brazil's Ministry of External Relations to discuss possible resolution of the dispute. As a result of that dialogue, the Government of Brazil agreed not to impose any countermeasures on U.S. trade on April 7. In exchange, the United States agreed to work with Brazil to establish a fund of approximately $147.3 million per year on a pro rata basis to provide technical assistance and capacity building. Under terms to be agreed by the United States and Brazil in the Memorandum of Understanding, the fund would continue until passage of the next Farm Bill or a mutually agreed solution to the Cotton dispute is reached, whichever is sooner. The fund would be subject to transparency and auditing requirements.

The United States also agreed to make some near term modifications to the operation of the GSM-102 Export Credit Guarantee Program, and to engage with the Government of Brazil in technical discussions regarding further operation of the program. The United States also agreed to publish a proposed rule by April 16, 2010, to recognize the State of Santa Catarina as free of foot-and-mouth disease, rinderpest, classical swine fever, African swine fever, and swine vesicular disease, based on World Organization for Animal Health Guidelines and to complete a risk evaluation that is currently underway and identify appropriate risk mitigation measures to determine whether fresh beef can be imported from Brazil while preventing the introduction of foot-and-mouth disease in the United States.

Following implementation of these initial steps, the United States and the Government of Brazil agreed to continue engagement on these issues, with a view to agreeing on a process by June that will allow us to reach a mutually agreed solution to the Cotton dispute.

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