Brasilia - Brazil's foreign trade council Camex said Wednesday it will hold public consultations next month before deciding if it will apply cotton sanctions in protest at US subsidies.
The two countries reached agreement on the issue in 2010 but Camex said it was preparing the ground for “possible application of sanctions,” a move which won the approval of Brazil's confederation of industry.
In 2009, the World Trade Organization, in a rare move, allowed Brazil to take cross-retaliatory measures worth $830 million in response to US subsidies to American cotton producers, ruling they were discriminatory.
The WTO accepted Brazil's argument that the US subsidies distort the market and hit Brazilian exports.
In 2010, before Brazil launched threatened sanctions, Washington proposed an accord under which the United States would pay an annual $147.3 million spread out in monthly instalments to Brazil's Cotton Institute pending a new US farm law phasing out cotton subsidies.
But Camex observed that “three years have gone by and no new farm law has been approved.”
The organization added that since September “the United States has not been making the payments” either. - Sapa-AFP