UPDATE 1-Brazil suspends retaliation after US concession

* Brazil delays tariffs on US goods for 2 months

* US agrees to create “assistance” fund of $147 mln/year
(Updates with USDA statement, paragraphs 3-5)

BRASILIA, April 20 (BestGrowthStock) – Brazil delayed for another
60 days trade retaliation against the United States in an
attempt to solve a long-standing dispute over U.S. cotton aid,
a spokesman for the Foreign Ministry said on Tuesday.

The move comes after the U.S. government met the last of
three conditions Brazil had set for suspending import duties on
U.S. goods.

Washington will give Brazil about $147.3 million per year
in damages to be used for a “technical assistance” fund to
benefit farmers.

The fund may also be used to support the cotton sector in
in countries in sub-Saharan Africa and in Haiti, the U.S.
Department of Agriculture said in a statement on the agreement
with Brazil.

“The fund is scheduled to continue until the next Farm Bill
or a mutually agreed solution to the Cotton dispute is
reached,” the statement said.

“During the next 60 days, the United States and Brazil will
continue their work by negotiating a framework for reaching a
mutually agreed solution to resolve the Cotton dispute,” the
USDA said.

Previously the United States had agreed to make some
short-term tweaks to its export credit guarantees and to reduce
barriers to pork and beef imports from Brazil.

Brazil was set to impose tariffs and lift intellectual
property right protections on $829 million of U.S. goods, which
would have been its right after a 2009 World Trade Organization
ruling against U.S. cotton subsidies.

Earlier this month it suspended the measures for two weeks
to try to reach an agreement.

Over the next two months Brazil and the United States will
attempt to hammer out the details to an agreement they have
reached in principle.

Brazilian President Luiz Inacio Lula da Silva has already
celebrated the accord as a done deal.

“Thank God, we reached an accord and cotton will lose
subsidies and poor countries of Africa like Benin … will be
able to live more comfortably and export cotton to the world
market,” Lula said during a ceremony in the capital Brasilia.

Diplomats, trade experts and business leaders are closely
watching the case, one of a few in which the World Trade
Organization has allowed the wronged party to retaliate against
a sector not directly involved in a dispute. Brazil would be
the first country to apply cross-retaliation under WTO rules.
Investment Research

(Reporting by Raymond Colitt in Brasilia; additional
reporting by JoAnne Allen in Washington; Editing by Cynthia
Osterman and Eric Beech)

UPDATE 1-Brazil suspends retaliation after US concession