Brazil Will Again Apply For Arbitration In The Case Of "US Cotton Subsidy".

On August 22, 2008, Amorim, Minister of foreign affairs of Brazil, revealed that the Brazil government had informed its representative of the Geneva headquarters in Brazil that it requested to restart the arbitration procedure for the punishment of cotton subsidies in the United States.

Amorim said that it had informed the United States of the decision in July, but it still takes 45-60 days to determine the specific arbitrators and the amount of penalties involved in the procedure.

"We do not mean that we are not willing to settle the dispute through negotiations," Amorim said.

The dispute between Brazil and the United States began with Brazil's dissatisfaction with the subsidy given to cotton growers in the United States.

Brazil believes that the US subsidy for cotton planting has disrupted the fair trade in the cotton market and has had a great negative impact on cotton planting and commercialization in Brazil and other countries and regions in the world.

In September 2002, Brazil appealed to the WTO dispute settlement mechanism for the issue of US cotton subsidies.

According to the official estimate of Brazil, in August 1999 -2003 July, the United States provided huge subsidies to its domestic cotton growers for about 12 billion 500 million US dollars, thus keeping the United States in the second largest cotton producing country in the world.

Brazil has won a favorable decision in the WTO, forcing the us to reduce some subsidy schemes and get the right to punish the United States, but the amount of the final penalty still needs to be determined by arbitration.

Analysts believe that Brazil may raise billions of dollars in fines.