U.S. farm bill may halt Brazil cotton retaliation...for now
"I'm not really hopeful at this point in time that the farm bill will be sufficient to put this debate to rest," said Burleigh Leonard, a senior consultant with Prime Policy Group in Washington. "If this dispute is not resolved and Brazil moves ahead with retaliation that will certainly exacerbate tensions between both countries."
The Brazilian Foreign Ministry said in an e-mail response to Reuters that the government is currently analyzing the bill to make sure it complies with WTO rules.
Brazilian cotton producers will keep pressuring the government to oppose legislation "that creates even more market distortions than the previous one," said Renata Amaral, a consultant with the country's cotton growers association.
Although Brazil is nearly ready to retaliate by raising tariffs on U.S. products and suspending intellectual property rights on drugs, seeds, movies and other products, authorities have been very cautious.
Andre Rizzo, the executive director of the government's foreign trade commission, told Reuters last month that Brazil will "need to be careful because you don't want to affect the business environment. Nobody benefits from retaliation."
The global cotton industry has been hit hard by four seasons of excess output and as textile mills increase their use of lower-cost, synthetic alternatives.