[Ip-health] Bloomberg: Brazil to Sanction U.S. on Goods, Intellectual Rights

[Thiru Balasubramaniam]

http://www.businessweek.com/news/2010-02-09/brazil-to-sanction-u-s-on-goods=
-intellectual-rights-update1-.html

Bloomberg

Brazil to Sanction U.S. on Goods, Intellectual Rights (Update1)
February 09, 2010, 06:13 PM EST

By Iuri Dantas

Feb. 9 (Bloomberg) -- Brazil may break patents on U.S. goods in
accordance with a World Trade Organization ruling allowing it to
impose trade sanctions in retaliation for U.S. cotton subsidies, a
Brazilian trade official said.

=93We intend to retaliate on intellectual property rights and services,=94
Marcio Cozendey, head of the economic department of Brazil=92s foreign
ministry, told reporters in Brasilia. =93Breaking patents is a
possibility,=94 he added without providing additional details.

The WTO ruled in August that Brazil has the right to impose $294.7
million annually in sanctions against the U.S. because of subsidies
paid to American cotton farmers, the second highest amount ever
permitted by the Geneva-based trade arbiter.

Brazil says that amount has since grown as U.S. payments to cotton
farmers exceed a specific cap. Cozendey said Brazil can impose up to
$830 million in sanctions, including $560 million on goods and the
rest on intellectual property rights and services.

Brazil=92s government will take a decision this month on which of 222
eligible products it will impose the sanctions, Celio Porto, an
agricultural ministry trade official said in an interview.

The list of potential targets includes agricultural and textile
products as well as U.S. exports such as electronics, cosmetics,
ketchup, cars, chewing gum, medical equipment and pharmaceuticals.

=93The broader our retaliation the better it will be, as it increases
the pressure on the U.S.,=94 Cozendey said, adding that U.S. trade
officials have cited difficulties in winning congressional approval to
end the cotton program. =93Many sectors of the American society will
want their government to follow WTO rules.=94

As much as $4 billion in annual U.S. payments to cotton farmers
violate global trade rules by encouraging excess production and
driving down world prices, the WTO found in 2004. The U.S., the
world=92s largest exporter of the fiber, hasn=92t done enough to scrap aid
to its cotton producers, the WTO found in 2008.

The U.S. told the trade arbiter in November that it =93intends to
comply=94 with WTO recommendations and =93don=92t believe it will be
necessary=94 that Brazil impose the sanctions.

Subsidies help commodity buyers -- such as Archer Daniels Midland Co.,
Bunge Ltd. and ConAgra Foods Inc. -- while distorting trade and
harming economic development in poorer nations, according to groups
such as Boston-based Oxfam America and the Washington-based
Environmental Working Group, which favors subsidy reductions and keeps
a database of farm payments.




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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


Tel: +41 22 791 6727
Mobile: +41 76 508 0997