GENEVA — American goods will face around $295 million in annual sanctions as a result of the United States' failure to eliminate illegal subsidies to U.S. cotton growers, the World Trade Organization ruled Monday.
The result was disappointing for Brazil, which has won a series of rulings against the United States over the last seven years. The South American country sought to target American goods and drug patents for $2.5 billion worth of economic retaliation.
The WTO ruled the sanctions should vary depending on U.S. payments each year. Arbitrators used 2006 as a base year for the ruling, and said U.S. payments would have to increase significantly for Brazil to be allowed to punish American drug patents.
"The cumulated amount of countermeasures to which Brazil is entitled to is $294.7 million," the WTO said in a two-part ruling totaling 269 pages.
Washington argued that the award should not exceed $30 million.
Monday's ruling was the fifth major decision since the Brazilian government brought the case to the WTO in 2002, alleging that the United states was able to retain its place as the world's second-largest cotton producer by paying out some $3 billion to American farmers each year. China is the largest exporter of cotton, while Brazil is fifth.
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