The World Trade Organisation authorised Brazil today to impose trade sanctions on the United States over its support for cotton, as Brazil ratcheted up pressure on Washington over the illegal subsidies, according to Reuters. But Brazil is not yet ready to levy the sanctions, as it considers which U.S. products to target and analyses U.S. data on subsidies which will determine the size of retaliation. The formal move at the WTO"s dispute settlement body (DSB) brought Brazil one step closer to retaliating against the United States, the world"s biggest cotton exporter, in the highly sensitive 9-year-old row. The reduction of rich countries" cotton subsidies is seen by developing countries as the litmus test of efforts to reform the world trading system in the WTO"s Doha round, with African producers in particular demanding radical change. Brazil"s request to go ahead and impose sanctions, following an award by WTO arbitrators on Aug. 31, responds to the U.S. failure to comply with earlier WTO rulings condemning the subsidies, which distort the world market for cotton, hurting farmers in poor countries. But U.S. WTO diplomat Juan Millan told the dispute body that Washington did intend to comply with the rulings and so Brazil would not need to levy the sanctions. "While the United States understands that the DSB will today be authorising the suspension of concessions or other obligations, we do not believe that it will be necessary for Brazil to exercise that authorisation," he said in a statement. He said imposing sanctions could hurt the economies of both the United States and Brazil.
