The same US Trade Representative that authorized a $400-million annual bribe to Brazil to refrain from any retaliatory measures approved several times by the World Trade Organization over a too-ambitious US cotton support program last week rejected a good-faith effort to fix the problem.
A senior-level Brazilian came to town ready to compromise – to see if there could be a way forward to finally resolving the multi-year dispute.
Timing is important. The House and Senate are getting into a long-awaited conference to craft a single multi-year farm bill – which was due on September 30. There is no animosity against Brazil on Capitol Hill, with both staff and members anxious to work out a compromise.
USTR said “thanks, but no thanks” and sent Brazilian WTO ambassador Roberto Azevêdo packing.
Mr. Azevêdo had planned on a quiet visit to Washington. He had scheduled a private meeting with the US-Brazil Business Council, but less than 24 hours before the event, he decided to open it to the press to have his say. His message was short and stark – unless the United States commits to do what the WTO ordered it to do in a number of dispute panel determinations, Brasilia will have no choice but move ahead with some powerful sanctions. There will be stiff duties on US imports as well as denial of intellectual property rights to some big US copyright holders – totaling upwards of $800 million annually.
Brasilia does not want to continue the dirty arrangement of handing over US taxpayers’ money to Brazil so its cotton growers and manufacturers can promote their own product in the world market in direct competition with US growers.
Mr. Azevêdo offered some strong hints at his Thursday presentation that Brasilia was willing to bend – for the first time – and settle on a practical solution. It would involve some “tweaking” of the numbers in the current legislation – which he implied could be accomplished with a little help from the Obama Administration.
The answer was a simple “NO,” the ambassador told the business executives.
USTR in 2010 touted the arrangement with Brazil as the second major accomplishment for US trade policy.
The first involved a longstanding dispute over Brussels’ ban on imports of hormone-treated US beef. As one of his first decisions in office, USTR Kirk agreed and let the woefully illegal WTO EU ban continue unchallenged to this day.
Another great negotiating tactic by USTR.