Brazil and the U.S. have ended a longstanding trade battle. The two countries have been fighting since 2002 over subsidies that the U.S. government provides to U.S. cotton growers. Brazil brought a case against the U.S. charging that the subsidies were a violation of global trade regulations. A World Trade Organization ruling in Brazil’s favor forced the U.S. to make $147 million annual payments starting in 2010 as the South American country prepared to raise tariffs on hundreds of millions of American-made products.
Under terms of the settlement reached Oct. 1, the U.S. will make a final one-time payment of $300 million to Brazil as the cotton case is dropped. Meanwhile, a provision in the Farm Bill passed by Congress in February includes an insurance program for cotton growers that complies with the WTO ruling and will prevent Brazil from taking new WTO actions against the U.S. over cotton support initiatives.
