Importers Have Short Time to Comment
Before Retaliation List Finalized

The Brazilian Chamber of Foreign Trade (CAMEX) published Nov. 9 a list of 222 items (click here for full list [PDF]) of U.S.-origin products that may be subject to retaliatory duties of up to 100% beginning in January 2010. The World Trade Organization ruled in August that Brazil may impose these duties because the U.S. has failed to comply with an earlier WTO ruling against subsidies provided to U.S. cotton growers. Brazil is now claiming the right to retaliate against up to US$900 million in U.S. goods and services.

Brazilian imports of the U.S. goods on the CAMEX list are valued at US$2.7 billion, representing 10.6% of all goods imported from the U.S. in 2008. Industry and commercial associations and other entities now have until Nov. 30 to provide input on the listed products. After considering domestic industry and consumer interests, CAMEX will develop a final list of about US$450 million worth of U.S. goods and present it to the WTO for approval. These products will then be subject to import duties of up to 100%.

CAMEX has indicated that it may also consider retaliation against U.S. intellectual property rights and services totaling US$450 million, a move that is nearly unprecedented. Given the potential implications of this so-called cross-retaliation and the conflicting opinions as to whether or not to take such a step, the Brazilian government has not yet decided whether to do so . However, Carlos Cozenendey, director of the Itamaraty Economic Department, has said that unless the U.S. takes measures regarding its cotton subsidies there will be retaliation.

Brazilian importers of any of the goods on the attached list should act immediately to voice their concerns regarding the potential duty increase on those goods. This list is not yet final and is still open to amendment. Sandler & Travis professionals in our Washington and São Paulo offices can provide valuable assistance to businesses interested in revising this list and submitting comments to that effect to the government and/or their industry associations.

For more information, please contact:

Jennifer Mulveny
Washington, D.C.
Tel: (202) 216-9307
Fax: (202) 842-2247
jmulveny@strtrade.com

Claudio Marques
São Paulo, Brazil
Tel: +55-11-3045-3080
Fax: +55-11-3045-7550
cmarques@strtrade.com

Carol Guthrie, spokeswoman for US Trade Representative Ron Kirk remarked that “While we remain disappointed with the outcome of this dispute, we are pleased that the arbitrators awarded Brazil far below the amount of countermeasures it asked for.”

In response to the legal defeats, the U.S. Congress has scrapped some export credits and in 2006 repealed the “Step-2″ cotton-marketing program that made payments to exporters and domestic mill users as compensation for buying higher-priced American cotton.

But last year it approved a new farm bill worth nearly $300 billion that left a number of other contentious cotton programs intact.

“Few WTO disputes have been as difficult — or as politicized — as the fight over U.S. cotton subsidies,” says Brendan McGivern, a partner at White & Case law firm in Geneva who represented cotton-growing nations Benin and Chad in the case at no charge until 2004.

“The subsidies paid by the United States to its 25,000 cotton farmers exceed the entire gross national income of virtually every cotton-exporting country in West and Central Africa,” McGivern said. “Despite several rounds of litigation and ministerial-level negotiations, this issue remains unresolved.”

For more on this hot topic, visit Google News.

In addition, Brazil’s government could target medical sector products as part of its $800 million retaliation against U.S. cotton subsidies granted in a World Trade Organization ruling, Brazilian Foreign Relations Minister Celso Amorim hinted Tuesday, according to the Estado news agency.

“We are going to choose the sectors that least effect us and most affect the U.S.,” he said.

Amorim said Brazil’s government would soon present a “little list” of U.S. goods, services, and patents that it believes should be subject to sanctions under the ruling.

For more on the ongoing retaliation story, visit the Wall Street Journal.

The New BRIC (Sorry but I cannot embed the video directly.)

Disclaimer: They start talking about investing near the end. Please do not consider this financial or legal advice, especially not from myself and Trade-Compliance.org

Indonesia is certainly an up-and-coming economy with a lot of resources – but will it be able to match the growth of the BRIC countries?

What do you think – is Indonesia an import or export market to keep your eye on? What other countries do you think will come out ahead during the coming global recovery?