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TRADE POLICY REVIEWS: SECOND PRESS RELEASE AND CHAIRPERSON'S  CONCLUSIONS

PRESS RELEASE
PRESS/TPRB/141
1 November 2000
Brazil: November 2000

The Trade Policy Review Body of the World Trade Organization (WTO) concluded its third review of Brazil's trade policies on 30 October and 1 November 2000. The text of the Chairperson's concluding remarks is attached as a summary of the salient points which emerged during the discussion.

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See also:

First press release
Summary of Secretariat report
  > Summary of Government report


TRADE POLICY REVIEW BODY: REVIEW OF BRAZIL
TPRB'S EVALUATION
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The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO member countries at regular periodic intervals to monitor significant trends and developments which may have an impact on the global trading system.

The review is based on two reports which are prepared respectively by the WTO Secretariat and the government under review and which cover all aspects of the country's trade policies, including its domestic laws and regulations, the institutional framework, bilateral, regional and other preferential agreements, the wider economic needs and the external environment. A record of the discussion and the Chairperson's summing-up together with these two reports will be published in due course at the complete trade policy review of Brazil and will be available from the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.

Since December 1989, the following reports have been completed: Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bahrain (2000) Bangladesh (1992 and 2000), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992, 1996 and 2000), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994, 1996 and 1998), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995), C˘te d’Ivoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995, 1997 and 2.000), Fiji (1997), Finland (1992), Ghana (1992), Guinea (1999), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993 and 1998), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995 and 1998), Kenya (1993 and 2000), Korea, Rep. of (1992, 1996 and 2000), Lesotho (1998), Macau (1994), Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway (1991, 1996 and 2000), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997), Peru (1994 and 2000), the Philippines (1993), Poland (1993), Romania (1992 and 1999), Senegal (1994), Singapore (1992, 1996 and 2000), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka(1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991 and 1996), Tanzania (2000), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996 and 1999), Uganda (1995), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).

TRADE POLICY REVIEW BODY:   REVIEW OF BRAZIL
CONCLUDING
REMARKS BY THE CHAIRPERSON Back to top

We have had an open, detailed and informative discussion of Brazil's trade policies and practices. Members were impressed by the resilience of the Brazilian economy and its rapid recovery from the financial crises in 1997 and 1998. They attributed this largely to sound macroeconomic policies and the liberalization pursued over the last decade, both unilaterally and in the context of international agreements: greater exposure to competition from foreign goods and services has helped contain inflation, enhanced productivity and competitiveness and attracted investment. Members recognized that, as a result, Brazil has now moved unequivocally away from the import substitution model of earlier years.

Although the relative importance of trade in the Brazilian economy probably remains below its potential level, Members underlined Brazil's already significant role as a trader and investment destination. Members commended Brazil for its active participation in the multilateral trading system, with several welcoming its support for the launching of a new round of negotiations. Some Members, however, encouraged Brazil to help strengthen, and to take fuller advantage of, existing multilateral rules and disciplines by joining the GPA and ITA. Some Members also asked about Brazil's still pending ratifications of the Fourth and Fifth Protocol of the GATS.

Brazil's active involvement in preferential initiatives also attracted considerable interest. Mainly, Members sought information on current and future directions for MERCOSUR, particularly concerning the automotive and sugar regimes. They offered different views on MERCOSUR's meaning to third parties, some stressing the opportunities offered by a single large, regional market, and others raising questions about trade diversion.

Regarding Brazil's domestic trade regime, an important issue was the myriad laws and regulations governing trade, with the widespread use of provisional measures identified as a particular source of difficulty. There thus appear to be room for simplification in this area to render the trade regime more transparent, suggestions including the adoption of a single trade law as Brazil had considered in the past.

Members observed with concern that since Brazil's last Review in 1996 the average MFN tariff had risen to 13.7% as a result of the temporary three percentage points tariff increase; they took note of Brazil's reassurances that the increase would be eliminated at the end of this year. Members also observed that closing the often large gap between bound and applied rates would increase predictability for Brazil's trading partners. On certain applied rates apparently exceeding bound levels, the Brazilian delegation stated that all WTO tariff bindings were being fully respected.

Questions were also raised on non-tariff measures, many focusing on Brazil's customs valuation and the role of minimum prices, as well as on the non-automatic import licensing regime. The use of labelling and sanitary and phytosanitary measures also were queried. Brazil's frequent resort to anti-dumping measures was a concern, with some Members observing, however, Brazil's support for stricter multilateral disciplines in the application of such measures.

Members sought clarification on sector-specific support programmes, particularly for agriculture and manufacturing. It was observed that agricultural support, including to exports and credit provided under favourable terms, appeared modest, particularly relative to assistance levels in other producing areas. Nonetheless, even that support could affect world markets where Brazil is a major supplier, for example sugar and alcohol. Brazil is also a leading producer of automotive products; its special automotive regime having given rise to concerns earlier, the Brazilian delegation emphasized that all benefits provided to that industry had ceased at end 1999.

Additional details were also sought on a number of issues, including:

  • non-tariff import charges, including the Merchant Marine Renewal Tax;

  • the Law of Similars;

  • incentive programmes linked to local content requirements;

  • export promotion and financial assistance, particularly PROEX;

  • export taxes;

  • competition policy;

  • enforcement of intellectual property rights;

  • market access in the services sector.

Members expressed their appreciation of the written and oral responses provided by the delegation of Brazil to those and other questions during the meeting.

I feel that this Review has met the vision for the TPRM expressed by Ambassador Graša Lima in his opening statement, our discussion having enhanced transparency and understanding of Brazil's trade policies and practices through a collaborative quest. Members were appreciative of Brazil's efforts to implement wide ranging economic reforms and encouraged it to continue down this path. This will have to be buttressed no doubt by further improvements to the trade and investment regimes, especially to improve transparency and predictability. The Brazilian delegation reiterated its strong commitment to a rules based multilateral system, and I hope that Members will be able to support this commitment by extending open access for Brazilian exports.