LETTER FROM AG MINISTER RODRIGUEZ REGARDING THE WTO

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