The United States and Brazil are close to settling a decade-old trade dispute over cotton subsidies, Agriculture Minister Neri Geller told Reuters, in what would be the first concrete step to repair ties hurt by an espionage scandal. The Brazilian government plans to sign an agreement with U.S. Trade Representative Michael Froman, he said. It will resolve demands by Brazilian cotton producers who seek compensation for subsidies enjoyed by U.S. growers. “The accord is practically settled, but we need to finish some details before signing,” said Geller, who will travel to Washington with Foreign Minister Luiz Alberto Figueiredo. Relations between the United States and Brazil were strained last year by revelations the National Security Agency spied on President Dilma Rousseff with secret Internet surveillance programs made known in documents leaked by former NSA analyst Edward Snowden. Diplomatic talks on a wide range of subjects - from double taxation to visas aimed at facilitating business between the Western Hemisphere’s two largest economies - ground to a halt. Rousseff canceled a state visit to Washington and demanded an apology from President Barack Obama. The United States said publicly it regretted the incident, but has stopped short of issuing a formal apology. If finalized, the cotton breakthrough would come just days before Sunday’s presidential election in which Rousseff’s two main rivals have vowed to rebuild ties with Washington to open markets for exporters in a country hit by recession. In 2004, Brazil won a challenge against U.S. cotton subsidies at the World Trade Organization, giving it the right to impose $830 million in sanctions against U.S. products. Brazil agreed to suspend the penalty if the United States paid into an assistance fund for Brazilian cotton farmers. The United States stopped paying the monthly compensation in October due to budget disagreements in Congress, prompting the Brazilian government to threaten to slap higher tariffs on U.S. products. The retaliation would have deepened diplomatic tensions between both countries, officials and experts said at the time. The United States was willing to pay at least $460 million in compensation to Brazilian growers to end the dispute earlier this year, according to Brazilian diplomatic documents obtained by hackers and leaked to the local press. U.S. Vice President Joe Biden traveled to Brazil and met with Rousseff in June in hopes of turning the page on the spying dispute. He assured her that Washington has changed the way it conducts electronic surveillance. In another sign that relations are starting to move forward, Brasilia and Washington signed a tax information exchange pact last week that could lead to a tax treaty to avoid double taxation of U.S. companies operating in Brazil and Brazilian businesses in the United States. (Reuters)