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


  • Lakatos, Csilla
  • Walmsley, Terrie L.


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

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    References listed on IDEAS

    1. Haab, Timothy C. & McConnell, Kenneth E., 1997. "Referendum Models and Negative Willingness to Pay: Alternative Solutions," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 251-270, February.
    2. Tonsor, Glynn T. & Olynk, Nicole & Wolf, Christopher, 2009. "Consumer Preferences for Animal Welfare Attributes: The Case of Gestation Crates," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 41(03), pages 713-730, December.
    3. Ken Belcher & Andrea Germann & Josef Schmutz, 2007. "Beef with environmental and quality attributes: Preferences of environmental group and general population consumers in Saskatchewan, Canada," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 24(3), pages 333-342, September.
    4. Jayson L. Lusk & F. Bailey Norwood, 2009. "A Cautionary Note on the Design of Discrete Choice Experiments: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1064-1066.
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    More about this item


    dispute settlement; WTO; intellectual property; computable general equilibrium; International Relations/Trade; C68; F13; Q17;

    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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