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The International Trade Law Review Law Business Research Editors Folkert Graafsma, Joris Cornelis and Konstantinos Adamantopoulos
The InternationalTrade Law Review
The International
Trade Law Review
Law Business Research
Editors
Folkert Graafsma, Joris Cornelis andKonstantinos Adamantopoulos
The InternationalTrade Law Review
The International Trade Law ReviewReproduced with permission from Law Business Research Ltd.
This article was first published in The International Trade Law Review - Edition 1(published in October 2015 – editors Folkert Graafsma, Joris Cornelis and
Konstantinos Adamantopoulos)
For further information please [email protected]
The International
Trade Law Review
EditorsFolkert Graafsma, Joris Cornelis and
Konstantinos Adamantopoulos
Law Business Research Ltd
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i
The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book:
DUA ASSOCIATES
HOLMAN FENWICK WILLAN
KING & SPALDING LLP
PINHEIRO NETO ADVOGADOS
TRADE RESOURCES COMPANY
VAN BAEL & BELLIS
VÁZQUEZ TERCERO & ZEPEDA
WIENER-SOTO-CAPARRÓS
ACKNOWLEDGEMENTS
iii
Editors’ Preface ....................................................................................................vFolkert Graafsma, Joris Cornelis and Konstantinos Adamantopoulos
Chapter 1 WORLD TRADE ORGANIZATION ..................................... 1Philippe De Baere
Chapter 2 ARGENTINA .......................................................................... 14Alfredo A Bisero Paratz
Chapter 3 BRAZIL ................................................................................... 25Mauro Berenholc
Chapter 4 EURASIAN ECONOMIC UNION ...................................... 36Elena Kumashova and Joris Cornelis
Chapter 5 EUROPEAN UNION ............................................................. 48Folkert Graafsma and Elena Kumashova
Chapter 6 INDIA ..................................................................................... 60Shiraz Rajiv Patodia and Anusuya Sadhu Sinha
Chapter 7 MEXICO ................................................................................. 74Adrián Vázquez Benítez and Emilio Arteaga Vázquez
Chapter 8 TURKEY ................................................................................. 88Bulent R Hacioglu, Özlem Canbeldek and Tanil Akbaytogan
Chapter 9 UNITED STATES ................................................................ 100J Michael Taylor, Patrick J Togni, Joseph A Laroski Jr, Joshua M Snead, Clinton R Long and Elizabeth E Owerbach
CONTENTS
iv
Contents
Appendix 1 ABOUT THE AUTHORS .................................................... 115
Appendix 2 CONTRIBUTING LAW FIRMS’ CONTACT DETAILS .. 123
v
EDITORS’ PREFACE
Over the past decades, many international trade developments have made it into the news. The high-profile nature of some of these cases has caused them to attract worldwide attention and coverage. Products as diverse as solar panels, aeroplanes and bananas; countries ranging from China to Ecuador to Tanzania; disputes being litigated in NAFTA, ASEAN and the WTO – all these aspects are components of the eclectic nature of international trade. Part of this broad spectrum is formed by trade remedies and this book aims to provide those dealing with international trade and customs with a horizontal overview of the use of trade remedies in multiple jurisdictions.
Each chapter provides a contemporary overview of the most relevant legislation and recent developments relating to the main trade defence instruments, such as anti-dumping and subsidies. Each chapter will focus on a particular jurisdiction, including that of the WTO, and include discussions on particular trade investigations and disputes, the relevant legal frameworks and recent changes to trade regimes, the expected trends and upcoming changes and their effects within the world of international trade.
We hope this book will be useful in providing a practical, business-focused understanding of the present legal and regulatory environment in the field of international trade and customs law. We are indebted to all contributing authors without whom this book would have been impossible. The illustrious list of authors includes: Alfredo A Bisero Paratz (Argentina), Mauro Berenholc (Brazil), Shiraz Rajiv Patodia and Anusuya Sadhu Sinha (India), Adrián Vázquez Benítez and Emilio Arteaga Vázquez (Mexico), Elena Kumashova (Eurasian Economic Union), Bulent R Hacioglu, Özlem Canbeldek and Tanil Akbaytogan (Turkey), J Michael Taylor, Patrick J Togni, Joseph A Laroski Jr, Joshua M Snead, Clinton R Long and Elizabeth E Owerbach (United States) and last but not least, Philippe De Baere (WTO). These practitioners in the field have prepared their chapters on top of their regular daily workload, and we thank them all very much for their support and for their efforts to comply with the strict deadlines. Finally, we wish to express our special appreciation to Elena Kumashova for her invaluable assistance in preparing the manuscript for publication and Nick Barette for his support and patience.
Folkert Graafsma, Joris Cornelis and Konstantinos AdamantopoulosHolman Fenwick WillanBrusselsOctober 2015
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Chapter 3
BRAZIL
Mauro Berenholc1
I OVERVIEW OF TRADE REMEDIES
Brazil was one of the founding members of the General Agreement on Tariffs and Trade (GATT) in 1947 and is a signatory to the World Trade Organization agreements, which are fully enforceable in Brazil.
In the wake of the Brazilian economic growth during the past decade, Brazil has strengthened its trade defence policy. Today, as the largest economy in Latin America and the eighth-largest economy in the world in terms of gross domestic product (GDP),2 Brazil is one of the top users of trade remedies among the WTO members.3
The prevention of international trade distortions and unfair trade practices in Brazil is based on three main pillars: anti-dumping duties, countervailing duties and safeguard measures.
The first references to anti-dumping duties, countervailing duties and safeguard measures were added to the Brazilian legal system by means of Law 313 of 1948, which incorporated GATT into the Brazilian legal system. However, it was only in 1987, when Brazil approved the GATT Anti-dumping Agreement, the GATT Agreement on Subsidies and Countervailing Measures and the Decision on Safeguard Action for Development Purposes, that such mechanisms began to be effectively used in Brazil.4
1 Mauro Berenholc is a partner at Pinheiro Neto Advogados.2 http://money.cnn.com/news/economy/world_economies_gdp/.3 http://i-tip.wto.org/goods/Forms/MemberView.aspx?mode=modify&action=search.4 www.desenvolvimento.gov.br/sitio/interna/interna.php?area=5&menu=4324.
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Between 1988 and 2014, 544 anti-dumping investigations were carried out in Brazil, 296 of which resulted in anti-dumping duties and 19 in price undertakings.5 In the same period, there were 23 subsidies investigations, with 10 countervailing duties imposed. With regard to safeguards, eight investigations were initiated and six safeguard measures were implemented.
Most of the above-mentioned measures were targeted at China, which is currently subject to 46 of them. China is followed by the United States (12 measures) and South Korea (nine measures). As for products, rubber and plastic are the most affected by the imposition of trade defence remedies, with 26.3 per cent of measures in relation to said products, plus 21.9 per cent in relation to metals and 19.8 per cent to chemicals.6
The proceedings for investigation and application of anti-dumping duties, countervailing duties and safeguard measures – albeit based on different pieces of legislation – are very similar and can be divided into four main phases: analysis of the written submission; evidence and defence; preliminary determination; and final decision.
Usually, a written submission is made by the domestic industry to the Department of Trade Defence (DECOM), a branch of the Foreign Trade Office (SECEX) of the Ministry of Development, Industry and Foreign Trade (MDIC). If the submission is accepted, the known interested parties receive a questionnaire from DECOM, which must be answered within 30 days (extendable for another 30 days if necessary). Interested parties may also present evidence and written submissions to demonstrate that the alleged trade distortion either does not exist or is not linked to the damage actually or purportedly caused to the domestic industry.
If (1) there is a preliminary determination confirming the existence of dumping or use of subsidies, or else of an increase in imports of a certain product that has caused or may cause serious damage to the domestic industry, and (2) these measures are necessary to stall the increasing damage during the investigation procedure, the Brazilian authorities may apply provisional anti-dumping duties, countervailing duties or safeguard measures. The provisional measures cannot last for a period longer than four months, or six months in special instances. After this preliminary determination, exporters may propose a price undertaking, which will, however, be subject to formal acceptance by the Brazilian authorities.
Brazilian authorities normally carry out site visits to the exporting companies under investigation to verify the information provided in the questionnaires. For the final phase, a public hearing will be held, where a ‘technical note’ with a summary of the main elements considered by DECOM will be distributed to the interested parties. Finally, DECOM prepares a report indicating its findings and whether or not the trade defence measure should apply. If the report finds against application of the measure,
5 Relatório DECOM 2014, pp. 18–53; www.desenvolvimento.gov.br/arquivos/dwnl_1421324058.pdf.
6 Id., p. 54.
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the investigation is closed; if it is for application, then the report is submitted to the Brazilian Chamber of Foreign Trade (CAMEX),7 which will then issue a final decision on the matter.
Since 2011, the Department of International Negotiations (DEINT) of SECEX is also entitled to carry out site visits to exporting and manufacturing companies abroad whose products are already subject to trade remedies (or other non-preferential instruments of trade policy) to verify the actual origin of products imported into Brazil. If the origin is false, Brazil may prohibit the issuance of import licences for the investigated product and consequently prohibit the product imports de facto. Under the same purview, Brazil has also authorised the domestic industry to request investigations against circumvention practices that frustrate the trade defence measures in force.
Besides the aforementioned rules on trade remedies, there are also some relevant customs laws that play a substantive role in Brazil’s foreign trade scenario (mainly on imports into the country), as briefly described below.
To qualify for imports into Brazil, companies and individuals must register with the Integrated Foreign Trade System (SISCOMEX), an electronic database system for registration, monitoring and control of foreign trade operations. Said registration involves the presentation of an extensive amount of documents to the Brazilian Federal Revenue Office (RFB) to enrol the individual and corporate applicants with the Customs Registration and Tracking System (RADAR), which, among others, will allow the tax and customs authorities to analyse the importer or exporter’s economic capacity and tax history.
Further, imported goods must be classified based on the MERCOSUR Common Nomenclature (NCM), which is adopted by all MERCOSUR member states. The NCM tariff codes are made up of eight digits and are based on the Harmonized Commodity Description and Coding System (the Harmonized System), the standard international system for classification of goods. Accurate classification of goods must take into account the Harmonized System Rules of Interpretation, and is essential to clear goods at customs and avoid being penalised by the customs authorities, as well as to ensure access to the tariff benefits provided in Brazil’s trade agreements.
After adequate classification, importers must verify whether said goods are subject to import licences and, if so, prior authorisation (i.e., before goods are shipped abroad) is required by law from specific federal bodies. In addition, importers must check whether other specific conditions apply – among which are 318 sanitary and phytosanitary measures, as well as 100 technical barriers to trade currently in force.8
7 CAMEX is a federal administrative body, responsible for formulating, adopting, implementing and coordinating policies and activities related to the foreign trade of goods and services, including tourism. It is composed of the following Ministers of State: 1) Development, Industry and Trade; (2) Chief of Staff; (3) Foreign Affairs; (4) Finance; (5) Agriculture, Livestock and Food Supply; (6) Planning and Budget; and (7) Land Development.
8 https://i-tip.wto.org/goods/Forms/MemberView.aspx?data=default.
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Although Brazil does exercise control over its exports, there are only a few rules covering this matter. Law 9,112 of 1995 defines those goods viewed as ‘sensitive’ (such as goods for use in the nuclear, chemical and biological areas)9 and thus subject to export control. Following resolutions issued by the Security Council of the United Nations, Brazil has also enacted decrees along with SECEX Ordinance 23 of 2011, which contains a list of countries (e.g., Iran, Democratic People’s Republic of Korea) to which certain products (mainly weapons and ordnance) cannot be exported.
II LEGAL FRAMEWORK
Brazil’s trade defence legislation is firmly based on the WTO agreements and does not differ greatly from them.
In 1994, the Brazilian Congress approved Decree 1,355, which contains the Uruguay Round Agreements and incorporates the new WTO agreements (e.g., the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement), the Agreement on Subsidies and Countervailing Measures, and the Agreement on Safeguards) into the Brazilian legal system.
In addition to Decree 1,355 of 1994, the Brazilian legislation on trade defence is mainly composed of Law 9,019 of 1995, which provides for the imposition of anti-dumping duties and countervailing measures; Decree 8,058 of 2013 and Decree 1,751 of 1995, which regulate the administrative proceedings for imposition of anti-dumping and countervailing duties, respectively; and Decree 1,488 of 1995, which regulates the administrative proceedings for the imposition of safeguard measures.
To improve its legal framework and ensure the use of these trade defence instruments, CAMEX issued Resolution 63 of 2010, extending the imposition of anti-dumping and countervailing measures in force to imports from third countries not involved in the original investigation, as well as to parts and assemblies of those goods subject to said measures, when circumvention practices were involved.
Moreover, Law 12,546 of 2011, CAMEX Resolution 80 of 2010, SECEX Ordinance 39 of 2010 and SECEX/RFB Ordinance 2,270 of 2012 provide for investigation into the origin of goods subject to an import licence for implementation of non-preferential instruments, notably in favour of ensuring the effectiveness of trade remedies in force.
This modernisation of Brazil’s trade defence legislation also gave rise to CAMEX Resolution 13 of 2012 and CAMEX Resolution 50 of 2012, which provide for an administrative proceeding to analyse the suspension or modification of current trade remedies in the public interest.
9 Brazil is a member of the Missile Technology Control Regime and of the United Nations’ Nuclear Supplier Group, as well as a signatory of the Chemical Weapons Convention and of the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction.
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With regard to customs legislation, Decree 6,759 of 2009 introduced the Brazilian Customs Regulations and on 14 July 2011, Brazil issued SECEX Ordinance 23 of 2011, which unified SECEX’s rules on administrative proceedings for import and export transactions in Brazil.
Sanitary and phytosanitary measures and technical regulations and standards, in turn, are set forth by a plethora of legal instruments issued mainly by the National Public Health Agency and the National Institute of Metrology, Standardisation and Industrial Quality, which vary according to the type of product to be imported.
III TREATY FRAMEWORK
Brazil is currently a signatory to 22 free trade and preferential trade agreements, 19 of which are already in force (17 of these being with Latin American countries).10
In 1980, Brazil signed the Montevideo Treaty together with Argentina, Bolivia, Chile, Colombia, Cuba, Ecuador, Mexico, Panama, Paraguay, Peru, Uruguay and Venezuela to create the Latin American Integration Association. This bloc aimed at promoting the economic and social development of the region through an integration process, gradually creating a common Latin American market; this common market, however, never took place. The bloc’s main feature is the reciprocal granting of regional tariff preferences in the intra-bloc trade of products originating in the member states. It also fosters the execution of bilateral and plurilateral agreements among its member states.
In 1991, Brazil also became a signatory to the Agreement for Economic Complementation 18 (ACE 18) together with Argentina, Paraguay and Uruguay, thereby creating the Southern Common Market (MERCOSUR), a subregional bloc primarily intended to promote free trade and movement of goods, people and currency. Venezuela joined MERCOSUR in 2012 and Bolivia is in the process of joining the bloc, both as full member states. Chile, Peru, Colombia, Ecuador, Guyana and Suriname are associated states. MERCOSUR is the fourth-largest trading bloc after the European Union, the North American Free Trade Agreement, and the Association of South East Asian Nations, with a collective GDP of US$3.2 trillion.11
In 2010, MERCOSUR relaunched negotiations with the European Union for a free trade agreement. According to MDIC, said negotiations have focused on market access, trade defence instruments, dispute resolutions, investments, services, sanitary and phytosanitary measures, technical barriers to trade and competition measures. Since then, nine rounds of negotiations have taken place, leading to progress in the drafting of a normative framework for the future agreement.12
MERCOSUR has also developed trade defence measures for imports from both member states and non-member states. Under Decisions 13 and 14 issued by the Council for the Common Market (CMC) in 2002, MERCOSUR adopted the WTO Anti-dumping Agreement, the Agreement on Subsidies and Countervailing Measures
10 www.mdic.gov.br/sitio/interna/interna.php?area=5&menu=405.11 www.itamaraty.gov.br/images/.../Fact_Sheet_Mercosur_English.pdf.12 http://europa.eu/rapid/press-release_MEMO-14-122_en.htm?locale=EN.
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and the Agreement on Safeguards. Safeguard measures, however, may not be imposed by member states against each other. In addition, according to the Protocol of Olivos, which regulates the bloc’s dispute settlement system, member states can choose to bring disputes either before the MERCOSUR dispute settlement system or before the WTO, but cannot grant jurisdiction to both forums.
Brazil also concluded a Trade Facilitation Memorandum with the United States13 on 19 March 2015, setting forth steps to harmonise technical regulations and standards related to the trade between the two countries.14
Brazil is also currently in the process of ratifying the Agreement on Trade Facilitation at the WTO, which aims at expediting the movement, release and clearance of goods, including goods in transit. This agreement will enter into force once it is ratified by two-thirds of the WTO members.15
IV RECENT CHANGES TO THE REGIME
As briefly described above, Decree 8,058 of 2013 approved the new administrative proceedings for investigation and imposition of anti-dumping duties. Under the new rules, preliminary determinations became mandatory and the time frame for their issuance was reduced by half (from 240 days to 120 days). Further, the whole investigation proceeding cannot exceed 10 months, subject to very few exceptions. These changes not only sped up the proceedings, but also streamlined the imposition of provisional measures.
The most notable change in anti-dumping proceedings, however, relates to the incorporation of rules regarding circumvention practices intended to hinder the effects of anti-dumping duties in force. Under Decree 8,058 of 2013, anti-dumping measures may be extended to: (1) imported parts and assemblies containing goods that are subject to anti-dumping duties, for further manufacturing in Brazil; (2) goods imported from third countries where they were manufactured out of parts and assemblies from countries that are subject to anti-dumping measures; and (3) imported goods from countries subject to anti-dumping duties and containing marginal modifications in relation to the actual goods to which the anti-dumping measures were applied.
Decree 8,058 of 2013 also establishes a scope review mechanism, by which the manufacturer or exporter of a certain product subject to an anti-dumping duty may
13 www.brasil.gov.br/economia-e-emprego/2015/03/brasil-e-eua-firmam-acordos-ineditos-de-comercio-bilateral.
14 Please note that pursuant to the CMC Decision 32/2000, MERCOSUR member states cannot negotiate commercial agreements regarding preferential tariffs outside the scope of MERCOSUR (www.sice.oas.org/trade/mrcsrs/decisions/dec3200s.asp).
15 Hong Kong, Singapore, United States of America, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, Korea, Nicaragua, Niger, Belize and Switzerland have already ratified the Agreement (https://www.wto.org/english/tratop_e/tradfa_e/tradfa_agreeacc_e.htm).
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apply for review of the existing measure to determine its own dumping margin, provided that such a manufacturer or exporter has not exported to Brazil during the respective dumping investigations.
In addition to the new anti-dumping regulation, SECEX Ordinance 38 of 2015 and SECEX Ordinance 58 of 2015 have recently changed the Brazilian trade defence mechanisms to be more efficient and to simplify the trade remedy proceedings.
SECEX Ordinance 38 of 2015 regulates the special process for non-preferential origin verification, where DEINT – on its own initiative or based on a complaint by interested parties – selects the import licences for the implementation of non-preferential instruments (especially the ones related to trade remedies in force) that will be subject to a special process for verification of the actual origin of imported goods. This new regulation sets a tighter deadline for investigations; includes the complainant as an interested party in the proceedings; extends the possible investigation to other manufacturers of those goods under inspection; and harmonises said proceedings and trade defence proceedings.
SECEX Ordinance 58 of 2015, for its part, implements the use of an electronic system (Digital DECOM System) for trade remedy investigations.
V SIGNIFICANT LEGAL AND PRACTICAL DEVELOPMENTS
Continuous use of circumvention practices to frustrate anti-dumping and countervailing measures in Brazil has led the Brazilian authorities to issue CAMEX Resolution 63 of 2010. Said resolution extended trade remedies to goods and their parts and assemblies originating from third countries upon evidence of circumvention practices to avoid the effective application of existing trade remedies.
Footwear imports from China to Brazil were the first test for such measures after enactment of CAMEX Resolution 63 of 2010. In 2008, the Brazilian authorities imposed anti-dumping duties on the imports of certain footwear from China. Notwithstanding the imposition of such duties, the domestic industry argued that footwear imports continued to grow. Thus, the domestic industry requested an investigation of circumvention practices, as footwear started being exported to Brazil from Vietnam and Indonesia allegedly using parts and assemblies originating from China, whereas parts and assemblies of such footwear were also being exported directly from China into Brazil. At the end of the investigation in 2012, the Brazilian authorities (1) decided to extend the anti-dumping duties then in force only to the imports of parts and assemblies originating in China, and (2) recognised the lack of circumvention practices on footwear exports to Brazil from Vietnam and Indonesia.16
Since then, seven other investigations concerning circumvention practices were initiated, six of which resulted in the imposition of anti-circumvention measures.17
16 CAMEX Resolution 42 of 3 July 2012.17 Relatório DECOM 2014, pp. 18–54 (www.desenvolvimento.gov.br/arquivos/
dwnl_1421324058.pdf ).
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Another significant development concerning international trade in Brazil was the issuance of Decree 7,545 of 2011, by which Brazil incorporated the World Customs Organization’s Convention on Temporary Admission (Istanbul Convention). This Convention harmonises and simplifies temporary admission procedures through the adoption of standardised international customs documents recognised by all signatories to the convention.
While Brazil has made a few reservations in relation to the Convention,18 the proceedings regarding concession of temporary admission regimes have been simplified by incorporation of the ATA carnet.
Article 1, Annex A of the Convention sets forth the ATA carnet, an international customs and temporary export-import document whose internationally valid security has been established by the national associations issuing them. The ATA carnet is the document most widely used by the business community for international operations involving temporary admission of goods, and it is used in Brazil for the following admissions: (1) goods for display or use at exhibitions, fairs, meetings or similar events; (2) professional equipment; (3) goods imported for educational, scientific or cultural purposes; (4) traveller’s personal effects; and (5) goods imported for sports purposes.
To further enhance its international trade Brazil has also signed the Agreement on Trade Facilitation at the WTO. Although this agreement has not yet been ratified, it has influenced two important developments in customs administration: the Brazilian authorised economic operator programme (AEO) and the Single Window19 system.
Both programmes aim at reducing the regulatory burden, facilitating procedures, improving transparency and strengthening security. Their objective is also to reduce inspections by enhancing risk-management systems, promote compliance, reduce transaction costs, and develop automated systems and technologies to improve information exchange between border authorities.20
The AEO draws on Article 7.7 of the Agreement on Trade Facilitation21 and is based on a three-year implementation plan, following international standards set out by the World Customs Organization’s SAFE Framework of Standards To Secure and Facilitate Global Trade. The first phase of the programme was carried out in 2014 and involved export flows and compliance with security requirements. The second phase
18 According to the Istanbul Convention, all operations covered by Annex A would be subject to simplified proceedings, especially with regard to rights to the issuance of guarantees covering import tax and duties of goods used in the production of other goods. However, the Brazilian Government chose to maintain its own proceedings, subjecting importers to several formalities.
19 Portal Único de Comércio Exterior.20 https://www.wto.org/english/tratop_e/tpr_e/g212_e.doc.21 Article 7.7: Trade Facilitation Measures for Authorized Operators. 7.1 Each Member shall
provide additional trade facilitation measures related to import, export or transit formalities and procedures, pursuant to paragraph 7.3, to operators who meet specified criteria, hereinafter called authorised operators.
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will be launched this year and will focus on customs compliance in the import flow. The final phase will concern the integration of government agencies and foreign trade control procedures.
Similarly, the Single Window programme set out in Article 10.4 of the Agreement on Trade Facilitation22 seeks to enable traders to submit documentation and information required for the import, export or transit of goods through a single entry point, by unifying all systems involved in said transactions.
VI TRADE DISPUTES
As one of the founding members of the GATT, Brazil has actively participated in GATT and WTO dispute settlements since its very first dispute, United States – Standards for Reformulated and Conventional Gasoline (DS2). To date, out of 456 WTO disputes Brazil has participated in 140: 27 as complainant, 16 as respondent, and 97 as a third party.23 Currently, out of the 24 cases Brazil is taking part in, two are as respondent and one as complainant, as briefly described below:
i Brazil – Certain Measures Concerning Taxation and Charges (DS472)
On 19 December 2013, the European Union requested consultations24 with Brazil with respect to six programmes concerning taxation and charges in the automotive sector (INOVAR-AUTO programme), the electronics and technology industry (Programme for Digital Inclusion, Support Programme for Technological Development of the Semiconductor Industry – PADIS, Support Programme for the Technological Development of the Digital TV – PATVD and Informatics Programme), goods produced in free trade zones, and tax advantages for exporters (Special Regime for the Purchase of Capital Goods for Exporting Enterprises – RECAP and Regime for Preponderantly Exporting Companies – PEC).
The European Union claims that those measures are inconsistent with:25
a Articles I:1, II:1(b), III:2, III:4 and III:5 of the GATT 1994;b Articles 3.1(a) and 3.1(b) of the Agreement on Subsidies and Countervailing
Measures; andc Articles 2.1 and 2.2 of the Agreement on Trade-Related Investment Measures.
Considering that consultations failed to settle the dispute, on 31 October 2014, the European Union requested the establishment of a panel to adjudicate the dispute. At its
22 Article 10.4: Formalities Connected With Importation and Exportation and Transit. (...) 4. Single Window. 4.1 Members shall endeavour to establish or maintain a single window, enabling traders to submit documentation or data requirements for importation, exportation or transit of goods through a single entry point to the participating authorities or agencies.
23 https://www.wto.org/english/thewto_e/countries_e/brazil_e.htm.24 In January 2014, Japan, Argentina and the United States requested to join the consultations.25 https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds472_e.htm.
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meeting on 18 November 2014, the Dispute Settlement Body accepted the establishment of a panel.26 On 30 June 2015, the European Union submitted its First Written Submission, and on 1 September 2015, Brazil submitted its First Written Submission.
ii Brazil – Certain Measures Concerning Taxation and Charges (DS497)
On 2 July 2015, Japan requested consultations with Brazil with respect to the same measures raised in the European Union’s complaint (DS472).27 Japan’s claims were also based on the same grounds as that of the European Union, which for its part requested to join the consultations on 16 July 2015.
iii Indonesia – Measures Concerning the Importation of Chicken Meat and Chicken Products (DS484)
On 16 October 2014, Brazil requested consultations28 with Indonesia concerning certain measures imposed by Indonesia on the importation of meat from fowl of the species Gallus domesticus and products from fowl of the species Gallus domesticus.
Brazil claims that those measures are inconsistent with:a Articles 2.2, 2.3, 3.1, 5, 5.1, 5.2, 5.5, 5.6, 8 and Annex C of the Agreement on
the Application of Sanitary and Phytosanitary Measures; b Articles 2.1, 2.2, 2.4, 5.1 and 5.2 of the Agreement on Technical Barriers to Trade;c Articles 4.2 and 14 of the Agreement on Agriculture;d Articles 1.3, 3.2, 3.3 of the Agreement on Importing Licensing Procedures;e Articles 2.1 and 2.15 of the Agreement on Preshipment Inspection; andf Articles III:4, X:1, X:3 and XI:1 of the GATT 1994.
With regard to MERCOSUR’s dispute settlement system, since the creation of its Arbitral Tribunal and of the Permanent Review Tribunal – which are responsible for settling disputes between MERCOSUR members – Brazil has been involved in six of the current 18 disputes. In five of those disputes Brazil was respondent, in one of them the complainant:29
a in 1999, Argentina commenced a dispute against Brazil’s use of subsidies in the production and exports of swine meat, which ended with a partially favourable decision for Argentina;
b in 2000, Brazil commenced a dispute against Argentina for establishing quotas for imports of textile products from Brazil, which ended with a favourable decision for Brazil;
26 Argentina, Australia, China, India, Japan, South Korea, Russia, Chinese Taipei, Turkey, the United States, Canada, Colombia and South Africa reserved their third-party rights.
27 https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds497_e.htm.28 https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds484_e.htm.29 The arbitral awards issued by the MERCOSUR’s Arbitral Tribunal and the Permanent Review
Tribunal can be found at www.tprmercosur.org/es/sol_contr_laudos_br.htm.
Brazil
35
c in 2001, Argentina commenced a dispute against Brazil for exporting poultry meat at injuriously dumped prices, which ended with a favourable decision for Argentina;
d in 2001, Uruguay commenced a dispute against Brazil for prohibiting the import of Uruguayan remoulded tyres, which ended with a favourable decision for Uruguay;
e in 2001, Argentina commenced a dispute against Brazil for creating barriers for the import of Argentinian phytosanitary products, and for not incorporating Common Market Group (GMC) Resolutions Nos. 48/96, 87/96, 149/96, 156/96 and 71/98 in its legal framework, which ended with a partially favourable decision for Argentina; and
f in 2004, Uruguay commenced a dispute against Brazil’s discriminatory and restrictive measures regarding tobacco and tobacco by-products, which ended with Brazil’s voluntary revocation of the aforementioned measures.
VII OUTLOOK
Traditionally, developed countries have been the most frequent users of trade defence mechanisms. Nevertheless, in the past few years Brazil has increasingly resorted to anti-dumping, countervailing and safeguard measures to protect its domestic industry. In fact, according to the WTO, Brazil is currently the fifth-biggest user of such measures in the world.30
From the Brazilian government’s perspective, this shift is mostly due to the extensive legal framework put in place to regulate the Brazilian trade defence system and ensure the application of fair, effective measures that are also consistent with WTO rules. Further, new regulations have been issued to simplify and expedite the proceedings. CAMEX has also rolled out principles and rules to be observed by government agencies with a view to improving trade procedures, creating a more favourable environment and expediting trade in goods.
Local businesses have also increased their use of trade defence instruments to control and mitigate trade distortions in their markets. Similarly, Brazilian exporters involved in trade remedy cases abroad are acquiring more knowledge in international rules and moving more daringly to the spotlight to preserve their existing markets or conquer new ones.
30 https://i-tip.wto.org/goods/Forms/MemberView.aspx?data=default.
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Appendix 1
ABOUT THE AUTHORS
MAURO BERENHOLCPinheiro Neto AdvogadosMauro Berenholc has been a partner in the São Paulo office of Pinheiro Neto Advogados since 2000. He co-heads the firm’s international trade practice. He counsels and represents Brazilian and foreign companies, trade associations and governments, and his practice focuses on international trade, trade remedies disputes, tax and customs advice, and litigation before the superior administrative and judicial courts in Brazil.
Mauro features regularly in the international trade and tax rankings of the leading Bar publications, such as Chambers and Partners, Latin Lawyer, Who’s Who Legal, The Legal 500 – Latin America and Análise Advocacia. Mauro is also a frequent speaker at seminars and conferences in Brazil and abroad on international trade, customs and tax law matters.
Mauro received an LLB degree from the University of São Paulo (USP) Law School in 1989 and an LLM from the University of Kent, United Kingdom in 1994. Mauro was chairman of the international trade and customs law committee of the International Bar Association between 2012 and 2013 and is still active in IBA activities. He is also a former member of the board of the foreign trade and international relations committee of the Brazilian Bar Association, São Paulo Section (OAB/SP). Mauro is fluent in Portuguese, English and Spanish.
PINHEIRO NETO ADVOGADOSRua Hungria, 110001455-906 São PauloBrazilTel: +55 11 3247 8614Fax: +55 11 3247 [email protected]
