U.S. agriculture subsidies are again threatening American leadership on free trade. The Financial Times reports:

Brazil is preparing to take action against the US over what it says are illegal subsidies and other trade barriers following the collapse of the Doha round of talks at the World Trade Organisation in Geneva last week.

In June the WTO upheld a complaint by Brazil that Washington had not done enough to remove illegal subsidies to its cotton farmers, opening the way for Brazil to request WTO authorization for more than $1 billion in retaliatory sanctions on US services and intellectual property.

In addition to retaliatory measures on US cotton subsidies, Brazil would prepare legal action against US import tariffs on Brazilian ethanol of 54 cents a gallon … Brazil previously opted not to retaliate against US cotton subsidies in the hope that a successful conclusion to the Doha round would produce across-the-board reductions in US subsidies that affect Brazilian exports of cotton, ethanol and other farm produce.