US embassy cable - 05BRASILIA2216

UNCLAS BRASILIA 002216 
 
SIPDIS 
 
TOFAS 117 ADMIN 
STATE PASS USTR FOR LYANG 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D 
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/DDEVITO/DANDERSON/EOL SON 
 
E.O. 12958: N/A 
TAGS: EAGR, ETRD, WTO 
SUBJECT: LETTER FROM AG MINISTER RODRIGUEZ REGARDING THE WTO 
COTTON SUBSIDIES CASE 
 
REF: CORRESPONDENCE DATED JULY 5, 2005 
 
1.ON JULY 5, BRAZILIAN AGRICULTURE MINISTER RODRIGUES WROTE 
THE LETTER SET FORTH IN PARAGRAPH 2 BELOW TO AMEMBASSY 
BRASILIA FAS COUNSELOR. 
 
2. BEGIN INFORMAL TRANSLATION 
 
3. THE BRAZILIAN GOVERNMENT NOTES THAT, ON JUNE 30, 2005, 
THE UNITED STATES DEPARTMENT OF AGRICULTURE ANNOUNCED 
CHANGES IN THE EXPORT CREDIT GUARANTEE PROGRAMS. THE 
BRAZILIAN GOVERNMENT ALSO NOTES, WITH SATISFACTION, THE 
ANNOUNCEMENT THAT LEGISLATIVE PROPOSALS, REQUESTING THE 
COMPLETE REMOVAL OF THE "STEP 2" PROGRAM AND THE GSM 103 
CREDIT GUARANTEE PROGRAM, HAVE BEEN SENT TO THE U.S. 
CONGRESS. 
 
THE BRAZILIAN GOVERNMENT ALSO RECOGNIZES THAT THESE MEASURES 
CONSTITUTE A POSITIVE STEP TOWARDS THE SOLUTION OF THE 
DISPUTE. WITH RESPECT TO THE EXPORT CREDIT GUARANTEE 
PROGRAMS, THIS GOVERNMENT WILL EXAMINE THE PROPOSALS TO 
DETERMINE WHETHER THEY WILL BE SUFFICIENT TO FULLY COMPLY 
WITH THE DSB'S RECOMMENDATIONS. WITH RESPECT TO "STEP 2", IF 
THE PROPOSAL FORWARDED TO THE U.S. CONGRESS IS APPROVED, THE 
DSB'S RECOMMENDATIONS RELATED TO THAT PROGRAM WILL BE 
ANSWERED. 
 
HAVING PRESENTED WITH THIS SCENARIO, THE BRAZILIAN AND U.S. 
GOVERNMENTS HAVE REACHED A BILATERAL UNDERSTANDING THAT 
CONTEMPLATES THE IMMEDIATE SUSPENSION OF THE ARBITRATION 
PROCEEDINGS REFERRED TO ABOVE; THE UNDERSTANDING 
CONTEMPLATES THAT, AT ANY GIVEN MOMENT, BY BRAZIL MAY SEEK, 
A PANEL FOR THE EXAMINATION OF THE CONSISTENCY OF THE NEW 
MEASURES ADOPTED BY THE UNITED STATES WITH THE MULTILATERAL 
DISCIPLINES (REVISION PANEL). IN ADDITION, IT AFFORDS BRAZIL 
THE POSSIBILITY OF RETAKING, BY BRAZIL, THE ARBITRATION 
PROCEEDING UNDER ARTICLE 22.6, IN CASE THE REVISION PANEL 
FINDS THAT THE ADOPOTED MEASURES ARE NOT SUFFICIENT TO 
ANSWER DSB'S RECOMMENDATIONS. 
 
THE BRAZILIAN GOVERNMENT WILL REMAIN COMMITTED TO PROCEED 
WITH THE BILATERAL AGREEMENTS THAT HAVE BEEN SUSTAINDED OVER 
THE LAST WEEKS WITH THE U.S. GOVERNMENT, WITH THE INTENTION 
TO REACH A SOLUTION TO THE DISPUTE, WHICH IS MUTUALLY 
SATISFACTORY AND FULLY COMPLIES WITH THE IMPLEMENTATION OF 
THE DSB'S RECOMMENDATIONS. 
 
END INFORMAL ENGLISH TRANSLATION 
 
LINEHAN