🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

INTERVIEW-UPDATE 1-Brazil readies list of U.S. goods to sanction

Published 09/03/2009, 01:17 PM
Updated 09/03/2009, 01:21 PM

* Brazil sees list of US goods for sanctions in 10-15 days

* Brazil hopes to avoid retaliation over cotton

* Warning against changing Doha round aims

(Adds details, background, quotes, byline, Doha round)

By Jonathan Lynn

NEW DELHI, Sept 3 (Reuters) - Brazil is working on a list of U.S. goods it can retaliate against following the World Trade Organisation ruling in its case against U.S. cotton subsidies, Foreign Minister Celso Amorim said on Thursday.

"We'll be having meetings all along next week and hopefully in ten, 15 days we can have a list," he told Reuters in an interview on the sidelines of a meeting of trade ministers to advance the WTO's Doha round.

The WTO set out the terms last Monday under which Brazil can impose trade sanctions against the United States for two sets of cotton subsidies found illegal by the trade body but which Washington has not yet removed.

Sanctions on what set of subsidies are variable, depending on the amount of support the United States is providing, but Brazil says it could impose $800 million in the current year, a figure challenged by the United States which says the ruling allows retaliation nearer $300 million.

The arbitration ruling also said that in certain circumstances Brazil could "cross retaliate" targeting services such or intellectual property such as pharmaceuticals patents, rather than simply raising tariffs on other goods.

HITTING THE SPOT

Amorim said Brazil would examine carefully how to impose the maximum leverage with its sanctions.

He said he had been impressed by how the United States, when allowed to retaliate against the European Union in their dispute over bananas, had targeted pecorino cheese. Although this was of little significance in trade terms, it hit a particular group in Italy and would have had electoral consequences, he noted.

Amorim said Brazil had to be careful not to impose sanctions that also hurt itself, for instance by pushing up costs for industry.

"It has to be more detrimental to the other side so that the even more detrimental policy, which in this case is the cotton subsidies, can be removed," he said.

The object of retaliation was to change behaviour.

"We would hope that the United States would change the policies and we don't need to retaliate but this is only a hope," he said.

On Tuesday Amorim said Brazil wanted to negotiate with the United States before retaliating. [ID:nN01484135]

Amorim said he believed the Doha round could be completed next year if WTO members really wanted that.

He said he believed the new U.S. trade representative, Ron Kirk, genuinely wanted a deal.

But he warned the United States against trying to change the round from its mandated aim of helping developing countries into a quest for new business opportunities.

"If you want to change and transform the very essence of this round from a development round, a round that was centred on agriculture, to something that is how to extract more from emerging countries in manufactures... then it won't happen, that's all," he said.

Amorim recalled how Brazil and other developing countries, dependent on the International Monetary Fund during the previous set of trade negotiations in the early 1990s, had to acquiesce with the United States for fear of losing the next IMF payment.

"Now we lend money to the IMF, and so does China, and I don't know if India has already lent, but anyway it's also part of the recovery. These countries need us also in the G20 and they need our cooperation, it's not as it was in the past," he said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.