Brazil delayed slapping import duties on US goods on Monday for two weeks after receiving a proposal from Washington aimed at settling a long-standing dispute over US cotton subsidies.
But a senior government official who spoke on condition of anonymity, said yesterday that both sides still needed to detail a preliminary agreement by April 21 to avoid retaliation and launch a two-month process of negotiations.
“We’re still trying to establish mutual confidence,” the official said.
Brazil would also reserve the right to apply retaliatory measures if the United States did not comply with its proposed plan, the official said.
Brazil was set to impose tariffs and lift intellectual property right protections on $829 million of US goods, which would have been its right after a 2009 World Trade Organization ruling against US cotton subsidies.
But it agreed to hold off after Washington pledged to make some short-term tweaks to its export credit guarantees and give Brazil about $147.3 million per year in damages to be used for a “technical assistance” fund. It also promised action on barriers to pork and beef imports from Brazil.
Foreign Minister Celso Amorim welcomed Washington’s move but told US Trade Representative Ron Kirk late on Thursday that “there was still a difficult negotiation ahead and that deadlines needed to met,” according to the ministry’s press office.
Diplomats, trade experts and business leaders are closely watching the case, one of a few in which the World Trade Organisation has allowed the wronged party to retaliate against a sector not involved in the dispute. Brazil would become the first country to apply cross-retaliation under WTO rules.
