TRADE POLICY REVIEW: BRAZIL
29 November and 1 December 2004

Concluding remarks by the Chairperson


See also:
> Press release: Brazil continues to liberalize; further steps would benefit the economy and world trade


This fourth Trade Policy Review of Brazil has provided the opportunity for a fruitful dialogue between Brazil and other WTO Members. We have greatly benefited from the comprehensive engagement of the Brazilian delegation, led by Ambassador Tarrag˘, and by the insightful comments of our discussant, Ambassador Spencer. While noting that Brazil had been affected by adverse domestic and external developments during the period under Review, Members recognized and welcomed Brazil's continuing reforms. These had resulted in primary fiscal surpluses, decreased inflation and increased resilience to shocks. Members noted that growth had resumed, largely triggered by increased and diversified exports to non-traditional markets.

Members were greatly appreciative of Brazil's active participation in the WTO, of its commitment to trade liberalization and of the role played by Brazil in advancing the DDA. However, several Members noted that Brazil had not participated in the negotiations on ITA and had to date not ratified the Fourth and Fifth Protocols to the GATS. Brazil's active involvement in WTO dispute settlement procedures was noted, as were its efforts to enhance south-south cooperation. Several Members also referred to the growing number of preferential trade agreements recently negotiated or currently under negotiation by Brazil, and expressed their hope that such initiatives would be supportive of efforts at the multilateral level. Questions were raised with respect to the timetable for completion of the MERCOSUR integration process.

Members pointed out the importance of investment, particularly foreign direct investment, for Brazil's future growth prospects, but expressed some concern with respect to remaining restrictions to foreign participation. Members posed questions on the decision by the Executive to withdraw all bilateral investment agreements from consideration for ratification by Congress.

Members agreed that Brazil's trade regime had become more open and transparent during the period under review, but many noted that market access barriers persist in a few but important areas. Brazil's applied tariff had declined since the last Review in 2000 but escalation and some peaks remained; Members also noted that reducing the still large gap between applied and bound rates would enhance the predictability of its trade regime. Concerns were expressed about the range and complexity of non-tariff charges on imports, both at the state and at the federal levels. Members observed that Brazil's import licensing regime had been streamlined, but highlighted the still large number of products subject to non-automatic licensing requirements. Brazil's continued active use of contingency measures was a source of concern for some Members, and Brazil was invited to exercise restraint in their use. Questions were posed on other measures like customs procedures, technical regulations, and SPS requirements.

Members sought clarification with respect to the rationale for maintaining a mail-order regime and for export taxes, and expressed concern about domestic content and other requirements for accessing the wide range of Brazil's support programmes. Members also noted that several of Brazil's manufacturing industries had become internationally competitive but questioned the use of tariff escalation and other support in some industries. Brazil was urged to make a significant contribution in the ongoing NAMA negotiations.

Discussions on services focused mainly on the telecommunications, maritime transport, and on financial and professional services. Members queried Brazil's legal provisions allowing the Executive to decide on foreign participation in financial services and telecommunications. Brazil was also encouraged to enhance its GATS commitments and make a substantial contribution in the services negotiations.

In conclusion, this Review has confirmed Brazil's progress towards greater transparency in, and liberalization of its trade and investment regime. The export-led recovery experienced over the last year provides concrete evidence of the benefits of Brazil's closer integration in the global economy. However, to ensure the sustainability of the gains already achieved, and translate them into higher living standards, further reforms are needed to reduce the market access barriers and internal inefficiencies that still create uncertainty for traders and investors, rise production costs and lower consumer welfare. I am thus pleased to hear of the various steps being taken by the Brazilian authorities to address these issues. I am also heartened to hear that Brazil is striving for deeper integration in world trade, and that it will continue to play an active role in the WTO. Achieving both objectives would be greatly aided by Brazil enhancing its WTO commitments to a level commensurate with the major role it plays in the multilateral system and its ambitious negotiating agenda in areas such as agriculture.

I close this meeting by expressing again my appreciation for Brazil's constructive engagement in this Review, and for the numerous answers provided to the questions asked by Members. Members look forward to receiving written answers to outstanding questions. I also thank the discussant and the many Members whose participation helped make this exercise a success.