USDA to Stop Cotton Payments to Brazil

By: Associated Press
By: Associated Press

WASHINGTON (AP) -- Agriculture Secretary Tom Vilsack says the United States will cease paying a $147 million annual settlement to Brazil that is part of a long-running trade dispute over cotton subsidies.

The United States agreed to pay the money to Brazil in 2010, just as the South American country said it would raise tariffs on hundreds of millions of dollars in American goods. Stopping the payments could mean Brazil re-issues that threat of retaliation.

The World Trade Organization said in 2009 that Brazil could retaliate against the United States because of illegal U.S. cotton subsidies.

Vilsack says in an interview that he doesn't have the authority to continue payments on Oct. 1 because Congress hasn't passed a farm bill or a budget.

The Brazilian foreign and agriculture ministries are declining to comment.

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