DS472: Brazil — Certain Measures concerning Taxation and Charges

Brazil rejected the first-time request for a panel by the European Union over this dispute. The EU said that the dispute concerned a number of programmes in the automobile, information and communication technology and automation sectors that granted domestic producers certain tax advantages consisting of the exemption from, or reduction of, taxes and charges levied on the sale of goods. The advantages resulted in a higher tax burden on imported goods and created incentives to source locally in Brazil and thus were discriminatory and aimed at import substitution. Brazil also had tax exemption schemes for Brazilian companies meeting certain export targets, contrary to the prohibition on export-contingent subsidies.

The EU was also concerned about the introduction of measures to cover economic sectors of major trade importance to the EU, such as the automotive sector. Consultations held could not resolve the dispute; hence the EU’s request for the establishment of a panel to examine this dispute.

Brazil said that its measures were consistent with its multilateral obligations. The programmes were aimed at promoting a paradigm shift in productivity and technological performance as well as fostering innovation and workforce capacity. They benefited directly, in a non-discriminatory manner, both domestic and foreign investment. They did not discriminate on the basis of origin nor were they contingent upon the use of domestic inputs or finished goods benefiting from the programmes. Brazil recalled that European companies also benefited from the programmes.

 

DS430: India — Measures Concerning the Importation of Certain Agricultural Products

India and the United States, noting that the dispute settlement system was facing a significant volume of disputes resulting in a backlog for the Appellate Body, made a joint request to the Dispute Settlement Body (DSB) to agree to provide additional time for the adoption or appeal of the panel report in this dispute.

India said it acknowledged the current strain on the Appellate Body and took seriously its responsibilities to cooperate to alleviate that strain. India added that it considered that the additional time would provide greater flexibility in scheduling any possible appeal of the panel report in this dispute. The US expressed its hope that members in similar circumstances would take the same constructive approach which would help the Appellate Body manage its workload. The DSB agreed that no later than 26 January 2015, it would adopt the report of the panel in the dispute unless either party to the dispute notifies the DSB of its decision to appeal it.

 

Status reports

Several members (US, EU, China, Thailand, Japan and the Philippines) submitted status reports or made statements concerning different disputes. A total of 19 members, including Cuba, expressed concern about the lack of resolution to the dispute between the United States and the European Union over the Section 211 Omnibus Appropriations Act of 1998 in the United States , the so-called Havana Club rum dispute (DS176).

 

Other business

Under “other business”, Australia made a statement regarding the “tobacco plain packaging” disputes (DS434, DS435, DS441, DS458, DS467). Australia said that the actions of Ukraine and Honduras in placing Australia’s plain packaging measure on the agenda of the Trade-related Aspects of Intellectual Property Rights (TRIPS) Council and of Ukraine placing it on the agenda of the Technical Barriers to Trade (TBT) Committee were not in accordance with the established rules and practices of either the TRIPS Council or the TBT Committee.

In Australia’s view, it was not appropriate for members to continue to raise items in WTO bodies when the measure at issue was already subject to dispute settlement proceedings. Such discussions appeared to be creating a parallel process alongside the ongoing dispute settlement proceedings. Australia said that, given that the matter was now under the DSB, it was a matter for the DSB to “inform the relevant WTO councils and committees of any developments in disputes related to provisions of the respective agreements”. Australia said that it would continue to defend its measure in any forum but considered that the appropriate forum for members to argue a case under consideration by a panel was before that panel.

Ukraine said that it looked forward to an expeditious resolution of this matter. Honduras said that while it took note of Australia’s concerns, as a member it had the right to raise any matter of interest to it in the TBT Committee and in the TRIPS Council. Honduras hoped that this matter would be resolved soon.

 

Next meeting

The next regular meeting of the DSB is scheduled for 17 December 2014. There will be a special meeting of the DSB on 28 November 2014.