http://www.nytimes.com/2010/04/07/business/07trade.html"The United States and Brazil have reached an agreement aimed at settling a long-standing trade dispute over American subsidies to cotton growers, officials in both countries said Tuesday. The announcement came one day before Brazil was to begin imposing up to $830 million in sanctions with authorization from
the World Trade Organization. The trade body had
ruled last August that American subsidies to cotton growers had violated global trade rules.Under the preliminary deal, Brazil would hold off on retaliation in exchange for American concessions that include the modification of an export loan program and the establishment of a temporary assistance fund for the Brazilian cotton industry. The broader issues in contention would be deferred until Congress takes up the next farm bill, most likely in 2012.
The Brazilian sanctions were to include $591 million in higher tariffs on a wide array of goods, including autos, pharmaceuticals, medical equipment, electronics, textiles and wheat.
The case was also closely watched because Brazil would have been the first country to violate American intellectual property rights in retaliation for unfair trade policies under the approval of W.T.O. arbitrators. Brazil had threatened, for example, to stop charging its farmers technology fees for seeds developed by American biotechnology companies and to break American pharmaceutical patents before their scheduled expiration.“
Traditionally, retaliation in trade has been the preserve of the largest developed countries, which have market power,” said Robert Z. Lawrence, a professor of international trade and finance at the Harvard Kennedy School. “
But this mechanism — suspending intellectual property protection — gives smaller, developing countries a way to enforce their rights under trade rules.”"
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