Brazil has announced a list of 222 American products that could suffer retaliation with tariff rates of more than 100 percent of their value when imported to Brazil. The first “retaliations” could be applied to US products in January 2010. The World Trade Organization (WTO) authorized Brazil to retaliate against products from the United States in the amount of $900mm to compensate for past illegal US agricultural subsidies.
Significantly, something called cross-retaliation (retaliation in a trade area other than the one in violation) is permissible under WTO rules and could be used to lower prices on patented pharmaceuticals. (During the long process of arbitration Brazil formally requested the freedom to choose other areas of retaliation, such as intellectual property rights.)
Nothing has actually happened yet, and the “cross-retaliation” couldn’t occur until the actual implementation of the “retaliation,” but it is something valuators of biotech and pharma IP should be aware of.