Brazil to seek payback from US after WTO win over cotton

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BRASILIA, June 4 (AFP): Brazil confirmed yesterday it will use a victory against the United States over cotton subsidies in the World Trade Organisation (WTO) to demand pay-back in other areas.

"Brazil will make use of this power to demand compensation in the areas of goods and intellectual property," the head of the foreign ministry's economic department, Roberto Carvalho de Azevedo, told the news agency.

The WTO rejected Monday a US appeal against a December decision that found the United States had breached trade rules over its subsidies for cotton farmers, putting Brazilian producers at a serious disadvantage.

The ruling gives Brazil the right to demand sanctions, once it is examined by the WTO's dispute settlement body.

Carvalho de Azevedo said Brazil would avail itself of that option, and that the reprisal package would be worked out by the government's inter-ministerial exterior trade chamber.

"It has been decided that Brazil will go forward with this demand for compensation," he said.

The official added that "what comes out of this (WTO) decision is that all doubt has been eliminated for once and for all that the US subsidies damaged and distorted international trade."

In 2005, when Brazil lodged the case against the US at the WTO, it suggested it would seek sanctions worth one billion dollars if it won.

Brazil estimates that US subsidies for cotton producers were worth 12 billion dollars between 1999 and 2002, compared with the value of the cotton produced of 13.9 billion dollars during the period. This indicates a subsidy level of some 89.5 per cent.