Brazil seeks talks over US cotton, eyes drug case

Brazil wants to negotiate with the United States before retaliating over U.S. cotton subsidies and is considering a trade dispute with the European Union over generic drugs, Foreign Minister Celso Amorim said on Tuesday.

The World Trade Organization on Monday set out conditions for how Brazil can take action against the United States to compensate for U.S. cotton subsidies, ushering in a dispute over what the sanctions are worth.

“If the ruling is complied with (by the United States), there is no reason for us to retaliate,” Amorim said at a news conference in Brasilia, the capital.

“Shortly, we’ll have a list of points of retaliation. The existence of that list is going be a stimulus in the negotiations,” he said, adding that Brazil will seek talks before moving to retaliate.

“The objective of retaliation in the WTO is not punishment but getting the infractor country to change its legislation to comply with the rules,” Amorim said after a meeting with his counterparts from India and South Africa.

Brazil has said the ruling would entitle it to about $800 million in sanctions against the United States this year, including $340 million in “cross-retaliation” against intellectual property or services.

The United States has said the sanctions would be worth about $300 million, and that Brazil would be unlikely in the near future to be able to retaliate against intellectual property.

Brazil is also considering whether to request a formal dispute panel at the WTO over the treatment of generic drugs in the European Union, Amorim said.

“Let’s look at the consultations, see what they have to say and then we’ll decide if there will be a panel,” Amorim said.

An argument between the European Union and developing countries erupted late last year when Dutch customs authorities detained an Indian generic drug to treat high blood pressure while in transit to Brazil.

Developing countries say that and several other detentions of generic drugs put the health of millions of poor people at risk. They argued rich countries were practicing protectionism and trying to roll back privileged treatment poor countries had gained in recent years.

The EU initially said it had the right to inspect generic drugs in transit to protect its own citizens and those in developing countries from the risk of fake medicine.

“Today they are all apologizing but we cannot be sure it won’t happen again. That’s why the process in the WTO is important,” Amorim said, adding that Brazil was closely cooperating with India on the issue.