Stretching the Dispute Settlement Understanding: U.S.—Cotton’s Relaxed Interpretation of Cross-Retaliation in the World Trade Organization

By: David J. Townsend


In August 2009, the World Trade Organization (“WTO”) au-thorized Brazil to impose sanctions against the United States for its continued subsidization of cotton producers 1 in violation of the WTO Agreement on Subsidies and Countervailing Measures (“SCM Agrement”) 2 and the Agreement on Agriculture. 3 The WTO approved Bra- zil’s use of sanctions outside the General Agreement on Tariffs and Trade (“GATT”), 4 authorizing cross-retaliation against rights owed to the United States under the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”). 5 This is the third case of cross- retaliation authorized by a WTO arbitrator 6 under the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU).


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