G/L/1296  
G/SG/N/12/BRA/3  
 
19 February 2019  
(19-0953) Page: 1/6 
Council for Trade in Goods  
Committee on Safeguards  Original: English  
 
 IMMEDIATE NOTIFICATI ON UNDE R ARTICLE 12.5 OF TH E AGREEMENT  
ON SAFEGUARDS TO TH E COUNCIL FOR TRADE IN GOODS OF  
PROPOSED SUSP ENSION OF CONCESSION S AND OTHER  
OBLIGATIONS  REFERRED TO IN PARAGRAPH 2  
OF ARTICLE 8 OF THE AGREEMENT  
ON SAFEGUARDS  
BRAZIL 
The following communication, dated 18 February 2019, is being circulated at the request of the 
Delegation of Brazil . 
 
_______________  
 
 
Pursuant to Article 12.5 of the Agreement on Safeguards, and in accordance with the agreed format 
for notifications (G/S G/1, 1 July 1996; amende d 19 October 2009, 
G/SG/1/Rev.1  - G/SG/N/6/Rev.1  - G/SG/89), Brazil provides the immediate notification to the 
Council for Trade in Goods of the proposed suspension of concessions and other obligations referred 
to in paragraph 2 of Article 8.  
 
1. Which Member is proposing suspension of concessions and other obligations 
referred to in Article  8.2. 
 
Brazil.  
 
2. Specify the measure, the product subject to the measure, the WTO document that 
notified the safeguard measure, and the Member imposing the measure in relation to 
which the Member  is proposing suspension of concessions and other obligations referred 
to in Article  8.2. 
 
On the 1st of February of 2019, the European Commission published the Commission Implementing 
Regulation (EU) 201 9/159 of 31st of January of 2019 imposing definitive safeguard measures on 
imports of certain steel products. Such measures came into force on the 2nd of February of 2019 
and replaced the provisional measures in place since the 18th of July of 2018.  
 
Pursuant to Article 12.1(c) of the Agreement on Safeguards, the European Union notified to the 
WTO the publication of Commission Implementing Regulation (EU) 2019/159 on the 7th of February 
of 2019 (G/SG/N/11/EU/1/Suppl.2). On the 4th of January 2019, the Euro pean Union had 
submitted a notification on finding serious injury or threat thereof pursuant to Article 12.1(b) of 
the Agreement on Safeguards (G/SG/N/8/EU/1; G/SG/N/10/EU/1; G/SG/N/11/EU/1/Suppl.1).  
 
The product concerned is certain steel products belonging to 26 steel product categories listed in 
Annex I of the notification to the WTO under Article 12.1(c) submitted by the European Union 
(G/SG/N/11/EU/1/Suppl.2), ranging from CN Code 7208 10 00 to CN Code 7306 90 00.  
 
According to the notification submitted by the European Union, Brazil has been exempted from the 
application of the safeguard measures under certain product categories pursuant to Article 9 of the 
Agreement on Safeguards. However, the Eu ropean Union emphasized that the exclusion of the 
developing country Members of the WTO should apply as long as their share of Union imports does 
not exceed 3%, and the Commission will carry out an assessment of the situation on a regular G/L/1296 • G/SG/N/12/BRA/3  
 
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  basis in order to  examine whether any country has exceeded the above threshold and should 
eventually be included in the scope of the safeguard measures.  
 
According to Annex II.2 of the notification submitted by the European Union, imports originating 
in Brazil under produ ct categories 1, 2, 6, 7, 8, 17, and 24 will be subject to the tariff -rate quota 
(´TRQ´) established by the Commission Implementing Regulation (EU) 2019/159 of 31st of January 
of 2019 from the 2nd of February of 2019 until the 30th of June of 2021, subject  to an out -of-quota 
duty of 25 % (no safeguard measure applied within the limits of the quota). On July 1st, 2019, and 
on July 1st, 2020, respectively, the total amount of TRQs (both country -specific and global) per 
each product ca tegory will be increased by 5%.  
 
3. Describe the proposed suspension of concessions and other obligations referred to 
in Article 8.2, and the proposed date from which it will come into  effect.  
 
The proposed suspension of substantially equivalent concessions referred to in Article 8.2 of the 
Agreement on Safeguards will take the form of an increase in duties on selected products 
originating in the European Union.  
 
In this respect, Brazil notes that the imposition of the tariff -rate quota, subject to an out -of-quota 
duty of 25%, woul d result in an estimated impact of € 180,000,000.00 on Brazil 's exports to the 
European Union over the duration of the measure (from the 2nd of February of 2019 until the 30th 
of June of 2021).  
 
According to Article 8.2 of the Agreement on Safeguards, Braz il hereby notifies its intention to 
apply, within 30 days from the date of this notification, additional duties on imported products 
originating in the European Union as specified in Annex I . The calculation of the proposed 
suspension of concessions or oth er obligations under GATT 1994 is explained in Annex II . Since 
the proposed suspension is less than equivalent to the adverse effects of the safeguard measures 
applied by the European Union, Brazil reserves its right to include other products in the list s pecified 
in Annex I. Brazil will notify the Council for Trade in Goods of any such inclusion.  
 
Brazil reserves its right to withdraw, modify, supplement or replace this notification, and/or make 
further notifications, should it deem that appropriate, inclu ding in light of any subsequent 
developments. The suspension of concessions and other obligations will continue to apply until the 
European Union 's safeguard measures are lifted.  
  G/L/1296 • G/SG/N/12/BRA/3  
 
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  ANNEX I  
 
 
 
  
NCM Description  Additional duty  
04021010  Milk in powder, fat content<=1, 5%arsenic<5ppm, con/ad sug  15 
04021090  Other milk, cream, in powder, fat content<=1, 5% con/ad sug  15 
04022110  Integral milk, in powder, fat cont.>1, 5%, concen.n/sugar  15 
04022120  Semi-ski.milk, powder, fat content>1, 5%, concent.n/sugar  15 
04022910  Integral milk, powder, etc.fat cont>1, 5%, conc.added sugar  15 
04022920  Semi-skim.milk, powder, etc.fat cont>1, 5%, con.added sug  15 
24021000  Cigars, cheroots and cigarillos, containing tobacco  11 
24022000  Cigarettes containing tobacco  11 
24029000  Cigars/cheroots/cigarillos/cigarettes, of tobacco subst.  11 
71131100  Articles of jewellery, silver, wheter or n/plated/clad pr  10 
71131900  Articles of jewellery, silver, of oth.precious metal, etc  10 
71132000  Articles of jewellery, of base metal clad with prec.met.  10 
87031000  Motor vehicles desig.f/travel.on snow,golf cars,etc  19 
95044000  Playing cards  11 
95063100  Complete clubs for golf  11 
95063200  Balls for golf  11 
95063900  Other equipment for golf  11 
96140000  Pipes, cigarette holders and their parts  10 
07032090  Other fresh/chilled garlic  19 
42022220  Purses of textile materials  19 
42023100  Pockets articles/purses of natural leathers/reconst.etc  11 
42031000  Apparel of natural leather or composition  11 
42033000  Belts and bandoliers, etc.of natural leather/composit.  11 
64031900  Footwear for other sports, of leather  19 
64032000  Footwear of leather, with upper straps, etc  19 
64034000  Oth.footwear of leather, c/protective metal toecap  19 
64035190  Oth.footwear of leather and outer soles of leather, covering the 
ankle  19 
64035990  Oth.footwear of leather and outer soles of leather, covering the 
ankle  19 
64039190  Oth.footwear of leather and outer soles of leather, covering the 
ankle  19 
64039990  Other footwear of leather with outer soles of rubber or plastic  19 
90041000  Sunglasses  11 
94036000  Other wooden furniture  10 
95030021  Dolls activated by mechanism of rope or electric  19 
95030022  Other puppets, even dressed  19 
95030031  Filled toys repres.animals, no hum. criatu.  19 
95030097  Other toys with electric motor  19 G/L/1296 • G/SG/N/12/BRA/3  
 
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  ANNEX II  
The proposed suspension of substantially equivalent concessions or other obligations under 
GATT  1994 was calculated as follows. In order t o assess the amount of imports originating in Brazil 
affected by the tariff -rate quota established by the European Union, first a gravity model was used 
to estimate the exporter´s and importer´s GDP elasticities and the volume of trade expected during 
the period (from the 2nd of February of 2019 until  the 30th of June of 2021) for each one of the 
product categories exported by Brazil covered by the EU safeguard measures (product categories 1, 
2, 6, 7, 8, 17, and 24). Then, based on the average participation of the imports from Brazil within 
the total E uropean Union imports for each category and also based on the weighted -average export 
prices of 2018, the value of Brazilian exports that would be affected by the additional duty imposed 
by the safeguard measures would be € 90 million in 2019, € 60 million  in 2020 and € 30 million in 
2021 ( Table 1 ). 
 
The following equation was estimated:  
 
where:  
 
"X_ijt" is the exported value from country i to country j in year t;  
"GDP_it" is the exporter 's GDP in year t;  
"GDP_jt" is the importer 's GDP in year t;  
"G_ij" is a vector with the gravity variables (distance, common language, colonial ties and 
contiguity)  
"γ_i" is the exporter fixed -effect;  
"χ_j" is the importer fixed -effect;  
"θ_t" is the time fixed -effect.  
 
The total amount of € 180 million for the period from 2019 to 2021 was converted to US dollars, 
reaching a total of US$ 205.2 millions of exports from Brazil to the European Union that would be 
affected by the 25% additional duty imposed by the safeguard measures. The total amount of tariffs 
generated would b e equal to US$ 51.3 millions.  
 
Therefore, a suspension of trade concessions on the products in Annex I which does not exceed the 
amount that would result from the application of the EU measures to the imports of the steel 
originating in Brazil represents a n appropriate suspension of the application of substantially 
equivalent trade concessions in line with the Agreement on Safeguards.  
 
  
G/L/1296 • G/SG/N/12/BRA/3  
 
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  Table 1  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 2 6 7 8 17 24
Non Alloy and 
Other Alloy Hot 
Rolled Sheets and 
StripsNon Alloy and 
Other Alloy Cold 
Rolled SheetsTin Mill productsNon Alloy and 
Other Alloy Quarto 
PlatesStainless Hot 
Rolled Sheets and 
StripsAngles, Shapes and 
Sections of Iron or 
Non Alloy SteelOther Seamless 
Tubes
Quotas - tons All third countries Brazil Brazil Other countries Other countries Brazil Other countries
02/02/19 a 30/06/19 3.359.532 65.399 19.730 466.981 10.197 8.578 55.346
01/07/19 a 30/06/20 8.641.213 168.215 50.749 1.201.144 26.227 22.064 142.357
01/07/20 a 30/06/21 9.073.273 176.626 53.286 1.261.201 27.539 23.167 149.475
Market Share % Brazil - 2017 0,053 0,145 0,110 0,109
Calculation of the quotas for Brazil - tons
2019 442.174 162.586 49.050 168.015 2.790 21.325 14.954
2020 468.920 172.420 52.017 178.178 2.958 22.615 15.858
2021 (até jun) 240.179 88.313 26.643 91.262 1.515 11.583 8.122
Brazil exports forecast - tons
2019 272.564 269.102 49.825 88.670 9.908 10.552 28.213
2020 278.029 274.498 50.824 90.448 10.107 10.764 28.779
2021 (até jun) 141.578 139.779 25.880 46.058 5.147 5.481 14.655
Exports forecast vs. Quotas - tons
2019 -169.610 106.516 774 -79.345 7.118 -10.773 13.259
2020 -190.890 102.077 -1.194 -87.730 7.148 -11.851 12.921
2021 (até jun) -98.601 51.467 -763 -45.204 3.631 -6.102 6.532
Average price 2018 - €/ton 529,10 583,30 770,73 564,04 1.141,27 489,48 1.443,05
Exports subject to tariffs - €
2019 - 62.131.092 596.705 - 8.124.037 - 19.134.166
2020 - 59.542.163 - - - - -
2021 (January-June) - 30.020.703 - - - - -G/L/1296 • G/SG/N/12/BRA/3  
 
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  Table 2  
 
 
 
 
__________  NCM Description  Imports 
from EU in 
2018 (US$)  Additional 
imports 
tariff (%)  Level of 
suspensions 
per year 
(US$)  Level of 
suspensions 
during 
safeguards 
application 
(US$)  
04021010  Milk in powder, fat content<=1, 
5%arsenic<5ppm, con/ad sug  - 15 - - 
04021090  Other milk, cream, in powder, fat content<=1, 5% 
con/ad sug  1.527.952  15 229.193  553.883  
04022110  Integral milk, in powder, fat cont.>1, 5%, 
concen.n/sugar  - 15 - - 
04022120  Semi-ski.milk, powder, fat content>1, 5%, 
concent.n/sugar  - 15 - - 
04022910  Integral milk, powder, etc.fat cont>1, 5%, 
conc.added sugar  - 15 - - 
04022920  Semi-skim.milk, powder, etc.fat cont>1, 5%, 
con.added sug  - 15 - - 
07032090  Other fresh/chilled garlic  11.188.090  19 2.125.737  5.137.198  
24021000  Cigars, cheroots and cigarillos, containing tobacco  43.733  11 4.811  11.626  
24022000  Cigarettes containing tobacco  16.164.630  11 1.778.109  4.297.097  
24029000  Cigars/cheroots/cigarillos/cigarettes, of tobacco 
subst.  349 11 38 93 
42022220  Purses of textile materials  3.841.809  19 729.944  1.764.031  
42023100  Pockets articles/purses of natural 
leathers/reconst.etc  3.216.382  11 353.802  855.022  
42031000  Apparel of natural leather or composition  1.468.700  11 161.557  390.429  
42033000  Belts and bandoliers, etc.of natural 
leather/composit.  2.279.953  11 250.795  606.088  
64031900  Footwear for other sports, of leather  450.597  19 85.613  206.899  
64032000  Footwear of leather, with upper straps, etc  3.828  19 727 1.758  
64034000  Oth.footwear of leather, c/protective metal toecap  340.489  19 64.693  156.341  
64035190  Oth.footwear of leather and outer soles of leather, 
covering  the ankle  1.190.131  19 226.125  546.468  
64035990  Oth.footwear of leather and outer soles of leather, 
covering the ankle  8.244.553  19 1.566.465  3.785.624  
64039190  Oth.footwear of leather and outer soles of leather, 
covering the ankle  1.197.730  19 227.569  549.958  
64039990  Other footwear of leather with outer soles of 
rubber or plastic  7.850.612  19 1.491.616  3.604.739  
71131100  Articles of jewellery, silver, wheter or 
n/plated/clad pr  1.341.444  10 134.144  324.182  
71131900  Articles of jewellery, silver, of oth.precious metal, 
etc 5.499.401  10 549.940  1.329.022  
71132000  Articles of jewellery, of base metal clad with 
prec.met.  20.010  10 2.001  4.836  
87031000  Motor vehicles desig.f/travel.on snow,golf cars,etc  31.790  19 6.040  14.597  
90041000  Sunglasses  34.236.732  11 3.766.041  9.101.265  
94036000  Other wooden furniture  6.745.782  10 674.578  1.630.231  
95030021  Dolls activated by mechanism of rope or electric  1.609  19 306 739 
95030022  Other puppets, even dressed  19.361  19 3.679  8.890  
95030031  Filled toys  repres.animals, no hum. criatu.  17.309  19 3.289  7.948  
95030097  Other toys with electric motor  208.296  19 39.576  95.643  
95044000  Playing cards  35.539  11 3.909  9.447  
95063100  Complete clubs for golf  3.418  11 376 909 
95063200  Balls for golf  1.216  11 134 323 
95063900  Other equipment for golf  2.078  11 229 552 
96140000  Pipes, cigarette holders and their parts  44.806  10 4.481  10.828