Chamber Calls On White House To Restart Brazil Payments, Warns Of Retaliation
November 26, 2013
Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, last week urged the White House to continue making payments to Brazil under a bilateral settlement deal that temporarily quelled a fight over U.S. farm subsidies, and warned that failure to do so could lead Brazil to impose potentially damaging trade retaliation.
In a Nov. 21 letter to White House Chief of Staff Denis McDonough, Donohue noted that since September the U.S. has failed to make the agreed-upon $12.25 million monthly payment to the Brazil Cotton Institute, an organization geared toward improving cotton production in Brazil. He added that although the U.S. Department of Agriculture (USDA) has said it lacks authority to continue the payments, that is a position ‘many experts have questioned.’
‘As a result, the Brazilian government is preparing a list of U.S. products and sectors against which it may retaliate with new tariffs and other measures,’ Donohue wrote, according to a copy of the letter obtained by Inside U.S. Trade. ‘This retaliation could commence as early as Nov. 30.’ Donohue said the Chamber supports a lasting resolution of the dispute with Brazil through the passage of a new farm bill that brings the U.S. into compliance with the World Trade Organization ruling at the root of the fight. But he argued that the U.S. must uphold its end of the settlement deal in the meantime.
‘[I]t is imperative that the United States comply with the Framework Agreement to avoid costly, job-killing trade sanctions against U.S. manufacturers, farmers and innovators,’ he wrote.
Sources familiar with the Brazilian government’s deliberations have said a special inter-ministerial group known as CAMEX is slated to convene tomorrow (Nov. 27) and consider a ‘menu’ of options for the monetary value, method and timing of imposing trade retaliation. But, in absence of the U.S. payments, it is almost certain that CAMEX will move to finally retaliate, they said.
A business source said that, thus far, the White House has not shown any intention of restarting the payments, despite calls from the Chamber and other business groups to do so, and appears to doubt the resolve of Brasilia to move ahead with retaliatory measures.
