December 27, 2010
WTO: Brazil wins the fight with the U.S. on orange juice
Decision was in the first instance, and the U.S. can still appeal
The World Trade Organization (WTO) considered as illegal dumping measures imposed by the United States to the Brazilian orange juice, said on Monday (20) the Brazilian Ministry of Foreign Affairs (Itamaraty). The decision is preliminary and the two parties can appeal. Only in February 2011, the organization will give the final word on the matter and might even establish the U.S. trade retaliation.
Since September 2009, the Brazilian Foreign Ministry questioned in the WTO forum the formula used by the United States to determine whether dumping exists in Brazilian exports of orange juice. According to the Itamaraty, the method overstates the dumping margins and adversely affect the Brazilian producers.
By means of dumping, a country sells goods abroad below the market price, eliminating the country's domestic production buyer do to unfair competition. By the mechanism known as zeroing, the United States disregard some businesses with higher price than the market, which rules out the dumping.
When applying anti-dumping measures, the United States overcharge Brazilian products, who pay extra fare to enter the U.S. market, besides the import tax. Thus, the commodity in Brazil is more expensive in the United States, discouraging sales.
According to the Foreign Ministry, the Americans have suffered similar convictions in the WTO by the method of application of antidumping measures for other products. Despite opposition from the trade organization, the United States, says Brazil, continue to hurt sales of Brazilian juice.
Largest world exporter of orange juice, Brazil sells abroad $ 1.7 billion per year. Of this total, about $ 400 million meant for the U.S..
In a statement, the Itamaraty said it could not comment on the content of the sentence because the WTO interim report is confidential. The Foreign Ministry, however, expressed satisfaction. "The government welcomed the panel's determinations and expects that they will be confirmed in the final report," the statement said.
This is the second victory of trade for Brazil against the United States in recent years. In December 2009, the WTO authorized the country to retaliate against the U.S. at US$ 830 million a year due to U.S. subsidies to cotton growers. After negotiations, Brazil has suspended the measure for two years while the two countries try to find a solution.
Source: Max Wellton, Brazil Agency reporter; edition: Joao Carlos Rodrigues
Translation by Google Translator with copy-desk by Maurício Galinkin, editor of the AgribusinessWatch.