Brasília – The list of products and services should be used by Brazil as a form of retaliation to the illegal US subsidies granted to cotton farmers has been disclosed by the Foreign Trade Board (Camex).
The list of products has been published in the Federal Official Gazette and includes herring – a kind of fish -, peaches, beer and potatoes, as well as wheat and vehicles. Also included in the list are sugar-free chewing gum, eau de toilette, shampoo and toothpaste. The largest weight, however, should be on the import of wheat, whose tariff should be expanded form 10% to 30%, which, in thesis, may affect the lower-income population.
But the Foreign Trade secretary at the Ministry of Development, Industry and Foreign Trade, Lytha Spíndola, discards this possibility as Brazil currently has alternative markets for the purchase of wheat.
“This matter was studied together with the Ministry of Agriculture and the Brazilian import needs were considered. We have greater domestic production and suppliers like Argentina, Uruguay and Canada, among others,” she said.
The total volume of the retaliation is US$ 591 million. Another US$ 238 million should be turned to sectors with intellectual property and services, but the decision on how to adopt these measures should only be defined on March 23rd.
The retaliation may be put into practice in 30 days and the new import fees selected by the Camex should be valid for a year.
Last year, the World Trade Organisation (WTO) authorised the government of Brazil to retaliate the United States by up to US$ 829 million after a Brazilian appeal against subsidies that do not comply with the organisation’s rules, but granted by the United States to cotton farmers. In early February, the list had already been approved, but it needed technical adjustment.
The director of the Economy Department at the Itamaraty (the Brazilian Foreign Ministry), Carlos Márcio Cozendey, explained that the government has decided to include other sectors, as well as agriculture, to raise questions among North American industries that do not benefit from cotton, to press the Congress in that country.
“American industry is going to ask why it is suffering retaliation, losing market in Brazil, to support the cotton sector, which affects several developing countries and Africa,” he said.
The government of Brazil hopes that the US government will accept the measures. The 30-day period also grants some more time for dialogue, according to Cozendey. Therefore, he hopes that next year the establishment of a new list of goods and services for retaliation should not be necessary.
*Translated by Mark Ament