U.S., Brazil reach deal in trade dispute (Updated)

Update:

Via the New York Times:

The United States and Brazil have reached an agreement aimed at settling a long-standing trade dispute over American subsidies to cotton growers, officials in both countries said Tuesday...

Under the preliminary deal, Brazil would hold off on retaliation in exchange for American concessions that include the modification of an export loan program and the establishment of a temporary assistance fund for the Brazilian cotton industry. The broader issues in contention would be deferred until Congress takes up the next farm bill, most likely in 2012.

Original Post:

A possible trade war between allies in the U.S. and Brazil may’ve been permanently aborted.

Last month Brazilian officials announced that they would subject import tariffs on over 100 U.S. goods as well as restrictions on a list of U.S. patents. The trade sanctions would’ve cost at least $830 million and were to be retaliatory after a 2009 World Trade Organization ruling against U.S. cotton subsidies. But Brazil decided to grant a temporary reprieve, thus opening the door for talks and hopefully a negotiated settlement:

Brazil postponed the higher tariffs until at least April 22 after the U.S. signaled it may revise cotton subsidies, ease requirements for meat imports and establish a $147 million fund to promote Brazilian cotton producers, Carlos Cosendey, head of the Foreign Ministry’s economic department, told reporters yesterday in Brasilia.

“Now we have a serious negotiating process,” Cosendey said, adding that implementation of the sanctions could be delayed another 60 days. “Given these signs, Brazil agreed to postpone the retaliation.”

The move seemed to have affected Brazilian investors with the benchmark Bovespa index rising in trading yesterday.

Image- Huffington Post
Online Sources- Washington Post, BusinessWeek, Reuters