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Brazil seeks billions in trade sanctions from US

CANBERRA, Australia - Brazil plans to ask the World Trade Organization to impose punitive sanctions worth billions of dollars against the United States for handing out illegal cotton subsidies, its foreign minister said Wednesday.

A precise sanction figure was still being calculated and had yet to be formally lodged with the World Trade Organization arbitration panel, Brazilian Foreign Minister Celso Amorim said in the Australian capital Canberra.

‘It will certainly be in the area of billions,’ Amorim said. ‘It's certainly very high because the harm that these subsidies cause is very big.’

Brazil asked the WTO on Monday for approval to impose up to US$4 billion in annual sanctions against American goods and services, according to two trade officials, who were not authorized to speak to media and demanded anonymity.

Brazil first challenged US cotton subsidies before the WTO in 2002, arguing they give US cotton farmers an unfair advantage when exporting billions of dollars worth of the crop worldwide.

The US lost its final appeal in the case last June, giving Brazil the right to seek WTO authorization for retaliatory trade sanctions until Washington scraps the subsidies.

Last week, Amorim said he had asked Brazil's representative to the WTO to request that body ‘define the value of the retaliation’ Brazil might apply.

Brazil and several West African cotton-producing countries have long claimed their farmers suffer because of Washington's payments to US cotton growers, which they say ensures artificially high production and export levels, hurting Brazilian and African producers.

The Brazilian government claims the US retained its place as the world's second-largest cotton grower _ and biggest exporter _ by paying out US$12.5 billion in government subsidies to American farmers between August 1999 and July 2003. China is the largest grower of cotton, while Brazil is fifth.

Washington can still ask the WTO to authorize less in sanctions than Brazil is seeking, and said Tuesday that any US payments were not enabling American producers to undersell their foreign competitors.

Amorim, the first Brazilian minister to visit Australia since Prime Minister Kevin Rudd's government was elected in November last year, has discussed with Australian officials how the two agriculture-exporting nations can revive the WTO Doha round of trade liberalization negotiations.