Dispute Settlement at the WTO: Impacts of a No Deal in the US-Brazil Cotton Dispute

Csilla Lakatos and Terrie Walmsley

No 332059, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: On the day before Brazil was to start imposing retaliatory sanctions against the US in the WTO dispute settlement case regarding unfair domestic and export upland cotton subsidies, the parties have reached a preliminary concession aimed at settling this 8-year-long trade dispute. In this paper, we explore the economy wide impacts of a no deal with specific emphasis on intellectual property retaliation in a computable general equilibrium framework. As awarded by a WTO dispute settlement panel, Brazil would have been entitled to $591 million in retaliatory sanctions in goods sectors and $238 million in intellectual property sanctions. We find that retaliation by Brazil would have led to welfare gains for all countries except the US. Most importantly however, had Brazil not been allowed to retaliate in the form of suspension of intellectual property rights, the impact of trade retaliation alone would have been negative for both Brazil and the US, a case of shooting oneself in the foot to shoot at the other person’s foot.

Keywords: International Relations/Trade; Agricultural and Food Policy (search for similar items in EconPapers)
Pages: 32
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332059

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