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WTO says Brazil can retaliate in US cotton dispute

(Agencies)
Updated: 2009-08-31 20:26

GENEVA: The World Trade Organisation (WTO) has awarded Brazil compensation in its dispute with the United States over US cotton subsidies, a Brazilian official said on Monday.

But a WTO arbitration ruling, allowing Brazil to retaliate against the United States, is so complex that officials are still trying to calculate the exact implications, he said.

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"To be frank it's a very thick dossier and we are still trying to comprehend what the contents are," said the official, speaking on condition he was not identified.

The WTO is due to publish the ruling at 1300 GMT.

Brazil had sought $2.5 billion in annual retaliatory trade sanctions -- which would normally be in the form of additional tariffs on imports of US goods -- but the United States had said a figure of $20-30 million was appropriate.

Besides the size of the compensation, a key question is whether Brazil will be allowed to "cross retaliate".

That would allow it to target US service or intellectual property, for instance by suspending copyright on US music or films, as Brazil imports little US cotton and its economy could suffer if it imposed sanctions on US manufactured goods.