US to pay $300M to end Brazil cotton trade dispute – officials

BRASILIA/WASHINGTON (Reuters) – The United States will pay Brazilian cotton producers $300 million to settle a decade-old dispute over cotton subsidies, two officials familiar with the settlement said yesterday, the first concrete step to repair ties hurt by an espionage scandal.

The agreement will be formally signed today in Washington after Brazilian Agriculture Minister Neri Geller and Foreign Minister Luiz Alberto Figueiredo travelled to the US capital to finalise details.

“Everyone is relieved that this case is finally being put behind us and that Brazil and the US can now move on to the many common interests that unite us,” one of the officials familiar with the settlement said.

In exchange for the one-off payment to the Brazil Cotton Institute, or IBA, Brazil agreed not to take any further trade measures against the United States. The official said the United States could implement a new farm bill without concerns about retaliation.

“When you consider what was on the line for both sides, this is a win-win deal,” he said.

US Trade Representative Michael Froman and Secretary of Agriculture Tom Vilsack are expected to sign the agreement for the US side.

Relations between the United States and Brazil were strained last year by revelations the National Security Agency spied on President Dilma Rousseff with secret Internet surveillance programs made known in documents leaked by former NSA analyst Edward Snowden.