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

Author

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  • Lakatos, Csilla
  • Walmsley, Terrie L.

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.

Suggested Citation

  • Lakatos, Csilla & Walmsley, Terrie L., 2011. "Dispute Settlement at the WTO: Impacts of a No Deal in the US-Brazil Cotton Dispute," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103380, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea11:103380
    DOI: 10.22004/ag.econ.103380
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    Cited by:

    1. Amanda M Countryman & Alessandro Bonanno, 2020. "A COOL Tale: Economic Effects of the U.S. Mandatory Country of Origin Labeling Repeal," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(4), pages 888-912, December.

    More about this item

    Keywords

    International Relations/Trade;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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