A decision on whether the Brazilians retaliate against the US is due to be made next month

A decision on whether the Brazilians retaliate against the US is due to be made next month

The National Cotton Council has expressed its disappointment over reported comments made by Brazilian cotton producers that a new US farm bill is unlikely to address their concerns and that "retaliation" could be the only option.

The comments were understood to have been made by Brazilian producers visiting Washington for two days of talks.

The long-running dispute has already seen Brazil challenge US cotton subsidies at the World Trade Organization (WTO).

After the WTO ruled the US cotton subsidies were illegal, Brazil won the right to impose US$830m in retaliatory tariffs on US goods ranging from cars to milk powder - but postponed this in return for a $147.3m annual payment from the US to Brazilian farmers.

The payments ceased last year, but sanctions have been put on hold while Washington writes a new farm law expected to eliminate the long-standing subsidies.

With no new farm bill yet in sight, the Brazilians say a decision on whether to retaliate against the US will be made next month, according to Reuters.

In response, The National Cotton Council has said it is "deeply disappointed and disturbed" by the statements made by the Brazilian cotton industry representatives.

The organisation said they had "misrepresented the carefully negotiated agreement" between US and Brazilian grower organisations and "wrongly portrayed" the reformed cotton provisions in the farm legislation now being considered by Congress.

"The comments by the Brazilian growers that they would support retaliation are deeply disappointing to US growers who have delivered significant policy reform, supported further modifications to the cotton provisions, supported the request to expand authority to use the nearly $500m already transferred to the BCI, and supported maintaining the Framework Agreement.

"Although their comments were couched in politically correct terms like 'single undertaking', it is clear the Brazilian growers simply want more money in addition to the policy reforms. It is also clear that they are willing to misrepresent the insurance program to achieve their objective."

The NCC said it is prepared to accept, and has promoted, major policy reforms to settle the longstanding dispute.

The organisation said it is also willing, on final settlement, to "make good" its commitment to cooperate with the Brazilian industry.

"The US industry supports the reinstatement of the Framework Agreement. But, it is time for the Brazilian industry to acknowledge that the new cotton insurance programme is substantial reform. It is time to put this matter behind us, but the reported comments by the Brazilian delegation are not a step in the right direction."

Reuters said Brazil's foreign trade commission (Camex) is expected to hold public consultations in January with a view to finalising retaliatory measures by 28 February.