UNITED STATES – SUBSIDIES ON UPLAND COTTON
Document: Communication from Brazil
Date: 12 March 2010
Document codes: WT/DS267/43; WT/DS267/ARB/1.
Complainant: Brazil
Respondent: U.S.
Third parties: Argentina, Australia, Benin, Canada, Chad, China, Taiwan, EU, India, New Zealand, Pakistan, Paraguay, Venezuela, Japan, Thailand
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 3, 5, 6  Subsidies and Countervailing Measures (SCM)Art. 3.3, 7.1, 8, 9.1, 10.1  AgricultureArt. III:4, XVI  GATT 1994

UNITED STATES – SUBSIDIES ON UPLAND COTTON

Communication from Brazil

 The following communication, dated 8 March 2010, from the delegation of Brazil to the
Chairman of the Dispute Settlement Body, is circulated at the request of that delegation.

 On 19 November 2009, the Dispute Settlement Body ("DSB") authorized Brazil to suspend
the application to the United States of concessions or other obligations consistent with the Arbitrator's
Decision contained in document On the same date, the DSB also authorized
Brazil to suspend the application to the United Stat es of concessions or other obligations consistent
with the Arbitrator's Decision contained in document and Corr.1.

 The authorizations were granted pursuant to Brazil's requests contained in documents
 and In both requests, Brazil undertook to notify the DSB of the
countermeasures it intended to adopt prior to bringing them into force.

 Application of the methodology established by the Arbitrator in paragraph 6.5(a) of the
Decision contained in document , using data from the most recent period for which
complete data are available (fiscal year 2008 a nd calendar year 2008), yields an annual level of
countermeasures of US$ 682 million. Adding this valu e to the annual fixed level of countermeasures
of US$ 147.3 million that arises from the Deci sion contained in document and
Corr.1, results in a total annual level of countermeasures of US$ 829.3 million.

 On the basis of the same period, the threshol d described in paragraph 5.201 of the Decision
contained in document , as well as in paragraph 5.201 of the Decision contained in
document and Corr.1, updated to acc ount for the change in Brazil's total imports
from the United States, is US$ 561 million.

 Paragraph 6.5(b) of the Decision contained in document WT/DS267/ARB/1 reads as follows:

"In the event that the total level of countermeasures that Brazil would be entitled to in
a given year [footnote] should increase to a level that would exceed the threshold
described in paragraph 5.201, updated to account for the change in Brazil's total
imports from the United States, then, Brazil would also be entitled to seek to suspend
certain obligations under the TRIPS Agreem ent and/or the GATS, as identified in
footnote 468, with respect to any amount of permissible countermeasures applied in
excess of that figure." [Text of footnote]: "It is understood that this amount is to be
calculated taking into account the entirety of the level of countermeasures that Brazil
is entitled to at that point in time, arising both from the application of the formula
identified in paragraph 6.5(a) and from the Decision by the Arbitrator contained in
WT/DS267/ARB/2."

 But for the cross-references, the text of pa ragraph 6.5(b) of the Decision contained in
document WT/DS267/ARB/2 and Corr.1 is identical.

 In light of the above, starting from 7 April 2010 , Brazil will suspend the application to the
United States of concessions or other obligations under the General Agreement on Tariffs and Trade
1994 (GATT 1994) in the form of increased import du ties on certain products when they are imported
from the United States. The products that will be s ubject to the increased duties, together with the
total rate of ad valorem duty that will be applied as a result of the increase, are listed in the Annex.
This suspension corresponds, over one year, to a total value of approximately US$ 591 million.
Should there be any changes to the above-menti oned countermeasures during the period of their
application, Brazil will notify the DSB before the changes come into effect.

 Since the total annual level of countermeasur es to which Brazil is currently entitled exceeds
the threshold identified above, Brazil will also suspe nd the application to the United States of certain
concessions or obligations under the Agreement on Trade-Related Aspects of Intellectual Property
Rights ("TRIPS Agreement") and/or the General Agreement on Trade in Services (GATS), up to an
annual amount of approximately US$ 238 million. Brazil will notify to the DSB the specific
concessions or obligations under TRIPS and/or GATS whose application to the United States will be
suspended before such suspension comes into force.

ANNEX

Code Description of Goods*
Increased
Tariff (applied
to US goods
only)
0303.51.00 --Herrings ( Clupea harengus, Clupea pallasii) 30%
0402.10.10 Of an arsenic, lead or copper conten t, taken separately, of less than 5 ppm 48%
0404.10.00 -Whey and modified whey, whether or not concentrated or containing added
sugar or other sweetening matter
48%
0504.00.13 Of swine 28%
0802.21.00 --In shell 26%
0802.31.00 --In shell 30%
0802.32.00 --Shelled 30%
0806.20.00 -Dried 30%
0808.20.10 Pears 30%
0809.20.00 -Cherries 30%
0809.40.00 -Plums and sloes 30%
1001.90.90 Others 30%
1502.00.11 Raw 26%
1507.90.90 Others 30%
1514.11.00 --Crude oil 30%
1514.19.10 Refined 30%
2005.20.00 -Potatoes 34%
2009.90.00 -Mixtures of juices 34%
2103.20.10 In immediate containers holding not more than 1 kg 38%
2103.90.91 In immediate containers holding not more than 1 kg 38%
2106.10.00 -Protein concentrates and textured protein substances 34%
2106.90.30 Preparations often refe rred to as food supplements 36%
2106.90.50 Sugar-free chewing gum 36%
2106.90.90 Others 36%
2202.90.00 -Others 40%
2303.20.00 -Beet-pulp, bagasse and other waste of sugar manufacture 26%
2905.11.00 --Methanol (methyl alcohol) 22%
2929.10.21 Isomer mixture 28%
3003.90.55 Paracetamol; bromopride 28%
3004.20.19 Other 14%
3004.20.79 Other 14%
3004.39.39 Other 14%
3004.40.90 Other 14%
3004.90.49 Other 14%
3005.10.90 Other 12%
3006.10.90 Other 22%
3303.00.20 Toilet waters 36%

Code Description of Goods*
Increased
Tariff (applied
to US goods
only)
3304.10.00 -Lip make-up preparations 36%
3304.99.10 Beauty creams; tonic lotions 36%
3304.99.90 Other 36%
3305.10.00 -Shampoos 36%
3305.90.00 -Other 36%
3306.10.00 -Dentifrices 36%
3306.90.00 -Other 36%
3307.10.00 -Pre-shave, shaving or after-shave preparations 36%
3307.20.90 Other 36%
3307.90.00 -Other 36%
3401.19.00 --Other 36%
3402.90.39 Other 36%
3923.30.00 -Carboys, bottles, flasks and similar articles 36%
4011.10.00 -Of a kind used on motor cars (including station wagons and racing cars) 32%
4011.20.90 Other 32%
4908.90.00 -Other 32%
5201.00.20 Not further prepared than ginned 100%
5201.00.90 Other 100%
5203.00.00 Cotton, carded or combed 100%
5208.21.00 --Plaine weave, weighing not more than 100 g/m² 100%
5209.32.00 --3-thread or 4-thread twill, including cross-twill 100%
5703.20.00 -Of nylon or others polyamides 60%
5903.90.00 Other 48%
6116.10.00 -Gloves impregnated, coated or covered with plastics or rubber 60%
6203.42.00 --Of cotton 100%
6204.62.00 --Of cotton 100%
6303.92.00 --Of synthetic fibres 60%
6307.90.10 Of synthetic fibres 60%
6307.90.90 Other 60%
7113.19.00 --Of other precious metal other or not plated or clad with precious metal 36%
8212.10.20 Razors 36%
8212.20.10 Blades 36%
8418.40.00 -Freezers, upright, not exceeding 900 litres capacity 40%
8433.11.00 --Powered, with the cutting devi ce rotating in a horizontal plane 36%
8471.90.12 Bar-code readers 22%
8506.80.90 Other 32%
8516.60.00 -Other ovens; cookers, cooking plat es, boiling rings, grillers and roasters 40%
8517.12.31 Portable 32%
8518.10.90 Other 40%

Code Description of Goods*
Increased
Tariff (applied
to US goods
only)
8518.21.00 --Single loudspeakers, mounted in their enclosures 40%
8518.22.00 --Multiple loudspeakers, mount ed in the same enclosure 40%
8518.30.00 -Headphones and earphones, whether or not combined with a microphone,
and sets consisting of a microphone and one or more loudspeakers
40%
8518.50.00 -Electric sound amplifier sets 40%
8521.90.90 Other 40%
8525.80.19 Other 40%
8525.80.29 Other 40%
8527.21.90 Other 40%
8528.49.29 Other 40%
8703.21.00 --Of a cylinder capacity not exceeding 1 000 cc 50%
8703.23.10 With a seating capacity of not more than 6, including the driver 50%
8703.24.10 With a seating capacity of not more than 6, including the driver 50%
8703.24.90 Other 50%
8703.33.10 With a seating capacity of not more than 6, including the driver 50%
8711.50.00 -With reciprocating internal com bustion piston engine of a cylinder capacity
exceeding 800 cc
40%
8903.92.00 --Motorboats, other than outboard motorboats 40%
8903.99.00 --Other 40%
9004.10.00 -Sunglasses 40%
9008.30.00 -Other image projectors 36%
9018.32.19 Other 32%
9018.39.10 Needles 32%
9021.10.20 Splints and other fracture appliances 14%
9021.39.80 Other 28%
9102.11.10 With case of base metal 40%
9403.70.00 -Furniture of plastics 36%
9603.21.00 --Tooth brushes, including dental-plate brushes 36%

* Brazil adopts the description contained in Mercos ur Common Nomenclature, which is based on the
Harmonized Commodity Description and Coding System (HS). The Mercosur Common
Nomenclature has authentic versions in Portuguese and Spanish. The translation above is made for
reference purposes only. No right or privilege is waived or lost by any error in the translation of the
official descriptions.