G/ADP/Q1/BRA/38  
G/SCM/Q1/BRA/38  
G/SG/Q1/BRA/7  
 
26 April 2018 
(18-2618) Page: 1/2 
Comm ittee on Anti -Dumping Practices  
Committee on Subsidies and Countervailing Measures 
Committee on Safeguards                  Original: English  
 
  
NOTIFICATION OF LAWS AND REGULATIONS UNDER  
ARTICLES 18.5, 32.6  AND 12.6 OF THE AGREEMENTS  
REPLIES TO QUESTIONS POSED BY M EXICO1 REGARDING  
THE NOTIFICATION OF BRAZ IL2 
The following c ommunication, dated 25  April 2018 , is being circulated at the requ est of the 
delegation of Brazil.  
 
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Question  1 
 
Decree No. 9.107  of 26 July  2017 provides for the time -limits and the requirements 
applicable to fragmented industries in the context of trade remedies investigations.  
 
It appears that a number of factors are taken into consideration when determining 
whether an industry is fragmented, including the number of producers (which must be 
large), the extent to which national production  is diffuse , and the distribution by size of 
the national producers concerned . We have a number of questions in this regard : 
 
1. According to Brazil, what  other factors could influence the determination of 
whether or  not an industry is fragmented ? 
 
Reply  
 
In addition to examining the number of domestic producers of the like product, their distribution 
by size and the level of dispersion of the domestic production of the like product, other factors that 
may be taken into account in order to determine whether  the national production of the product 
concerned is a fragmented industry are those brought to the consideration of the investigating 
authority by the sector or petitioners in each case. In this sense, Decree No. 9.107, of 
26 July 2017 reflects the factor s that the investigating authority deems necessary in order to 
determine a finding of fragmented industry, but it does not prevent other factors from being 
considered as long as those provided for in the legislation are present.  
 
2. How do the three factor s mentioned (number of producers, extent to which 
production is diffuse and distribution by size of producers) interact ? 
 
Reply  
 
First, it is important to confirm that the number of producers is high enough in order to allow a 
finding of fragmented industry. Once that is confirmed, it is necessary to evaluate the distribution 
of the producers by size, since there might be several sm all firms representing a small percentage 
of the domestic production of the like product along with one or two larger companies representing 
a major proportion of such production. Regarding the level of dispersion of the production, it is 
                                                
1 G/ADP/Q1/BRA/36 -G/SCM /Q1/BRA/36 -G/SG/ Q1/BRA/ 5. 
2 G/ADP/N/1/ BRA/3/Suppl.9 -G/SCM/N/1/ BRA/2 /Suppl.1 2-G/SG/N/1/BRA/3/Suppl.3.  G/ADP/Q1/BRA/38 • G/SCM/Q1/BRA/38 • G/SG/Q1/BRA/7  
 
- 2 - 
 
  important to know  whether producers are concentrated in a specific region of the Brazilian territory 
or whether they are scattered across the country as geographical concentration may affect data 
collection.  
 
3. Has Brazil already initiated an investigation  in which it has  been  determined that 
the industry concerned is a fragmented industry in accordance with the above -
mentioned Decree? If so, could Brazil say approximately how many companies 
made up this industry and how the analysis was carried out taking into account 
this number of companies, the extent to which national production is diffuse , and 
the distribution by size of the producers ? 
 
Reply  
 
Brazil has initiated one sunset r eview (milk powder – EU and New Zealand) following an 
application from a fragmented industry.  In such case, the three factors m entioned in 
Decree  No 9.107, of  2017, were analyzed. As a general note, we can mention that there were 
more than one million producers of the like product in Brazil and that they were located all across 
Brazil 's territory.  Also, one of the studies which served as a basis for the initial injury analysis 
carried out by DECOM showed producers of all sizes, ranging from subsistence to intensive 
producers. The analysis carried out for the purposes of initiating said review was m ade public in 
item 4 of the Annex of Ordinance SECEX No 7, of 5 February 2018.  
However, this review did not take advantage of the flexibilities established by the aforementioned 
Decree.  
 
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