Related topics

Brazil, Canada Dispute Subsidies

January 23, 2001

SAO PAULO, Brazil (AP) _ In a sign that a five-year dispute over export subsidies is heating up, Brazil says it could boycott Canadian chemicals used for fertilizers if Canada imposes threatened trade sanctions.

Brazil’s agriculture minister Marcus de Pratini Moraes said Brazil could try to avoid buying potassium chloride from Canada, which sold $167 million worth of the chemical fertilizer base to Brazil last year, according to his press secretary, Tito Matos.

Matos said Pratini, who is currently touring Europe, had met with Brazilian fertilizer producers to find alternative sources to the Canadian base.

``The farming sector will be the first to respond, as everything Brazil imports from Canada in this sector can be substituted,″ Moraes told reporters Monday in Geneva.

According to business daily Gazeta Mercantil, the boycott could spread to other products such as wheat grain, peas and sulphur that are worth some $250 million a year to Canadian exporters.

A possible alternative source for fertilizer base could be Poland.

``The trade structure is quite clear: a retaliation will be worse for Canada than it will be for us,″ Moraes said.

In the ongoing dispute over export subsidies that both countries have paid to their regional jetmakers Embraer SA of Brazil and Bombardier Inc. of Canada, the World Trade Organization awarded Canada the right to impose some trade sanctions on Brazil.

Canada has prepared a list for sanctions, starting with Brazilian steel, but has held off imposing the sanctions. It surprised Brazil two weeks ago by announcing it would help Bombardier finance about 75 percent of a potential $2 billion order from a Wisconsin-based affiliate of United Airlines.

The government here considered that a unilateral sanction that had nothing to do with the WTO ruling and took the case back to the Geneva-based organization Monday. The case is expected to be discussed Feb. 1.

Brazil says it has already brought its export subsidies in line with WTO demands.

Update hourly