BRASILIA, (Reuters) – After finally turning the page on a dispute over spying that hampered attempts to deepen trade ties, Brazil and the United States may be headed for another clash, this time over U.S. farm subsidies.
Brasilia is gathering evidence to show that the United States is increasing subsidies for soy and corn farmers, which threatens to further push down prices for the key crops grown in the South American country and hurt its already sputtering economy, four Brazilian officials told Reuters.
Although it is too early to launch a full-out trade dispute, Brazil plans to apply pressure on Washington by questioning its farm program at the World Trade Organization’s agriculture committee and by rallying support among other commodities exporters, officials said.
Brazil’s growing concerns over U.S. farm subsidies comes as President Dilma Rousseff prepares to visit Washington in June, a trip aimed at bolstering trade between the hemisphere’s two largest economies.
It took more than a year of intense negotiations for Rousseff to reschedule the trip, which was originally set to take place in 2013 but was scrapped following revelations that Washington spied on her personal communications.
Although Rousseff will not address the concerns about farm subsidies directly with U.S. President Barack Obama, her aides plan to bring it up in meetings with U.S. officials ahead of the visit, one of the Brazilian officials said. They all spoke on condition of anonymity to discuss the plans candidly.
“We are certain that U.S. subsidies will rise, but we need to gather evidence during the next harvest to build our case,” said another official involved in trade policymaking. “We don’t rule out a trade dispute, but we are in the early stages.”
The U.S. government says its farm programs are transparent and fair and do not distort commodity markets.
“The new farm bill programs have minimal effects on production and trade and, as such, we are confident that the programs are in compliance with our WTO commitments,” Cullen Schwarz, a U.S. Department of Agriculture spokesman, said in email response to questions from Reuters. He was referring to the 2014 U.S. farm bill.
