U.S. and Brazilian authorities reported April 6 that Brazil has agreed to postpone the implementation of retaliatory sanctions against the U.S. after the two sides reached an agreement on interim steps the U.S. will take in response to World Trade Organization rulings against its cotton subsidy programs.

Brazil had been scheduled to increase import tariffs on a number of U.S. goods starting April 7 and had also been moving ahead with plans to suspend various concessions or obligations with respect to U.S. intellectual property rights.

According to statements from the two governments, retaliation will be postponed until April 22 while the U.S. works to implement the following commitments.

  • establish a fund of $147.3 million per year to provide technical assistance and capacity building projects that will benefit Brazilian cotton crops (this fund will remain in place until passage of the next Farm Bill or a mutually agreed solution to the cotton dispute is reached, whichever is sooner)
  • near-term modifications to the operation of the GSM-102 export credit guarantee program and technical discussions between the two governments regarding further operation of this program
  • publish by April 16 a proposed rule to recognize the Brazilian state of Santa Catarina as free of foot-and-mouth disease, rinderpest, classical swine fever, African swine fever and swine vesicular disease; complete a risk evaluation that is currently underway; and identify appropriate risk mitigation measures to determine whether fresh beef can be imported from Brazil while preventing the introduction of FMD into the U.S.

If these objectives are achieved by April 21 Brazil will again postpone retaliation, likely for another 60 days, while the two sides work to agree on a process for reaching a permanent solution to the cotton dispute. Brazil’s Foreign Trade Council (CAMEX) warned, however, that Brazil will continue to pursue full compliance with the WTO rulings and that any agreement on compensatory measures or partial compliance will only be accepted on a temporary basis.