WORLD TRADE  
ORGANIZATION  WT/DS332/16 
29 August 2008 
 (08-4020) 
 Original:   English 
  
 
     
 
    
 
  
BRAZIL – MEASURES AFFECTING IMPORTS OF RETREADED TYRES 
   
ARB-2008-2/23 
    
Arbitration 
under Article 21.3(c) of the 
Understanding on Rules and Procedures 
Governing the Settlement of Disputes 
 
 
 
     
 
Award of the Arbitrator 
Yasuhei Taniguchi 
  WT/DS332/16 
 Page i 
 
 
  
I.
 Introduction................................................................................................................... ..............1  
II. Arguments of the Parties....................................................................................................... ......2  
A. Brazil ..............................................................................................................................2  
1. Proceeding before the Federal Supreme Court Concerning Preliminary 
Court Injunctions ..............................................................................................3  
2. Import Regime for Retreaded Tyres from MERCOSUR Countries .................5  
3. Proceeding before the Federal Supreme Court Concerning Laws Adopted by the State of Rio Grande do Sul......................................................7
 
B. European Communities ..................................................................................................7  
1. Repealing the Inconsistent Measures................................................................8  
2. Implementation Proposed by Brazil..................................................................9  
III. Reasonable Period of Time...................................................................................................... .13 
A. Preliminary Matters .....................................................................................................13  
1. Mandate of the Arbitrator ...............................................................................13  
2. The Measures to be Brought into Conformity ................................................15  
B. Factors Affecting the Determination of the Reasonable Period of Time .....................17  
1. Burden of Proof ..............................................................................................17  
2. Choice of Method of Implementation.............................................................17  
3. The Specific Steps of Implementation............................................................19  
IV. Award.......................................................................................................................... ..............33  
 WT/DS332/16 
Page ii  
 
CASES CITED IN THIS AWARD 
 
Short Title Full case title and citation 
Australia – Salmon  Award of the Arbitrator, Australia – Measures Affecting Importation of 
Salmon – Arbitration under Article 21.3(c) of the DSU , WT/DS18/9, 23 February 
1999, DSR 1999:I, 267 
Brazil – Retreaded Tyres Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres , 
WT/DS332/AB/R, adopted 17 December 2007 
Brazil – Retreaded Tyres Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres , 
WT/DS332/R, adopted 17 December 2007, as modified by Appellate Body 
Report, WT/DS332/AB/R 
Canada – Patent Term  Award of the Arbitrator, Canada – Term of Patent Protection – Arbitration 
under Article 21.3(c) of the DSU , WT/DS170/10, 28 February 2001, 
DSR 2001:V, 2031 
Canada – Pharmaceutical 
Patents  Award of the Arbitrator, Canada – Patent Protection of Pharmaceutical 
Products – Arbitration under Article 21.3(c) of the DSU , WT/DS114/13, 
18 August 2000, DSR 2002:I, 3 
Chile – Price Band System  Award of the Arbitrator, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products – Arbitration under Article 21.3(c) of 
the DSU , WT/DS207/13, 17 March 2003, DSR 2003:III, 1237 
EC – Chicken Cuts Award of the Arbitrator, European Communities – Customs Classification of 
Frozen Boneless Chicken Cuts – Arbitration under Article 21.3(c) of the DSU , 
WT/DS269/13, WT/DS286/15, 20 February 2006 
EC – Export Subsidies on 
Sugar Award of the Arbitrator, European Communities – Export Subsidies on Sugar – 
Arbitration under Article 21.3(c) of the DSU , WT/DS265/33, WT/DS266/33, 
WT/DS283/14, 28 October 2005, DSR 2005:XXIII, 11581 
EC – Hormones  Award of the Arbitrator, EC Measures Concerning Meat and Meat Products 
(Hormones) – Arbitration under Article 21.3(c) of the DSU , WT/DS26/15, 
WT/DS48/13, 29 May 1998, DSR 1998:V, 1833 
EC – Tariff Preferences Award of the Arbitrator, European Communities – Conditions for the Granting 
of Tariff Preferences to Developing Countries  – Arbitration under 
Article 21.3(c) of the DSU , WT/DS246/14, 20 September 2004, DSR 2004:IX, 
4313 
Japan – DRAMs (Korea) Award of the Arbitrator, Japan – Countervailing Duties on Dynamic Random 
Access Memories from Korea – Arbitration under Article 21.3(c) of the DSU , 
WT/DS336/16, 5 May 2008 
Korea – Alcoholic Beverages  Award of the Arbitrator, Korea – Taxes on Alcoholic Beverages – Arbitration 
under Article 21.3(c) of the DSU , WT/DS75/16, WT/DS84/14, 4 June 1999, 
DSR 1999:II, 937 
US – 1916 Act  Award of the Arbitrator, United States – Anti-Dumping Act of 1916 – Arbitration 
under Article 21.3(c) of the DSU , WT/DS136/11, WT/DS162/14, 28 February 
2001, DSR 2001:V, 2017 
US – Gambling Award of the Arbitrator, United States – Measures Affecting the Cross-Border 
Supply of Gambling and Betting Services – Arbitration under Article 21.3(c) of 
the DSU , WT/DS285/13, 19 August 2005, DSR 2005:XXIII, 11639 
US – Hot-Rolled Steel  Award of the Arbitrator, United States – Anti-Dumping Measures on Certain  
Hot-Rolled Steel Products from Japan – Arbitration under Article 21.3(c) of the 
DSU , WT/DS184/13, 19 February 2002, DSR 2002:IV, 1389  WT/DS332/16 
 Page iii 
 
 
Short Title Full case title and citation 
US – Offset Act  
(Byrd Amendment ) Award of the Arbitrator, United States – Continued Dumping and Subsidy Offset 
Act of 2000 – Arbitration under Article 21.3(c) of the DSU , WT/DS217/14, 
WT/DS234/22, 13 June 2003, DSR 2003:III, 1163 
US – Oil Country Tubular 
Goods Sunset Reviews Award of the Arbitrator, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods  from Argentina – Arbitration under 
Article 21.3(c) of the DSU , WT/DS268/12, 7 June 2005, DSR 2005:XXIII, 
11619 
US – Section 110(5) Copyright 
Act Award of the Arbitrator, United States – Section 110(5) of the US Copyright 
Act – Arbitration under Article 21.3(c) of the DSU , WT/DS160/12, 
15 January 2001, DSR 2001:II, 657 
 WT/DS332/16 
Page iv  
 
 
ABBREVIATIONS USED IN THIS AWARD 
 
Abbreviation Description 
Ad Hoc Working Group MERCOSUR/GMC Resolution No. 25/08 of 29 June 2008, 
establishing an Ad Hoc Group for a Regional Policy on Tyres, 
Including Used and Retreaded Tyres (Exhibit BRA-181) 
ADI Ação Direta de Inconstitucionalidade  (Direct Unconstitutionality 
Action)  
ADPF Argüição de Descumprimento de Preceito Fundamental  (Allegation of 
Violation of Fundamental Precept) 
Appellate Body Report Appellate Body Report, Brazil – Measures Affecting Imports of 
Retreaded Tyres , WT/DS332/AB/R 
CAMEX Câmara de Comércio Exteri or (Chamber of Foreign Trade) 
CMC MERCOSUR's Common Market Council 
Constitution Constitution of the Federal Republic of Brazil  
DECEX Departamento de Comércio Exterior  (Department of Foreign Trade of 
the Brazilian Ministry of Developmen t, Industry, and Foreign Trade) 
DSB Dispute Settlement Body 
DSU Understanding on Rules and Procedures Governing the Settlement of 
Disputes 
GATT 1994 General Agreement on Tariffs and Trade 1994 
GMC MERCOSUR's Common Market Group  
MERCOSUR  
 Mercado Común del Sur (Southern  Common Market) – a regional 
trade agreement between Brazil, Ar gentina, Uruguay, and Paraguay, 
founded in 1991 by the Treaty of Asunción, amended and updated by 
the 1994 Treaty of Ouro Preto 
MERCOSUR exemption Exemption from the import ban afforded by Brazil to imports of 
retreaded tyres originating in MERCOSUR countries 
Panel Report Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres , 
WT/DS332/R 
Portaria DECEX 8/1991 Portaria No. 8 of the DECEX dated 13 May 1991 
Portaria SECEX 14/2004 Portaria No. 14 of the SECEX dated 17 November 2004 
Portaria SECEX 36/2007 Portaria No. 36 of the SECEX dated 22 November 2007 
SECEX Secretaria de Comércio Exterior  (Secretariat of Foreign Trade of the 
Brazilian Ministry of Development, Industry, and Foreign Trade) 
WCO World Customs Organization 
WTO World Trade Organization 
   WT/DS332/16 
 Page 1 
 
 
WORLD TRADE ORGANIZATION  
AWARD OF THE ARBITRATOR  
 
 Brazil – Measures Affecting Imports of 
Retreaded Tyres 
 
Parties: 
 
Brazil 
European Communities   ARB-2008-2/23 
  Arbitrator:  
 Yasuhei Taniguchi 
 
  I. Introduction 
1. On 17 December 2007, the Dispute Settlement B ody (the "DSB") adopted  the Appellate Body 
Report
1 and the Panel Report2, as modified by the Appellate Body Report, in Brazil – Measures 
Affecting Imports of Retreaded Tyres .3  At the meeting of the DSB held on 15 January 2008, Brazil 
stated that it intended to comply with the recommenda tions and rulings of the DSB in this dispute, and 
that it would need a reasonable period of time in which to do so.4 
2. On 4 June 2008, the European Communities info rmed the DSB that consultations with Brazil 
had not resulted in an agreement on the reasonable period of time for implementation.  The European 
Communities therefore requested that such period be  determined through binding arbitration pursuant 
to Article 21.3(c) of the  Understanding on Rules and Procedures Governing the Settlement of 
Disputes (the "DSU").5 
3. The European Communities and Brazil were unable to agree on an arbitrator within 10 days 
of the matter being referred to arbitration.  Ther efore, by letter dated 16 June 2008, the European 
Communities requested that the Dir ector-General appoint an arbitrat or pursuant to footnote 12 to 
Article 21.3(c) of the DSU.  Th e Director-General appointed me as arbitrator on 26 June 2008, after 
consulting the parties.6  I informed the parties of my acceptance of the appointment by letter dated 
30 June 2008 and undertook to issue the award no later than 29 August 2008. 
                                                      
1Appellate Body Report, WT/DS332/AB/R. 
2Panel Report, WT/DS332/R. 
3WT/DS332/12. 
4WT/DSB/M/244, para. 11. 
5WT/DS332/14. 
6WT/DS332/15. WT/DS332/16 
Page 2  
 
4. By letters dated 1 July 2008, Brazil and the European Communities each agreed that this 
award will be deemed to be an arbitration award under Article 21.3(c) of the DSU, notwithstanding 
the expiry of the 90-day period stipulated in Article 21.3(c).
7   
5. Brazil filed its written submission on 9 July 2008.  The European Communities filed its 
written submission on 18 July 2008.  An oral hearing was held on 5 August 2008. 
II. Arguments of the Parties 
A. Brazil 
6. Brazil requests that I determine the "reasonabl e period of time" for implementation of the 
recommendations and rulings of the DSB in this dispute to be 21 months from the date of adoption by the DSB of the Panel and Appellate Body Reports
8, that is, until 17 September 2009. 
7. Brazil recognizes that Article 21.3(c) of the DSU provides that "the reasonable period of time 
to implement panel or Appellate Body recommendati ons should not exceed 15 months from the date 
of adoption of a panel or Appellate Body report."9  Yet, referring to the proviso in the third sentence 
of Article 21.3(c), that the period of time may be shorter or longer de pending on the particular 
circumstances in Article 21.3(c) of the DSU, Braz il asserts that the unique circumstances of this case 
require a period of time longer than 15 months for implementation.10 
8. Brazil proposes to implement the DSB's recommendations and rulings in this dispute by 
taking the following steps.  First, Brazil states that  it would "halt imports of used tyres through court 
injunctions" and submits that the reasonable pe riod of time for revoking the preliminary court 
injunctions granted in the present and past cases and to prevent new preliminary injunctions from 
being granted in the future would be 21 months from the date of adoption of the Appellate Body 
Report.11  Secondly, Brazil argues that it was necessar y to "establish new regulatory disciplines for 
used and retreaded tyres within MERCOSUR"12 and submits that 19 months  from the date of adoption 
of the Appellate Body Report would be a reasona ble period of time for negotiating a new regime for 
                                                      
7The 90-day period following adoption of the Panel and Appellate Body Reports expired on 
17 March 2008.  The parties concluded a procedural agreement on 11 February 2008 regarding the extension of 
the time period under Article 21.3(c) of the DSU. (WT/ DS332/13)  According to th is agreement, an award 
issued later than 90 days after the date of adoption of the recommendations and rulings by the DSB shall be 
deemed to be an award of th e arbitrator for purposes of Article 21.3(c) of the DSU. 
8Brazil's submission, paras. 5, 34, 36, 44, 47, 54, and 55. 
9Ibid., para. 23. 
10Ibid., para. 23. 
11Ibid., paras. 33 and 34. 
12Mercado Común del Sur ("MERCOSUR") (Southern Common Market).  WT/DS332/16 
 Page 3 
 
 
used and retreaded tyres with its MERCOSUR partners.13  Thirdly, Brazil would "declare the 
unconstitutionality of state measures that purport to regulate imports of retreaded tyres", which, in 
Brazil's submission, would require a time period of  21 months from the date of adoption of the 
Appellate Body Report.14 
9. Brazil emphasizes that Article 21.3(c) leaves to the implementing Member the decision as to 
how a measure should be brought into compliance with in the Member's own legal system and that the 
reasonable time needed for that purpose may vary depending on the means of compliance selected by 
the implementing Member.15  Making reference to previous Artic le 21.3(c) arbitration awards, Brazil 
recognizes that the reasonable period of time should be the "shortest period possible within the legal 
system of the Member".16  Yet, Brazil also submits that this is not to be understood as requiring the 
implementing Member to have recourse to extraordinary procedures.17  Finally, Brazil states that the 
15-month period in Article 21.3(c) is to be understood as a "guideline" rather than an "outer limit" for 
the reasonable period of time.18 
1. Proceeding before the Federal Supreme Court Concerning Preliminary 
Court Injunctions  
10. Brazil contends that, in order to stop imports of  used tyres effectively, the Government of 
Brazil has initiated Federal Supreme Court proceedings.19  The President of Brazil initiated an 
Argüição de Descumprimento de Preceito Fundamental  ("ADPF") (Allegation of Violation of 
Fundamental Precept) proceeding in September 2006,  requesting a ruling from the Federal Supreme 
Court that used tyre imports infringe on the fundamental constitutional right to a balanced 
environment.20  Brazil argues that a favourable ruling by the Federal Supreme Court in this case will 
                                                      
13Brazil's submission, paras. 33 and 35. 
14Ibid., paras. 33 and 36. 
15Ibid., para. 25 (quoting Award of the Arbitrator, Australia – Salmon , para. 35;  and referring to 
Award of the Arbitrator, Korea – Alcoholic Beverages , para. 45;  Award of the Arbitrator, US – Offset Act (Byrd 
Amendment) , para. 48;  Award of the Arbitrator, EC – Tariff Preferences , para. 30;  Award of the Arbitrator, 
Chile – Price Band System , para. 32;  Award of the Arbitrator, US – Oil Country Tubular Goods Sunset 
Reviews , para. 26;  Award of the Arbitrator, Japan – DRAMs (Korea) , para. 25;  Award of the Arbitrator, EC – 
Chicken Cuts , para. 49; and Award of the Arbitrator, EC – Hormones , para. 38). 
16Ibid., para. 30 (referring to Award of the Arbitrator, Chile – Price Band System , para. 34;  Award of 
the Arbitrator, Canada – Pharmaceutical Patents , para. 48;  Award of the Arbitrator, EC – Hormones , para. 26; 
and Award of the Arbitrator, EC – Tariff Preferences , para. 26). 
17Ibid., para. 30 (referring to Award of the Arbitrator, EC – Chicken Cuts , para. 49;  Award of the 
Arbitrator, Korea – Alcoholic Beverages , para. 42;  Award of the Arbitrator, US – Section 110(5) Copyright Act , 
para. 32;  Award of the Arbitrator, Canada – Patent Term , para. 39;  Award of the Arbitrator, EC – Tariff 
Preferences , para. 42;  and Award of the Arbitrator, Japan – DRAMs (Korea) , para. 25). 
18Ibid., para. 31 (quoting Award of the Arbitrator, US – Hot-Rolled Steel , para. 25). 
19Ibid., para. 38. 
20Ibid., para. 40. WT/DS332/16 
Page 4  
 
revoke the existing preliminary injunctions, prohibit the issuance of future injunctions, and thereby 
bring Brazil into compliance with its Worl d Trade Organization ("WTO") obligations. 
11. Brazil makes reference to decisions by the Federal Supreme Court involving individual 
preliminary injunctions.
21  Brazil submits that the Federal Supreme Court has rejected several 
arguments advanced in favour of preliminary in junctions, including the arguments that:  (1) a 
"portaria " is not an appropriate instrument to implement the import ban on used tyres;  (2) the 
government agency that imposed the initial ban lacked  the constitutional authority to do so;  (3) the 
prohibition of imports of used, but not new, tyres violated the constitutional principle of isonomy, or 
equality of rights;  and (4) the import ban on used tyres interfered with the constitutional principle of 
free enterprise because it restrict ed access to supplies of raw materials for domestic retreaders.22 
12. Furthermore, Brazil refers to two 2007 proceed ings before the Federal Supreme Court, in 
which the President of the Supreme Court accepted the Solicitor General's request to suspend lower 
courts' rulings that allowed specific retreaders to import used tyres.  Brazil contends that these 
decisions recognized that the importation of used ty res entailed environmental risks.  Brazil submits 
that these cases were decided based on, inter alia , public interest in health and an ecologically 
balanced environment according to Article 225 of the Federal Constitution.23  Brazil explains that 
these Federal Supreme Court cases involved specific preliminary injunctions and, therefore, did not have prospective application;  yet, in Brazil's vi ew, they indicated the Federal Supreme Court's view 
on the issue.  Furthermore, Brazil explains that the ADPF, in contrast to the specific preliminary 
injunctions, would apply prospectively.
24 
13. Brazil points out that the ADPF was initiated in September 2006, and submits that, on 
31 January 2008, the Government of Brazil asked th e Federal Supreme Court to take note of the WTO 
decision and to expedite its proceedings.  A pub lic hearing in this case took place on 27 June 2008.25   
Brazil asserts that, in any event, it will be 21 mont hs after the adoption of the Appellate Body Report 
before the Federal Supreme Court issues its decision.26 
14. In support of its argument that 21 months is a reasonable period of time for Brazil to 
implement the recommendations and rulings of the DSB in this dispute, Brazil explains that the only 
ADPF action decided by the Federa l Supreme Court of Brazil so fa r took 41 months from the day of 
                                                      
21Brazil's submission, para. 39. 
22Ibid. 
23Ibid., para. 42, where Brazil refers to the Decision of  the Plenary of the Federal Supreme Court in 
Case No. STA 118-AgR (Exhibit BRA-179 submitted by Brazil to the Arbitrator). 
24Ibid., para. 43. 
25Ibid., para. 46 and footnote 67 thereto. 
26Ibid., para. 44.  WT/DS332/16 
 Page 5 
 
 
the petition.27  Furthermore, Brazil makes re ference to the duration of the Ação Direta de 
Inconstitucionalidade  ("ADI") (Direct Unconstitutionality Action), which it describes as a more 
frequently used, but similarly complex, constitutio nal action.  Brazil surveyed 1,333 ADI actions 
submitted to the Federal Supreme Court between  1 January 1998 and 31 December 2003.  Brazil 
submits that the average duration of these proceedings  (not taking into account actions that are still 
pending or that have been rejected  on procedural grounds) was 34 months.28 
15. Brazil contends that the ADPF involving imports of used tyres is "of like complexity" as the 
ADI concerning stem cell research.  Brazil submits th at it took the Federal Supreme Court 38 months 
to issue a decision in the ADI proceeding concerning stem cell research.  Therefore, Brazil considers 
it reasonable to expect that the Federal Supr eme Court's decision in the pending ADPF action 
concerning retreaded tyres would take at least 34 months.29  Brazil envisages that a further two 
months would be required for implementation of the Federal Supreme Court's decision, in particular, 
notifying Brazil's federal courts of the decisi on and having prior licenses withdrawn by customs 
authorities.  Subtracting 15 months (the period between the initiation of the ADPF procedure and the 
adoption of the Appellate Body Report) from the tota l of 36 months, leads Brazil to conclude that a 
total of 21 months from the date of the adoption of the Appellate Body Report would be a reasonable 
period of time to comply with the DSB's recommenda tions and rulings relati ng to preliminary court 
injunctions with respect to imports of used tyres.30 
2. Import Regime for Retreaded Tyres from MERCOSUR Countries  
16. Brazil contends that, in order to comply with  the DSB's recommendations and rulings with 
respect to the exemption from the import ban on re treaded tyres originating in MERCOSUR countries 
(the "MERCOSUR exemption") established in Article 40 of Portaria No. 14 of the Secretaria de 
Comércio Exterior ("SECEX") (Secretariat of Foreign Trade of the Brazilian Ministry of 
Development, Industry, and Foreign Trade) da ted 17 November 2004 ("Portaria SECEX 14/2004")31, 
it would have to negotiate an agre ement with its MERCOSUR partners.32  Brazil argues that removing 
the exemption from the import ban on retreaded tyres originating in MERCOSUR countries and 
restoring the original  erga omnes  application of the import ban on retreaded tyres would not be a 
                                                      
27Brazil's submission, para. 45. 
28Ibid. and footnote 66 thereto. 
29Ibid., para. 47. 
30Ibid. 
31I note that in November 2006, Article 40 of Portaria  SECEX 14/2004 was replaced by Article 41 of 
Portaria  SECEX 35/2006, and subsequently by Article 41 of Portaria  SECEX 36/2007.  The text of the Article 
remains identical. (Appellate Body Report, footnote 15 8 to para. 122;  European Communities' submission, 
para. 35) 
32Brazil's submission, para. 48. WT/DS332/16 
Page 6  
 
viable option because it would conflict with th e current MERCOSUR rules as interpreted by the 
MERCOSUR Tribunal.
33 
17. In support of its argument that 19 months is a reasonable period of time for Brazil to achieve 
compliance with the DSB's recommendations and rulings, Brazil submits that a new MERCOSUR-
wide tyres regime will have to be reviewed and approved by the Common Market Group ("GMC"), 
the executive body of MERCOSUR, and by the Common Market Council ("CMC")—MERCOSUR's 
highest body, vested with the authority to promulgate union- wide policies and regulations.34 
18. Brazil submits that, on 15-16 April 2008, it proposed a GMC Resolution to create an Ad Hoc 
Working Group for the Regional Policy for Tyres35 (the "Ad Hoc Working Group").  Brazil further 
contends that the GMC approved the Resolution an d established the group at a meeting held on 29 
June 2008.  Brazil maintains that the Ad Hoc Wo rking Group on Tyres will present its results to the 
GMC in December 2008, and that the GMC's decision will then be submitted to the CMC for a vote, 
also in December 2008.36  The GMC's decision establishing a new regime for the importation of 
retreaded tyres would then have to be submitted to MERCOSUR member states' legislative bodies for 
approval.  Based on a survey of implementation of all 27 CMC Decisions and 188 GMC Resolutions 
adopted and incorporated into domestic law between  1998 and 2007, Brazil contends that the average 
period of time for incorporation of CMC Decisions  and GMC Resolutions into national law was 34 
months.37  Brazil submits, however, that in the present case the benchmark should rather be the 
shortest period for legislative approval, which, according to Brazil, was six months.38  Further, Brazil 
maintains that according to Article 40 of the Protoc ol of Ouro Preto on the Institutional Structure of 
MERCOSUR39, an additional month is necessary for the regi me to enter into force after it has been 
incorporated into the domestic legal system of the member states.40 
19. Summing up the time period required for designing a new measure and securing CMC 
approval (12 months), approval by MERCOSUR memb ers' legislatures (6 months), and the new 
                                                      
33Brazil's submission, para. 49. 
34Ibid., para. 50. 
35Ibid., para. 51 and footnote 70 thereto (referring to MERCOSUR/GMC Resolution No. 25/08 of 
29 June 2008, establishing an Ad Hoc Group for a Regional Policy on Tyres, Including Used and Retreaded 
Tyres (Exhibit BRA-181 submitted by Brazil to the Arbitrator)). 
36Ibid. (referring to MERCOSUR/GMC Resolution No. 25/08, supra , footnote 35).  
37Ibid., para. 52 and footnote 72 thereto. 
38Ibid., para. 52 and footnote 73 thereto (referring to MERCOSUR/GMC Resolutions No. 35/98, 
No. 36/98, and No. 21/99). 
39Additional Protocol to the Treaty of Asunción on the Institutional Structure of MERCOSUR, done in 
Ouro Preto on 17 December 1994. 
40Brazil's submission, para. 52 and footnote 74 thereto.  WT/DS332/16 
 Page 7 
 
 
measure's entering into force (one month), Braz il submits that 19 months would be a reasonable 
period of time for Brazil to comply with the DSB's recommendations and rulings.41 
3. Proceeding before the Federal Supreme Court Concerning Laws Adopted by 
the State of Rio Grande do Sul  
20. Brazil contends that certain state measures a dopted by Rio Grande do Sul have no practical 
application because the state is not competent to  issue such acts.  Rather, the Brazilian Federal 
Government has exclusive comp etence to issue import licenses.42 
21. Nonetheless, Brazil submits that, with respect  to a potential inconsistency of the state 
measures with the Brazilian Federal Constitution, Br azil's General Prosecutor has filed an ADI action 
with the Federal Supreme Court requesti ng the court to revoke the state measures.43  According to 
Brazil, this action was filed in September 2006.  In  view of the Federal Supreme Court's practice of 
grouping together cases with related subject matters, Brazil asserts that this ADI action would most 
likely be decided together with the ADPF action involving tyre imports.  Based on the assumption that both cases will be decided together, Brazil argues that  the same period of time, namely 21 months, 
would be a reasonable period of time for complian ce with respect to the measures adopted by the 
State of Rio Grande do Sul.
44 
B. European Communities 
22. The European Communities requests that I dete rmine the "reasonable period of time" for 
implementation of the recommendations  and rulings of the DSB in this dispute to be 10 months from 
the date of the adoption by the DSB of the Pa nel and Appellate Body Reports, that is, until 
17 October 2008.45 
23. As an initial matter, the European Communities s ubmits that Article 21.1 of the DSU calls for 
"prompt compliance" by the implementing Member.  Therefore, in the European Communities' view, 
the default position is compliance in the shortest delay possible, should Brazil fail to meet its burden 
of proving that a longer period is indeed necessary.  The European Communities argues that the 
average time periods referred to by Brazil for certa in of its proposed implementation steps are not 
relevant, but that, instead, implementing measures have to be adopted in the shortest possible 
manner.46  Furthermore, the European Communities argues that failure to  begin adequately 
                                                      
41Brazil's submission, para. 53. 
42Ibid., para. 54. 
43Ibid. 
44Ibid. 
45European Communities' submission, para. 1. 
46Ibid., para. 17. WT/DS332/16 
Page 8  
 
implementation after adoption of the report must not  result in advantage to the implementing Member 
and does not warrant granting of extra time.
47 
24. The European Communities maintains that th e most "obvious" way for Brazil to achieve 
compliance with its WTO obligations would consist in repealing or modifying the measures found to 
be inconsistent with its WTO obligations ( actus contrarius )48, and advances several arguments with 
respect to the individual measures.  In addition,  the European Communities raises objections to the 
specific implementing steps proposed by Brazil. 
1. Repealing the Inconsistent Measures  
25. First, with respect to Portaria No. 36 of the SECEX dated 22 November 2007 ("Portaria 
SECEX 36/2007"), the European Communities ar gues that Brazil could lift the import ban on 
retreaded tyres by repealing Article 41 of that  portaria .49  Portarias  are sub-legislative normative 
acts, adopted by the Executive without involvement of Congress.   The European Communities 
submits that a  portaria  can be modified or repealed within weeks or a few months.  In support of this 
argument, the European Communities makes refe rence to Brazil's implementation of a 2002 
MERCOSUR arbitral award through modification of the respective portaria  within two months 
following the ruling of the MERCOSUR arbitral tribuna l.  The European Communities claims that the 
implementation obligation in the context of the pres ent dispute is similar to that concerning the 2002 
MERCOSUR arbitral award as both relate to a bindi ng ruling by an international organization and 
concern the same subject-matter, the same action ( lifting an import ban), and the same type of legal 
act.50  Furthermore, the European Communities lists several  portarias  adopted in 2007 as examples 
illustrating that the two-month period estimated by  the European Communities is the usual period of 
time for the adoption of  portarias .51  The European Communities also argues that an implementing 
Member is required to take full advantage of the fl exibility inherent in its legal system in order to 
ensure that implementation takes place in acco rdance with the requirement of promptness in 
Article 21 of the DSU.  In the European Commun ities' view, the absence of mandatory time periods 
within which steps must be taken under Brazil's law to amend or revoke portarias  demonstrates the 
existence of flexibility and supports the view that  implementation can be achieved within a short 
period of time.52 
                                                      
47European Communities' submission, para. 33 (referring to Award of the Arbitrator, US – Section 
110(5) Copyright Act , para. 46).  
48Ibid., para. 34. 
49Ibid., para. 35. 
50Ibid., para. 38 and footnotes 33 and 34 thereto. 
51Ibid., para. 39. 
52Ibid., para. 41.  WT/DS332/16 
 Page 9 
 
 
26. Secondly, the European Communities asserts th at Presidential Decree 3.179 as amended by 
Presidential Decree 3.919 should be repealed.  Accord ing to the European Communities, this could be 
achieved in less than two months.  In support of its argument, the European Communities lists five 
presidential decrees modifying decrees that had been  issued up to one-and-a-half months before the 
respective presidential decrees were issued.53  The European Communiti es further argues that the 
repeal of Presidential Decree 3.179 as amended by Presidential Decree 3.919 could be conducted in 
parallel to the modification of Portaria SECEX 36/2007.54 
27. Thirdly, the European Communities maintains th at, to the extent Portaria No. 8 of the 
Departamento de Comércio Exterior  ("DECEX") (Department of Foreign Trade of the Brazilian 
Ministry of Development, Industry, and Fo reign Trade) dated 13 May 1991 ("Portaria 
DECEX 8/1991") banning the importation of used products  has been applied to imports of retreaded 
tyres, Brazil is required to change its practice of interpretation and application.  In the European 
Communities' view, this would not entail modificati on of legislation and therefore would not require 
any specific amount of time.55 
28. Fourthly, the European Communities submits that, pursuant to Article XXIV:12 of the 
General Agreement on Tariffs and Trade 1994 (the "GATT 1994") and Article 22.9 of the DSU, 
Brazil is obliged to take the necessary steps to  ensure that Law 12.114 as amended by Law 12.381 of 
the State of Rio Grande do Sul is brought into co mpliance with Brazil's obligations under the covered 
agreements.  The European Co mmunities argues that the reasonable period of time should be 
calculated based on the time required for the state legi slator to remove the WTO inconsistency, if that 
is the shortest possible option;  it should not be  based on the time required for the Brazilian Federal 
Government to prompt the State of Rio Grande do Sul to modify its legislation.  The European 
Communities maintains that state laws can be amen ded within approximately  two months, and lists 
three recent examples of state laws that have been adopted within less than two months in support of 
its argument.56 
2. Implementation Proposed by Brazil  
29. The European Communities contends that the means proposed by Brazil are not achievable 
within the timeframe of 15 months set out in Ar ticle 21.3(c) and raises several objections to the 
specific implementation steps proposed by Brazil. 
                                                      
53European Communities' submission, para. 43 and footnote 40 thereto. 
54Ibid., para. 44. 
55Ibid., para. 45. 
56Ibid., para. 48 (referring to Laws 12.979, 12.949, and 12.761 of the State of Rio Grande do Sul).  The 
European Communities identifies the website <www.al.rs.g ov.br/legis> as the source for this information. 
(Ibid., footnote 41 to para. 48) WT/DS332/16 
Page 10  
 
(a) Proceeding before the Fede ral Supreme Court Concerning 
Preliminary Court Injunctions 
30. The European Communities considers Brazil's propo sal to stop imports of used tyres through 
a Federal Supreme Court proceeding that would invalidate existing prelim inary injunctions and 
prohibit the issuance of new injunctions to be "quite extravagant".
57  The European Communities 
asserts that it is the first time that a Member pr oposes to use domestic judicial action as a means of 
implementation.  The European Co mmunities argues that judicial acti on is not suitable to definitely 
stop the importation of used tyres into Brazil becau se Brazil would not have control over the outcome 
of that judicial action.  The European Commun ities submits that the Government of Brazil's 
expectation that the Federal Supreme Court would declare the preliminary injunctions 
unconstitutional was speculative, given that the judges of the Federal Supreme Court are 
independent.58  In the European Communities' view, the fact  that a party goes to court is evidence of 
the existence of legal controversy and uncertainty. 
31. In addition, the European Communities makes re ference to the Award of the Arbitrator in 
EC – Export Subsidies on Sugar , holding that the chosen method must be such that it could be 
implemented within a reasonable period of time in accordance with the guideline contained in 
Article 21.3(c) of the DSU59.  The European Communities asserts th at it is unclear what legal effects 
the ongoing ADPF lawsuit will have and that it h as already taken longer than an average WTO 
dispute settlement proceeding.  The only ADPF deci ded as yet took 41 months to complete.  In the 
European Communities' view, this does not corr espond to the timeframe set out for compliance 
measures in Article 21.3(c) of the DSU.60 
32. The European Communities argues that, in orde r to prevent domestic courts from issuing 
preliminary injunctions permitting th e importation of used tyres, Brazil could instead adopt a formal 
law that would elevate the existing import ban on retreaded tyres from the level of a portaria  to that of 
a parliamentary act.  The European Communities ma intains that a respective law could be adopted 
through the two chambers of the Brazilia n Congress within no more than 10 months.61 
33. Furthermore, the European Communities mak es reference to Article 62 of the Brazilian 
Federal Constitution concerning "provisional meas ures".  This provision enables the Brazilian 
President to declare provisionally applicable a bill submitted to Congress, thereby pressing the 
legislature to vote on the bill rapidly.  The Euro pean Communities submits that this procedure is 
                                                      
57European Communities' submission, para. 56. 
58Ibid., para. 57. 
59Ibid., para. 18 (referring to Award of the Arbitrator, EC – Export Subsidies on Sugar , para. 69). 
60Ibid., paras. 58 and 61. 
61Ibid., para. 63 and footnote 51 thereto.  WT/DS332/16 
 Page 11 
 
 
frequently used in Brazil and can therefore not be  regarded as an "extraordinary measure".  The 
European Communities states that compliance with  the recommendations and rulings of the DSB 
should give rise to comparable urgency as is re gularly applied in internal matters in Brazil.62 
(b) Import Regime for Retreaded Tyres from MERCOSUR Countries 
34. The European Communities submits that Brazil's proposal to negotiate a MERCOSUR-wide 
tyre import regime to be adopted by the CMC a nd subsequently approved by the Brazilian Congress 
does not constitute a valid basis for calculating the reasonable period of time under Article 21.3(c) of 
the DSU.63  The European Communities argues that, in the present case, negotiating a modification of 
an international legal framework is not an acceptabl e basis for the calculation of the reasonable period 
of time pursuant to Article 21.3(c), because alterna tive options for implementation are available and 
Brazil has not demonstrated that negotiating a MERCO SUR-wide regime is indispensable to achieve 
compliance.64  The European Communities asserts that banning the importation of retreaded tyres 
originating in MERCOSUR countries would merely require an actus contrarius  to the exemption 
provided in Portaria SECEX 36/2007.  In res ponse to Brazil's argument that removing the 
MERCOSUR exemption and restoring the original  erga omnes  application of the import ban on 
retreaded tyres would conflict with MERCOSUR rule s, the European Communiti es asserts that, in the 
summer of 2007, and again in the summer of 2008, Br azil restricted imports of retreaded tyres from 
MERCOSUR countries without any amendment to MERCOSUR rules.65 
35. The European Communities questions whether Brazil actually intends removing the 
MERCOSUR exemption from the import ban on retreaded tyres.  It alleges that Brazil, rather, envisages a regime under which all MERCOSUR count ries would ban the importation of used and 
retreaded tyres from outside the bloc while, at the sam e time, letting tyres of all types be traded freely 
within MERCOSUR.
66  The European Communities argues that, wh ile it is not up to the Arbitrator to 
assess the WTO-consistency of the implementation measure, the Arbitrator cannot allot time for a measure that obviously would not bring about compliance.
67 
                                                      
62European Communities' submission, para. 66. 
63Ibid., para. 80. 
64Ibid., para. 77. 
65Ibid., para. 68 (referring to Brazil's submission, para. 49;  Brazil's appellee's submission, para. 225;  
and Exhibit BRA-175 submitted by Brazil to the Appellate Body);  footnote 55 to para. 68 (stating that, on 22 August 2007, Brazil adopted Resolution No. 38 limiting imports of retreaded tyres from Uruguay to 130,000 
and from Paraguay to 120,000 per year);  footnote 61 to para. 78 (stating that Brazil further increased the import 
quota for retreaded tyres from Uruguay and Paraguay in the summer of 2008). 
66Ibid., para. 69 (referring to a news paper article in Argentina's La Nación , 22 February 2008, p. 16 
(Exhibit EC Arbitration-1 submitted by the European Communities to the Arbitrator)). 
67Ibid., para. 70. WT/DS332/16 
Page 12  
 
36. Referring to the Award of the Arbitrator in  EC – Chicken Cuts , the European Communities 
maintains that an implementing Member is not entirely free to choose among different options of 
achieving WTO compliance.  The European Commun ities argues that, if the implementing Member 
does not prove that recourse to external elements  (such as the adoption of a regional framework by 
MERCOSUR) is indispensable for achieving compliance, then the implementing Member must not receive grace time for such an exte rnal step especially if compliance can be achieved by that Member 
alone, without adopting a MERCOSUR-wide regime.
68 
37. In addition, the European Communities asserts that a modification of the MERCOSUR trade 
regime for tyres is not something Brazil could contro l, and that means of implementation that require 
the agreement of other states are too hypothetical fo r determining the reasonable period of time.  The 
European Communities adds that the timing and outcome of negotiations would be "completely 
uncertain", all the more because the intended negotiati ons were to take place w ithin the diversity of 
interests of the different members of MERCOSUR.  Furthermore, a decision would have to be ratified 
or transposed into the domestic legal system of  all MERCOSUR countries.  This would add to the 
uncertainty about the timing of the entry into force of a MERCOSUR-wide regime.69 
(c) Proceeding before the Federal Supreme Court Concerning Laws 
Adopted by the State of Rio Grande do Sul 
38. The European Communities submits that the ADI  action before the Federal Supreme Court 
challenging the state law of Rio Grande do Sul under the Brazilian Federal Constitution is not a 
suitable action that could serve as the basis for the determination of the reas onable period of time for 
implementation pursuant to Article 21.3(c) of the DSU.  The European Communities points out that 
proceedings before the Federal Supreme Court are concerned with potential vi olations of provisions 
of the Brazilian Federal Constitution.  Yet, th e present dispute before the WTO does not concern 
possible violations by state measures of the Fede ral Constitution of Brazil but rather, exclusively, 
violations of Brazil's WTO obligations.70 
39. With regard to the ADI proceeding before the Federal Supreme Court, the European 
Communities raises the same objections it raised with  respect to the ADPF proceeding above, namely, 
that the outcome of court proceedings is inherently  unforeseeable, and that the time the court will take 
in this case to reach a decision is uncertain.71 
                                                      
68European Communities' submission, para. 76 (quoting Award of the Arbitrator, EC – Chicken Cuts , 
para. 56) and para. 77. 
69Ibid., para. 78. 
70Ibid., para. 83. 
71Ibid., para. 84.  WT/DS332/16 
 Page 13 
 
 
40. In addition, the European Comm unities maintains that, even if, arguendo , the Federal 
Supreme Court rendered a decision confirming that Rio Grande do Sul's measure was inconsistent 
with the Brazilian Constitution, the legal effects of that decision on the state measures would be 
unclear.  The European Communities ques tions whether these measures would be ipso facto  repealed, 
or whether such decision would have to be enfor ced by the Federal Government, which would require 
additional time for Brazil to achieve compliance with its WTO obligations.72 
41. Finally, the European Communities refers to Br azil's statement that the average duration of 
ADI proceedings is 34 months.73  The European Communities argues th at this duration is significantly 
outside the 15-month "guideline" foreseen in Article  21.3(c) of the DSU as interpreted by previous 
arbitrators.  In the absence of particular circumstan ces justifying the allocation of a time period that is 
not the shortest period possible, the European Communities submits that the calculation of the 
reasonable period of time should be based on the tim e needed by the State Assembly of Rio Grande 
do Sul to repeal the measure, rather than on th e time expected for the conclusion of the ADI 
proceeding before the Federal Supreme Court. 
42. In the absence of any alternative course of action proposed by Brazil, the European 
Communities maintains that the only possible implem entation option is the repeal of the import ban 
on retreaded tyres, which, in the European Co mmunities' submission, will not take longer than 
10 months. 
III. Reasonable Period of Time 
A. Preliminary Matters 
1. Mandate of the Arbitrator  
43. The Panel and Appellate Body Reports in this dispute were adopted by the DSB on 
17 December 2007.  Pursuant to Article 21.3 of the DSU, Brazil informed the DSB of its intention to 
comply with the recommendations and rulings shortly thereafter.74  Article 21.3 of the DSU 
establishes that, when it is "impracticable" fo r a Member to comply "immediately" with the 
recommendations and rulings of the DSB, that Me mber "shall have a reasonable period of time in 
which to do so".  Brazil informed the DSB that it would require a reasonable period of time in this 
dispute.  Given that the parties failed to ag ree on a period of time for implementation of the 
recommendations and rulings of the DSB, the Director-General appointed me as Arbitrator on 
                                                      
72European Communities' submission, para. 85. 
73Ibid., para. 86 (referring to Brazil's submission, para. 45). 
74WT/DSB/M/244, para. 11. WT/DS332/16 
Page 14  
 
26 June 2008, after consulting with the parties
75, to determine a reasonable period of time, and I 
accepted the appointment on 30 June 2008. 
44. In determining the reasonable period of time,  I shall take due account of the relevant 
provisions of the DSU, in particular, para graph 3(c) of Article 21, which reads: 
[A] guideline for the arbitrator should be that the reasonable period 
of time to implement panel or Appellate Body recommendations 
should not exceed 15 months from the date of adoption of a panel or Appellate Body report.  However, th at time may be shorter or longer, 
depending upon the particular circumstances. (footnote omitted) 
45. I am mindful of the context in which this provi sion appears.  Article 21.1 of the DSU provides 
that "prompt compliance" with recommendations a nd rulings of the DSB "is essential in order to 
ensure effective resolution of disputes to the bene fit of all Members."  Moreover, the introductory 
paragraph of Article 21.3 indicates that a "reasona ble period of time" for implementation shall be 
granted only if "it is impracticable to comply imme diately" with the recommendations and rulings of 
the DSB. 
46. At the oral hearing in this arbitration, both Brazil and the European Communities accepted 
that Article 21.3 of the DSU requires "prompt compliance", and that a "reasonable period of time" for implementation shall be granted only if immediate co mpliance is "impracticable".  The parties further 
agreed with the statement of the arbitrator in  EC – Hormones  that the reasonable period of time 
"should be the shortest period possible within th e legal system of the [implementing] Member".
76 
47. I also draw guidance from principles articulated in  previous arbitration awards.  Accordingly, 
my mandate relates to the time by when the implementing Member must have achieved compliance, 
not to the manner  in which that Member achieves co mpliance.  Yet, I consider that when  a Member 
must comply cannot be determined in isolation from the chosen means of implementation.  It closely 
relates to the question of  how  a Member intends to comply with the recommendations and rulings of 
the DSB.  In that vein, the arbitrator in  US – 1916 Act  stated that, "[t]urning to the question of what 
would constitute the 'reasonable period of time' for im plementation in this case, I need to look first at 
the type of measure proposed to be used for implementation."77  Similarly, the arbitrator in  Japan – 
DRAMs (Korea)  found that, in order "to determine  when  a Member must comply, it may be 
necessary to consider  how  a Member proposes to do so."78 
                                                      
75WT/DS332/15. 
76Award of the Arbitrator, EC – Hormones , para. 26. 
77Award of the Arbitrator, US – 1916 Act , para. 34. 
78Award of the Arbitrator, Japan – DRAMs (Korea) , para. 26. (original emphasis)  WT/DS332/16 
 Page 15 
 
 
48. Brazil and the European Communities hold diverg ent views with respect to the appropriate 
means of implementation.  Yet, as a general prem ise, both parties agree with the statement of the 
arbitrator in  EC – Hormones  that the implementing Member has "a measure of discretion in 
choosing the means of implementation, as long as the me ans chosen are consistent with the 
recommendations and rulings of the DS B and with the covered agreements."79  In my determination, I 
am also guided by the statements of the arbitrator in EC – Export Subsidies on Sugar  that "the 
implementing Member does not have an unfettered right to choose any method of implementation", 
and that "the chosen method must be such that it could be implemented with in a reasonable period of 
time in accordance with the guidelines contained in Article 21.3(c)."80  As other arbitrators in the past, 
I also consider that the implementing Member is expected to use whatever  flexibility is available 
within its legal system81;  however, this does not necessarily include recourse to "extraordinary" 
procedures.82  Finally, I am mindful that it is beyond my  mandate to determine the consistency with 
WTO law of the measure eventually taken  to comply;  this can only be judged in Article 21.5 
proceedings.  In making my determination pursuant to Article 21.3(c), the means of implementation 
available to the Member concerned is , however, a relevant consideration.83  In particular, I must 
consider "whether the implementing action falls with in the range of permissible actions that can be 
taken in order to implement the DSB's recommendations and rulings."84  At the oral hearing in this 
arbitration, both Brazil and the European Communiti es agreed that these principles set out in previous 
arbitration awards are relevant for the de termination of a reasonable period of time. 
2. The Measures to be Brought into Conformity  
49. I refer to the relevant findings of both the Pane l and Appellate Body in this dispute.  The 
Appellate Body found that the inconsistency of the import ban on retreaded tyres with Article XI of 
                                                      
79Award of the Arbitrator, EC – Hormones , para. 38. (original emphasis)  See also Award of the 
Arbitrator, Japan – DRAMs (Korea) , para. 25 (referring to Award of the Arbitrator, EC – Chicken Cuts , 
para. 49, in turn referring to Award of the Arbitrator,  Canada – Pharmaceutical Patents , paras. 41-43;  Award 
of the Arbitrator, Chile – Price Band System , para. 32;  Award of the Arbitrator,  EC – Tariff Preferences , 
para. 30;  Award of the Arbitrator,  US – Oil Country Tubular Goods Sunset Reviews , para. 26;  Award of the 
Arbitrator, US – Gambling , para. 33;  and Award of the Arbitrator, EC – Export Subsidies on Sugar , para. 69). 
80Award of the Arbitrator, EC – Export Subsidies on Sugar , para. 69.  See also Award of the Arbitrator, 
Japan – DRAMs (Korea) , para. 27 (referring to Award of the Arbitrator, EC – Chicken Cuts , para. 56). 
81See Award of the Arbitrator, Japan – DRAMs (Korea) , para. 25 (referring to Award of the Arbitrator, 
EC – Chicken Cuts , para. 49, in turn referring to Award of the Arbitrator, Chile – Price Band System , para. 39;  
Award of the Arbitrator, EC – Tariff Preferences , para. 36;  and Award of the Arbitrator, US – Offset Act (Byrd 
Amendment) , para. 64). 
82See ibid. (referring to Awar d of the Arbitrator, EC – Chicken Cuts , para. 49, in turn referring to 
Award of the Arbitrator, Korea – Alcoholic Beverages , para. 42;  Award of the Arbitrator, Chile – Price Band 
System , para. 51;  and Award of the Arbitrator, US – Offset Act (Byrd Amendment) , para. 74). 
83Ibid., para. 27. 
84Ibid. WT/DS332/16 
Page 16  
 
the GATT 1994 falls within the scope of Article XX (b) but is not justified under the chapeau of 
Article XX of the GATT 1994. 
(a) In particular, the Appellate Body found that: 
 (i) the imports of used tyres
85 under court injunctions have resulted in the 
import ban on retreaded tyres "being applied in a manner that constitutes arbitrary or unjustifiable discriminati on within the meaning of the chapeau 
of Article XX" of the GATT 1994
86;  and 
 (ii) the MERCOSUR exemption, which exempts imports of retreaded tyres from 
MERCOSUR countries from the general ba n on imports of retreaded tyres 
into Brazil87, has "resulted in the import ban being applied in a manner that 
constitutes arbitrary or unjustifiable discrimination within the meaning of 
the chapeau of Article XX" of the GATT 1994.88 
(b) The Panel found that: 
 (i) the marketing prohibition and the disposal obligation concerning used and 
retreaded tyres contained in Law 12.114 of the State of Rio Grande do Sul, 
as amended by Law 12.381, are incons istent with Article III:4 of the 
GATT 1994 and are not justified under Article XX(b) of the GATT 199489; 
 (ii) Presidential Decree 3.179, as am ended by Presidential Decree 3.919, 
concerning the imposition of fines on the importation, marketing, 
transportation, storage, keeping, or  warehousing of retreaded tyres is 
                                                      
85I note that, in this dispute, the European Communities had challenged the import ban on retreaded 
tyres, but not the import ban on used tyres. (See Appellate Body Report, para. 123)  Yet, as the Panel has 
pointed out, the import ban on retreaded tyres is related to the import ban on used tyres.  The Panel found that the import ban on retreaded tyres can encourage domestic retreaders to retread more domestic used tyres than 
they might have done otherwise. (See Panel Report, para. 7.134) Therefore, the Panel and the Appellate Body 
considered imports of used tyres under court injunctions as a relevant element for the analysis of whether the 
import ban on retreaded tyres was applied consistently w ith the requirements of the chapeau of Article XX of 
the GATT 1994. 
86Appellate Body Report, para. 258(b)(iv). 
87The import ban as well as the MERCOSUR exemption from the import ban on retreaded tyres were 
established in Article 40 of Portar ia SECEX 14/2004. Article 40 of Port aria SECEX 14/2004 was replaced by 
Article 41 of Portaria SECEX 35/2006, and subsequently by  Article 41 of Portaria SECEX 36/2007.  The text of 
the provision remained the same. (See Appellate Body Report, para 122 and footnote 158 thereto;  and European 
Communities' submission, para. 35)  I note that Article 41 of Portaria SECEX 36/2007 incorporates an annex 
setting out criteria for the distribution of the quota. 
88Appellate Body Report, para. 258(b)(ii). 
89Panel Report, paras. 7.447 and 8.1(c).  WT/DS332/16 
 Page 17 
 
 
inconsistent with Article XI:1 of the GATT 1994 and is not justified under 
either Article XX(b) or under Article XX(d) of the GATT 199490;  and 
 (iii) Portaria DECEX 8/1991, to the extent that it prohibits the importation of 
retreaded tyres, is inconsistent with Article XI:1 and is not justified under 
Article XX(b) of the GATT 1994.91 
50. The Appellate Body recommended that the DSB request Brazil to bring its inconsistent 
measures into conformity with its obligations under the GATT 1994. 
B. Factors Affecting the Determination of the Reasonable Period of Time 
1. Burden of Proof  
51. As stated by previous arbitrators, I consider  that it is for the Member seeking a reasonable 
period of time for implementation to establish that the proposed period indeed constitutes the "shortest 
period possible" within its legal system to implem ent the recommendations and rulings of the DSB.  
Failing that, the arbitrator must determine the "s hortest period possible" for implementation, which 
will be "shorter than proposed by the implementin g Member, on the basis of the evidence presented 
by all parties".92 
2. Choice of Method of Implementation  
52. Brazil indicates that it will seek to implement th e recommendations and rulings of the DSB by 
taking the following steps. 
53. First, Brazil states that, in order to remedy th e inconsistency found in paragraph 258(b)(iv) of 
the Appellate Body Report in respect of preliminar y court injunctions, it will "halt imports" of used 
tyres through such injunctions through a decision of the Federal Supreme Court confirming the 
constitutionality of the import ban on used tyres.  Brazil submits that the reasonable period of time for 
revoking the preliminary court injunctions granted in present and past cases, and preventing lower 
courts from granting new preliminary injunctions in the future, would be 21 months from the date of 
adoption of the Panel and Appellate Body Reports.93 
                                                      
90Panel Report, paras. 7.390 and 8.1(b);  European Communities' submission, para. 42. 
91Panel Report, paras. 7.29 and 8.1(a)(ii);  European Communities' submission, para. 45. 
92Award of the Arbitrator, US – Offset Act (Byrd Amendment) , para. 44. 
93Brazil's submission, paras. 33 and 34. WT/DS332/16 
Page 18  
 
54. Secondly, in order to remedy the inconsistency found in paragraph 258(b)(ii) of the Appellate 
Body Report in respect of the MERCOSUR exempt ion, Brazil intends to "establish new regulatory 
disciplines for used and retr eaded tyres within MERCOSUR"
94.  Brazil submits that 19 months from 
the date of adoption of the Pane l and Appellate Body Reports woul d be a reasonable period of time 
for negotiating a new regime for used and re treaded tyres with its MERCOSUR partners.95 
55. Thirdly, in order to remedy the inconsistency fo und in paragraph 8.1(c) of the Panel Report in 
respect of the measures taken by the State of Rio Grande do Sul, Brazil is seeking a ruling from the 
Federal Supreme Court declaring the "unconstitutionality of state measures that purport to regulate imports of retreaded tyres"
96.  In Brazil's submission, this w ill require 21 months from the date of 
adoption of the Panel and Appellate Body Reports.97 
56. Finally, in order to remedy the inconsistenci es found in paragraph 8.1( b) of the Panel Report 
with respect to the fines imposed through Preside ntial Decree 3.179, as amended by Presidential 
Decree 3.919, Brazil did not request a particular pe riod for implementation and stated at the oral 
hearing that these measures were "totally accessory" meas ures that stand or fall with the import ban 
and do not have an independent life.98   
57. The European Communities contests that these st eps are suitable to achieve compliance with 
the recommendations and rulings of the DSB, and sugg ests, instead, that Brazil repeal or modify the 
measures found to be incompatible th rough legislative or regulatory action.99  In this respect, I note 
that, in principle, the implementing Member has "a measure of discretion in choosing the means of 
implementation" that it deems most appropriate.100  This discretion includes the choice of either 
withdrawing or modifying the measure found to be inconsistent.101  Article 3.7 of the DSU provides 
that the  first objective  of the dispute settlement mechanism is usually to secure the withdrawal of the 
measures concerned if these are found to be inconsiste nt.  This implies that withdrawal is not the only 
option.  Where withdrawal is impracticable, the Me mber may modify the measure, provided that this 
                                                      
94Brazil's submission, para. 33. 
95Ibid., paras. 33 and 35. 
96Ibid., para. 33. 
97Ibid., paras. 33 and 36. 
98With respect to the application of Portaria DECEX 8/1991 prohibiting imports of used consumer 
goods to the importation of retreaded tyres98, which was found to be inconsistent in paragraph 8.1(a)(ii) of the 
Panel Report, Brazil does not request a particular period of time for implementation.  According to the European 
Communities, to the extent that Portaria DECEX 8/19 91 has been applied to retreaded tyres, Brazil could 
achieve compliance by changing its practice of interpretation or application without modification of its 
legislation. (European Communities' submission, para. 45). 
99European Communities' submission, paras. 61, 80, and 87. 
100Award of the Arbitrator, EC – Hormones , para. 38. (original emphasis) 
101Award of the Arbitrator, Japan – DRAMs (Korea) , para. 37;  Award of the Arbitrator, US – Offset 
Act (Byrd Amendment) , para. 50.  WT/DS332/16 
 Page 19 
 
 
is done in the shortest time possible and that the mo difications are consistent with the relevant DSB 
recommendations and rulings and provis ions of the covered agreements.102  In that respect, I concur 
with the statement of the arbitrator in  EC – Hormones  that, "[a]lthough withdraw al of an inconsistent 
measure is the  preferred  means of complying with the recommendations and rulings of the DSB in a 
violation case, it is not necessarily the only means of implementation c onsistent with the covered 
agreements."103 
58. I consider that, in this dispute, Brazil could,  in principle, remain within the range of 
permissible actions to comply with the DSB recomm endations and rulings by either lifting the import 
ban on retreaded tyres and thus removing the incons istency with Article XI, or by modifying the 
existing import ban in a way that would rectify th e inconsistencies with the chapeau of Article XX 
found by the Appellate Body in respect of the used  tyre imports on the basis of preliminary court 
injunctions and the MERCOSUR exemption from the ba n on imports of retreaded tyres.  While it is 
not my role as an arbitrator to identify a particul ar method of implementation in my determination of 
by when  Brazil must comply, it is relevant to consider how it proposes to do so.  Therefore, in 
determining what would be a reasonable peri od of time for Brazil to comply with the 
recommendations and rulings of the DSB, it is necessary for me to take into consideration aspects of 
Brazil's chosen means of implementation. 
3. The Specific Steps of Implementation  
59. I now turn to the examination of what would be a "reasonable period of time" within which 
Brazil could achieve compliance in the light of th e specific means of implementation it has proposed.  
As noted earlier, Brazil requests a total of 21 months, that is, until 17 September 2009. 
(a) Proceeding before the Federal Supreme Court Concerning 
Preliminary Court Injunctions 
60. First, in order to prevent imports of used tyr es on the basis of preliminary injunctions issued 
by lower courts, Brazil indicates that it has initiated an Argüição de Descumprimento de Preceito 
Fundamental  ("ADPF") (Allegation of Violation of Fundamental Precept) proceeding before the 
Federal Supreme Court.  Brazil contends that a ruling by the Federal Supreme Court confirming the 
constitutionality of the ban on imports of used tyr es, and affirming that such imports infringe on the 
fundamental constitutional right to a balanced envi ronment pursuant to Article 225 of the Constitution 
of the Federal Republic of Brazil (the "Constitution")104, will revoke the existing preliminary 
                                                      
102Award of the Arbitrator, Japan – DRAMs (Korea) , para. 37;  Award of the Arbitrator, EC – Tariff 
Preferences , para. 30. 
103Award of the Arbitrator, EC – Hormones , para 38. (original emphasis;  footnote omitted) 
104Brazil's submission, para. 40 and footnote 57 thereto. WT/DS332/16 
Page 20  
 
injunctions, prohibit the issuance of future injuncti ons, and thereby bring Brazil into compliance with 
its WTO obligations.  Brazil maintains that preliminar y injunctions have been granted by lower courts 
based on various constitutional law grounds.  Braz il further asserts that, in previous cases involving 
individual injunctions, the Federal Supreme Court has rejected several arguments on the basis of 
which preliminary injunctions have been grante d by lower courts, including that:  (i) a " portaria " is 
not an appropriate instrument to implement the impor t ban on used tyres;  (ii) the government agency 
that imposed the initial ban lacked the constitutional au thority to do so;  (iii) the prohibition of imports 
of used, but not new, tyres violated the constitutiona l principle of isonomy, or equality of rights;  and 
(iv) the import ban on used tyres interfered with th e constitutional right of free enterprise pursuant to 
Article 170 of the Constitution because it restricted access to supplies of raw materials for domestic 
retreaders.
105 
61. As regards the fourth argument, Brazil points out that, in 2007, the President of the Federal 
Supreme Court accepted a request to suspend certai n individual inj unctions allowing used tyre 
imports, relying, inter alia , on the right to a balanced environment under Article 225 of the 
Constitution.  The plenary of the Court confirmed this decision by a majority of  7:3, albeit only in a 
preliminary injunction.106  Brazil notes that these decisions concerned individual injunctions and did 
not have general and prospectiv e application as would have a decision resulting from the ADPF 
proceeding at issue.  Nevertheless, in Brazil's view, these cases give an indication of the likely outcome of the ADPF proceeding in terms of the environmental concerns raised by injunctions 
permitting used tyre imports.  Therefore, Brazil is confident that, as a result of the pending ADPF 
proceeding, the Federal Supreme Court will revoke th e existing injunctions and prohibit, with general 
and prospective effect, the issuance of injunctions by lower courts.
107 
62. Brazil submits that the ADPF proceeding cons titutes the only effectiv e means to prevent 
lower courts from granting further preliminary in junctions authorizing used tyre imports.  A 
favourable outcome of that proceeding would ensure that the import ban on retreaded tyres is applied 
in a manner that is consistent with Braz il's obligations under the covered agreements. 
63. The European Communities argues that court ac tion is not a suitable measure to prevent 
definitively the importation of used tyres into Br azil because the outcome of the legal proceeding is 
"completely uncertain".108  Instead, the European Communities argues that "[t]he most 'obvious' way 
for Brazil to bring itself into compliance with its WTO obligations consists in repealing ( actus 
                                                      
105Brazil's submission, para. 39. 
106Exhibit BRA-179 submitted by Brazil to the Arbitrator. 
107Brazil's submission, para. 40. 
108European Communities' submission, para. 61.  WT/DS332/16 
 Page 21 
 
 
contrarius ) or modifying the measures found to be incompatible" with WTO law.109  The European 
Communities argues that, in order to qualify as an implementation action for which a Member may 
receive a reasonable period of time, the suggested action must give the implementing Member 
"control over the achievement of the intended objective".110  In the European Communities' view, the 
outcome of court proceedings is un certain and "inherently speculative".111  The European 
Communities submits that, in contrast to legisla tive or administrative acts, court proceedings are 
beyond the control of the government and therefore not a suitable means to achieve compliance.  The 
European Communities further argues that the gov ernment has a considerably higher degree of 
control over legislative action than over judicial  action because of the interplay between government 
and parliament in the preparation of legislation.  Therefore, the European Communities submits that 
the only viable means for Brazil to implement the recommendations and rulings of the DSB is through 
regulatory or legislative action.112  The European Communities sugg ests that Brazil adopt a formal 
law that would elevate the existing import ban on used tyres from the level of a portaria  to the level 
of an act of parliament. 
64. The European Communities furt her argues that Brazil could adopt provisional measures 
pursuant to Article 62 of the Constitution for a period  of two months, renewable once.  This provision 
enables the President of Brazil to declare provi sionally applicable a bill submitted to Congress, 
thereby pressing the legislature to vote on the bill ra pidly.  The European Communities submits that 
this procedure is frequently used in Brazil and can  therefore not be regarded as an "extraordinary 
measure".  The European Communities states that compliance with the recommendations and rulings 
of the DSB should give rise to comparable urgency as is regularly applied in internal matters in 
Brazil.113 
65. At the oral hearing, Brazil indicated that acts of the judiciary had to be attributed to the state 
just as acts of the legislature or of the executive.  Therefore, the judiciary, like other branches of 
power, could contribute to achieving compliance with  international obligations.  Brazil considered 
"totally misplaced" the European Communities' focus on the government's ability to control the 
achievement of the intended objective of proposed  implementation acts.  Brazil argued that the 
Federal Government could not "ensur e" that its intended results w ould be achieved, irrespective of 
whether it undertook action through the legislature or judiciary in order to implement the 
recommendations and rulings of the DSB, because bot h the legislature and the judiciary are separate 
from the executive.  Brazil stated that, even thoug h these two powers operate with a different degree 
                                                      
109European Communities' submission, para. 34. 
110Ibid., para. 57. 
111Ibid. 
112Ibid., para. 61. 
113Ibid., para. 66. WT/DS332/16 
Page 22  
 
of autonomy, there is no difference in the sense th at Brazil's Federal Government cannot guarantee a 
certain outcome either in the National Congr ess or before the Federal Supreme Court. 
66. Brazil further explained that lower courts coul d continue granting preliminary injunctions on 
certain constitutional grounds even if the ban was im posed in the form of a law.  Brazil concedes that 
if the import ban on used tyres was imposed by mean s of a formal law, then preliminary injunctions 
permitting the imports of used tyres could not be granted on the grounds that a " portaria " is not an 
appropriate instrument to implement the ban;  nor  could preliminary injunctions be granted on the 
basis that the government agency imposing the impor t ban lacked constitutional authority to do so.  
However, Brazil emphasized that lower courts coul d still grant preliminary injunctions on the grounds 
that the import ban on used tyres violated the cons titutional principle of isonomy or equality of rights, 
because imports of new tyres were allowed.  Furt hermore, lower courts could grant preliminary 
injunctions on the grounds that the import ban on used  tyres interfered with the constitutional right of 
free enterprise, because it restricted access of domestic  retreaders to supplies of raw materials.  Brazil 
explained that only a Federal Supreme Court ruling,  confirming the constitutionality of the import ban 
on used tyres with erga omnes  effect, could invalidate existing in junctions and unequivocally prohibit 
lower courts from issuing new injunctions.
114  For these reasons, enacting the import ban as a formal 
law rather than in the form of a  portaria  would not effectively prevent lower courts from granting 
preliminary injunctions on the cons titutional grounds of the principle of isonomy and the right of free 
enterprise.  Therefore, Brazil submits that provisi onal measures adopted by the President pursuant to 
Article 62 of the Constitution do not have a higher ra nk than formal laws.  According to Brazil, it 
would not appear that such measures could effectiv ely prevent lower courts from granting preliminary 
injunctions on the same constitutional grounds. 
67. In considering these arguments of the parties, I recall the premise set out above115 that, in 
principle, the implementing Member has "a measure of discretion in choosing the means of 
implementation" that it deems most appropriate.116  This discretion includes the choice of either 
withdrawing or modifying the me asure found to be inconsistent.117  It is not my task as Arbitrator to 
identify a particular means of implementation;  I am called only to determine whether the steps 
proposed by Brazil fall within the range of permissi ble actions that can be taken to implement the 
recommendations and rulings of the DSB.  At the oral hearing, Brazil did not contest that, if the 
ADPF proceeding initiated by the Federal Governme nt before the Federal Supreme Court did not 
result in the intended ruling, Brazil might have to face the consequences foreseen under Articles 21 
                                                      
114Brazil's statement at the oral hearing, para. 18. 
115Supra , para. 48. 
116Award of the Arbitrator, EC – Hormones , para. 38. (original emphasis) 
117Award of the Arbitrator, Japan – DRAMs (Korea) , para. 37;  Award of the Arbitrator, US – Offset 
Act (Byrd Amendment) , para. 50.  WT/DS332/16 
 Page 23 
 
 
and 22 of the DSU.  At the oral hearing, the European Communities did not contest that compliance 
could, in principle, be achieved by modificati on, but contended that w ithdrawing the import ban 
would be the only suitable means, since there was no certainty that alternative means would fully 
implement the DSB's recommendations and rulings a nd would achieve that result within the 15-month 
guideline set out in Article 21.3(c) of the DSU. 
68. In previous arbitrations, implementing Members have usually proposed either legislative or 
regulatory means to implement DSB recommendations and rulings.  However, I do not consider that 
implementation through the judiciary can be  a priori  excluded from the range of permissible action 
that can be taken to implement DSB recommendations  and rulings and bring about compliance with a 
Member's obligations under the c overed agreements.  The degree of  government control may well be 
different with respect to the executive, the legi slative, and the judiciary branches of power.  
Implementation action, whether it is taken by the legislature, or the judiciary, may not be executed in 
the way envisaged by the government.  Yet the possibility of failure to achieve the intended 
compliance has not been regarded by previous arb itrators as a reason to question the permissibility of 
implementation by means of legislation, nor, in my view, does it exclude judicial action from the 
range of a permissible means of implem entation.  Moreover, as noted earlier118, Brazil has pointed to 
recent decisions by the Federal Supreme Court in terpreting the constitutional right to a balanced 
environment that, in Brazil's view, give an indication as to the likely outcome of the ADPF 
proceeding. 
69. I now turn to the reasonable period of time requested by Brazil for completion of these 
proceedings before the Federal Supreme Court.  Brazil argues that the ADPF proceeding will take at 
least 34 months to complete.  Brazil requests anothe r two months to implement that decision within 
the Brazilian legal system.  This would involve notifying Brazilian courts of the Federal Supreme 
Court decision and having customs authorities withdr aw prior import licenses.  Brazil then subtracts 
15 months, which is the period between the initia tion of the ADPF proceeding on 21 September 2006 
and the adoption by the DSB of the Panel and A ppellate Body Reports on 17 December 2007.  In 
sum, Brazil submits that 21 months as of the adop tion of the Reports by the DSB is a reasonable 
period of time for implementation of the recommendations  and rulings of the DSB in this dispute, thus 
expiring on 17 September 2009.  By contrast, the Eu ropean Communities, on th e basis of its assertion 
that the only suitable means of implementation is the adoption of a formal law elevating the import 
ban on used tyres from the level of a  portaria  to the level of an act of parliament, submits that the 
reasonable period of time should be 10 months from th e date of adoption by the DSB of the Panel and 
Appellate Body Reports, that is, by 17 October 2008. 
                                                      
118Supra , para. 61. WT/DS332/16 
Page 24  
 
70. Brazil does not identify intermediate steps or time periods in the course of the ADPF 
proceeding that would add up to 34 months.  Rather, Brazil's estimate is based on the average duration 
of a sample of Ação Direta de Inconstitucionalidade  ("ADI") (Direct Unconstitutionality Action) 
proceedings that were initiated and completed betw een 1998 and 2003.  Brazil e xplains that, to date, 
only one ADPF action has been decided on the merits
119 and that it is appropriate to draw inferences 
from the average duration of ADI proceedings, because they are similar to ADPF proceedings in that 
both ADI and ADPF are procedures for the review of the constitutionality of a legal act. 
71. I do not consider that the approach of calculating the average duration of a sample of 
proceedings from a past 5-year period under a differe nt procedure than the one at issue in the present 
case provides an accurate and pertinent estimate of th e time that the Federal Supreme Court will need 
to complete the pending ADPF proceeding.  Brazil's table120 listing ADI proceedings initiated as 
of 1998 and completed by 2003 indicates that the du ration of ADI proceedings before the Federal 
Supreme Court varies enormously.  Certain ADI proceedings were completed within 3 months, 
whereas other ADI proceedings were  completed after more than 100 months.  I consider that the 
relevance of Brazil's estimate is reduced by the f act that the table does not include ADI proceedings 
that were initiated after 1999 but no t completed by 2003, or initiated after 2003.  The relevance of the 
estimates is diminished further by the fact that the ADI is not the same procedure as the ADPF at 
issue here.  In response to questions at the oral hearing, Brazil explained that the ADI procedure can be used  to challenge the constitutionality of nor mative acts of general application, while the ADPF 
procedure covers also individual decisions by auth orities.  However, decisions in both ADI and ADPF 
proceedings produce  erga omnes  effect and have binding effect on other organs of the public 
power.
121  More importantly, previous arbitrators have  refused to rely on average time periods in 
determining the reasonable period of time because an average figure "inherently" represents more 
than the shortest possible period of time necessary within an implementing Member's legal system.122  
For these reasons, I consider Brazil's estimate of the likely duration of the pending ADPF proceeding 
on the basis of an average of a sample of ADI proceedings not appropriate. 
72. Instead, I believe that an assessment of the stat e of affairs in the particular ADPF proceeding 
permits a more accurate estimation of the time required for its completion, and thus a more 
appropriate basis for determining the reasonable pe riod of time needed for the implementation of the 
                                                      
119Brazil's submission, para. 45, indicating that  this ADPF proceeding took 41 months. 
120Exhibit BRA-180 submitted by Brazil to the Arbitrator. 
121With respect to the ADI procedure, see Article 102(2) of the Brazilian Constitution and Article 28 of 
Law 9.868/99 governing the ADI procedure.  With respect to the ADPF, see Article 10 of Law 9.882/99 
governing the ADPF procedure. 
122The Arbitrator in EC – Export Subsidies on Sugar  stated "that an average or median figure 
'inherently represent[s] more than the shortest possible period of time necessary within [an implementing 
Member's] legal system'".   See also Award of the Arbitrator, EC – Hormones , para. 26.  WT/DS332/16 
 Page 25 
 
 
DSB recommendations and rulings.  I note that the Federal Supreme Court held a hearing in this 
ADPF proceeding on 27 June 2008.  Brazil confirmed at  the oral hearing in this arbitration that the 
ADPF proceeding at issue requires only one hearing be fore the Federal Supreme Court.  Brazil further 
explained that, when an ADPF case is filed with th e Federal Supreme Court, a reporting judge will be 
assigned to the case.  According to Brazil, that case will normally remain in queue, sometimes for a 
long time, without much substantive work being done  due to the great workload of reporting judges.  
However, as soon as the reporting judge turns to the particular case, the proceedings will pick up.  
Brazil submits that, with the public hearing in June  2008, this ADPF case has entered its substantive 
phase.  Brazil further explains that, when completing the report on a case, the reporting judge will ask the President of the Court to place the case on the agenda  for a decision by the plenary.  In response to 
questions at the oral hearing in this arbitration, Brazil stated, however, that it was difficult to give 
concrete estimates of the time needed by the reporti ng judge to complete the report and the date when 
the case will be placed on the agenda of the plenary,  as this will depend on the overall workload of the 
Federal Supreme Court.
123 
73. Brazil explained that, according to the Internal  Rules of the Federal Supreme Court, the 
President has certain discretion as to when a particular  case is put on the Court's agenda for voting.  In 
this respect, I recall that the implementing WTO Memb er is expected to use whatever flexibility is 
available within its legal system to ensure that  implementation takes place promptly in accordance 
with Article 21 of the DSU.124  Brazil explained that, according to Internal Rules of the Federal 
Supreme Court, the reporting judge may request the Presi dent to give priority to certain types of cases 
and that the President has discretion to grant such request.  Brazil further explained that according to 
Article 145 of the Internal Rules of the Federal Supreme Court, ADPF proceedings are eligible for 
such priority action.  The existence of such a rule  and practice demonstrates that there is flexibility to 
expedite proceedings before  the Federal Supreme Court.125  I am mindful of previous arbitrators' 
statements that recourse to "extraordinary" proceedings cannot be expected.126  Yet, in the context of 
the present case, I do not consider that treating a sp ecific case with priority at the Federal Supreme 
                                                      
123I note that in accordance with Article 78(1) of th e Internal Rules of the Fe deral Supreme Court, the 
court takes recess from 20 December to 1 January. 
124See Award of the Arbitrator, Japan – DRAMs (Korea) , para. 25 (referring to Award of the 
Arbitrator, EC – Chicken Cuts , para. 49, in turn referring to Award of the Arbitrator, Chile – Price Band System , 
para. 39;  Award of the Arbitrator, EC – Tariff Preferences , para. 36;  and Award of the Arbitrator, US – Offset 
Act (Byrd Amendment ), para. 64). 
125See also ibid., para. 47 (referring to Award of the Arbitrator, US – 1916 Act , para. 39;  Award of the 
Arbitrator, EC – Tariff Preferences , para. 36;  Award of the Arbitrator, EC – Export Subsidies on Sugar , 
para. 76;  and Award of the Arbitrator, EC – Chicken Cuts , paras. 79 and 80. 
126See ibid., para. 25 (referring to Award of the Arbitrator, EC – Chicken Cuts , para. 49, in turn 
referring to Award of the Arbitrator, Korea – Alcoholic Beverages , para. 42;  Award of the Arbitrator, Chile – 
Price Band System , para. 51;  and Award of the Arbitrator, US – Offset Act (Byrd Amendment) , para. 74). WT/DS332/16 
Page 26  
 
Court can be regarded as recourse to "extraordinary" procedures.  I further note that, on 31 January 
2008, the Government of Brazil asked the Federal S upreme Court to take note of the WTO decision 
and to expedite proceedings.
127 
74. For these reasons, I consider it reasonable to expect that the ADPF proceeding before the 
Federal Supreme Court can be co mpleted within a significantly shorter period of time than the 
21 months suggested by Brazil. 
(b) Import Regime for Retreaded Tyres from MERCOSUR Countries 
75. In order to comply with the DSB's recommendations and rulings regarding the MERCOSUR 
exemption from the import ban on retreaded tyres128, Brazil submits that it would have to negotiate a 
new regime for the importation of retreaded and u sed tyres with other MERCOSUR countries.  Brazil 
asserts that negotiating an agreement with its ME RCOSUR partners is necessary, because, if Brazil 
were to remove the MERCOSUR exemption from th e import ban on retreaded tyres, this would 
conflict with current MERCOSUR rules as inte rpreted by the MERCOSUR Ad Hoc Tribunal.  
Therefore, Brazil argues that only after negotiating a MERCOSUR-wide tyre regime can it proceed to 
bring the MERCOSUR exemption into compliance w ith its WTO obligations by incorporating an 
agreement concluded with MERCOSUR countries into its national legal system.  Brazil requests 12 
months as of the adoption of the DSB recommendati ons and rulings for designing a new tyre regime 
in an Ad Hoc Working Group for the Regional Policy on tyres created for that purpose, and the 
review and approval of that measure by the Common Market Group ("GMC") and Common Market Council ("CMC") of MERCOSUR by December 2008.  Brazil requests another six months for the approval of that measure by legislative bodies of  MERCOSUR countries.  Adding another month for 
the entry into force of the measure, Brazil requests that I determine a total of 19 months to be the 
reasonable period of time. 
76. The European Communities alleges that Brazil is , in fact, seeking to establish a regime by 
which all MERCOSUR countries ban the importation of  retreaded and used tyres from outside the 
region.  The European Communities submits that th is would not lead to compliance with the DSB 
recommendations and rulings in this dispute and that an Article 21.3(c) arbitrator cannot allot time for 
measures that obviously do not bring about complian ce.  Instead, the European Communities submits 
that compliance with the DSB recommendations and rulings concerning the MERCOSUR exemption 
                                                     
 
127Brazil's submission, para. 44. 
128See Appellate Body Report, para. 258(b)(ii).  WT/DS332/16 
 Page 27 
 
 
would merely require an actus contrarius  eliminating the exemption, which, in the European 
Communities' view, could be achieved by regulatory action within two months.129 
77. I am called upon to determine whether ne gotiating a new tyre import regime with 
MERCOSUR countries falls within the range of ac tions that can bring the measure found to be 
inconsistent into compliance, and by when this c ould reasonably be achieved.  Brazil explains that 
eliminating the MERCOSUR exemption and restori ng the original import ban on retreaded tyres 
erga omnes  would be inconsistent with  its obligations under MERCOSUR.  Therefore, it seeks to 
negotiate a new tyre regime with the other ME RCOSUR countries.  While the contours of the 
envisaged regime have not been clarified by Br azil, I do not believe that a MERCOSUR-wide tyre 
regime is outside the range of permissible action that  could, in principle, bring the measure found to 
be inconsistent into compliance with Brazil's WTO obligations. 
78. I now turn to consider the reasonable period of time required for the implementation of the 
DSB recommendations and rulings with respect to the MERCOSUR exemption from the import ban 
on retreaded tyres.  As a first step towards implementation, Brazil proposes negotiations with MERCOSUR partners, for which it requests a period of 12 months.  According to Brazil, these 
negotiations are underway in the framework of  the MERCOSUR Ad Hoc Working Group on the 
Regional Policy on Tyres established on 29 June 2008.   However, I note that these negotiations on a 
new MERCOSUR-wide tyre regime are an external process that is outside the law-making and regulatory system of Brazil.  Yet, the recomme ndations and rulings of the DSB are addressed 
specifically to Brazil and not to its MERCOSUR partne rs.  Article 3.3 of the DSU confirms that WTO 
dispute settlement is concerned with  measures taken by a particular Member.  The measure at issue, 
Portaria SECEX 14/2004, is a domestic regulatory act adopted by the SECEX, a subdivision of the 
Brazilian Federal Ministry of Development, Indus try and Foreign Trade.  The legal basis for 
Portaria SECEX 14/2004, as identified in its preambl e, is Article 15 of Annex I to Decree No. 4.632 
dated 21 March 2003, which, in turn, is a domestic legal instrument.
130  As noted by the arbitrator in 
EC – Chicken Cuts , "[b]ecause measures ... challenged originat e in the decision-making organs of a 
WTO Member's own legal system, an arbitrator un der Article 21.3(c) may reasonably expect that 
implementation would ordinarily be achieved by means entirely within the implementing Member's 
lawmaking procedures."131  This is all the more so with r espect to Portaria SECEX 14/2004, as it 
                                                      
129The Appellate Body addressed the question of the elimination of the MERCOSUR exemption from 
the import ban on retreaded tyres in the light of Article XXIV:8(a) in footnote 445 to paragraph 234 of its Report. 
130Exhibit BRA-84 submitted by Brazil to the Panel.  As noted in supra  footnote 31, in 
November 2006, Article 40 of Portaria SECEX 14/2004 was replaced by Article 41 of Portaria SECEX 35/2006, and subsequently by Article 41 of Portaria SECEX 36/2007.  These changes, how ever, do not affect the 
qualification of the measure. 
131Award of the Arbitrator, EC – Chicken Cuts , para. 51. WT/DS332/16 
Page 28  
 
contains no indication of consulta tions or negotiations with MERCO SUR partners in the process of 
adopting that  portaria . 
79. Brazil argues that the award of the arbitrator in EC – Chicken Cuts  must be distinguished 
from the present case, because th e ruling of the World Customs Organization ("WCO") sought by the 
European Communities in that case was extraneous to the Europ ean Communities' implementation 
obligations, whereas, in this case, the steps ta ken by Brazil to modify its MERCOSUR commitments 
are not extraneous.
132  I am not persuaded by this argument.  In EC – Chicken Cuts , the European 
Communities argued that "a WCO decision [was ] necessary as a prerequisite to further 
implementation internally by th e Commission because implementation of the DSB's recommendations 
and rulings [would] require the European Commission effectively to reverse certain judgments of the 
European Court of Justice".133  Therefore, the European Communities argued that "it [would] not take 
any action internally until it receive[d] a WCO decision."134  Similarly, in the present case, Brazil 
seeks to modify MERCOSUR law before taking any internal action with respect to the DSB's 
recommendations and rulings relating to imports of retreaded tyres from MERCOSUR countries.  I 
consider the situation in the present case similar to that in EC – Chicken Cuts  in the sense that, in both 
cases, the DSB recommendations and rulings "will be  no closer to being implemented unless—and 
until" Brazil takes action internally to implement them.135  In both cases, recourse to external action 
would not exonerate the Member concerned of its ob ligation to comply with the DSB rulings.  On the 
contrary, internal action by Brazil is indispen sable in the present case as it was the case in  EC – 
Chicken Cuts . 
80. Therefore, I agree with the arbitrator in EC – Chicken Cuts  that "[r]ecourse to such external 
processes will not ordinarily form part of the im plementation of the recommendations and rulings of 
the DSB", and that recourse to external decision- making "is not entitled to the same deference as in 
the case of an implementation procedure that is entirely within that Member's domestic legal 
system."136  In addition, the arbitrator in EC – Tariff Preferences  stated that "[t]he mere fact that the 
European Communities has decided to incorporate the task of implementation within the larger 
objective of reforming its overall GSP scheme cannot lead  to a determination of a shorter, or longer, 
period of time."137  Similarly, in this case, Brazil seems to envisage negotiations on new MERCOSUR 
disciplines, which seems to include a wider sp ectrum than the MERCOSUR exemption from the ban 
on retreaded tyres at issue here.  This is not to  say that I would discourage the Member concerned 
                                                      
132Brazil's statement at the oral hearing, para. 22. 
133Award of the Arbitrator, EC – Chicken Cuts , para. 50. 
134Ibid., para. 55. 
135See ibid.  See also Award of the Arbitrator, EC – Export Subsidies on Sugar , para. 81. 
136Award of the Arbitrator, EC – Chicken Cuts , para. 52. 
137Award of the Arbitrator, EC – Tariff Preferences , para. 31.  WT/DS332/16 
 Page 29 
 
 
from consulting and coordinating with its trading part ners in advance of a modification of an import 
regime, including in the context of implementing DSB recommendations and rulings that may affect 
them.  The question before me, however, is whethe r this should be recognized as a "particular 
circumstance" that should be factored into my calculation of the reasonable period of time.  In 
keeping with the premise set out by the arbitrator in  EC – Chicken Cuts , I am of the view that an 
implementing Member seeking to go outside its domestic decision-making processes bears the burden 
of establishing that "this external element of its proposed implementation is necessary for, and 
therefore indispensable to, that Member's full and effective compliance with its obligations under the 
covered agreements".138 
81. Brazil asserts that negotiating a new import regime for retreaded tyres with its MERCOSUR 
partners is a required step because of a binding  decision of the MERCOSUR Ad Hoc Tribunal with 
which alternative means of implementation would conflict.  Brazil considers that the unilateral 
elimination of the MERCOSUR exemption is not a means of implementation that it may choose 
because in order to change Brazil's legislation in this respect, MERCOSUR disciplines would need to 
be modified.  I am not persuaded by this argument of Brazil.  First, I observe that the arbitral decision 
referred to by Brazil had been taken into account  by the Panel and the Appellate Body in the 
underlying dispute.  The Appellate Body stated that: 
[B]efore the arbitral tribunal established under MERCOSUR, Brazil 
could have sought to justify th e challenged Import Ban on the 
grounds of human, animal, and plan t health under Article 50(d) of the 
Treaty of Montevideo.443  Brazil, however, decided not to do so.  It is 
not appropriate for us to second-guess Brazil's decision not to invoke 
Article 50(d), which serves a function similar to that of Article XX(b) 
of the GATT 1994.  However, Article 50(d) of the Treaty of Montevideo, as well as the fact that Brazil might have raised this defence in the MERCOSUR arbitral proceedings, show, in our view, 
that the discrimination associate d with the MERCOSUR exemption 
does not necessarily result from a conflict between provisions under MERCOSUR and the GATT 1994.
139 (original footnotes 442, 444, 
and 445 omitted) 
[original footnote 443] Treaty of Montevideo, Instrument Establishing the 
Latin American Integration Association (ALADI), done at Montevideo, 
August 1980 (Exhibit EC-39 submitted by the European Communities to the Panel).  Article 50(d) reads as follows: 
No provision under the present Treaty shall be interpreted as 
precluding the adoption and observance of measures regarding: 
... 
d.     Protection of human, animal and plant life and health; 
                                                      
138Award of the Arbitrator , EC – Chicken Cuts , para. 52. 
139Appellate Body Report, para. 234 and footnote 443 thereto. WT/DS332/16 
Page 30  
 
82. While Brazil may disagree with this stat ement, I note that the arbitrator in EC – Chicken Cuts  
found that, "[w]here the Panel and the Appellate Bo dy have expressed one view on issues relating to 
the substance of [the] dispute", an arbitrator, in fu lfilling his limited mandate, is "not free ... to express 
another".
140  The statement of the Appellate Body quot ed above does not suggest that Brazil would 
necessarily be required to work towards negotiatin g a MERCOSUR-wide tyre regime in order to 
comply with its WTO obligations while, at th e same time, respecti ng its commitments under 
MERCOSUR.  It is clear from the statement above th at the decision of the Ad Hoc Tribunal relates to 
the specific procedural circumstances of that case,  in which a particular litigation strategy was 
applied.  The decision of that Tribunal does not, and did not need to, reflect and interpret all rights and 
obligations under MERCOSUR law that are relevant  to the manner in which Brazil may choose to 
implement the DSB recommendations and rulings.141  As the arbitrator in EC – Chicken Cuts  stated, 
the Member seeking to take steps "outside its domestic decision-making processes" bears the burden 
of establishing that these external elements of its proposed means of implementation are a requirement under the law of the external system.
142 
83. In this context, I also note that Brazil ha s restricted imports of retreaded tyres from 
MERCOSUR countries by adopting CAMEX Resolu tion No. 38 of 22 August 2007, and again 
through CAMEX Resolution No. 46 of 3 July 2008143, without prior modification of MERCOSUR 
law.  Brazil conceded at the oral hearing that  the 2007 import quota had not been introduced on the 
basis of negotiations with MERCOSUR countries.   These changes were introduced through  
portarias , that is, in the form of regulatory ac tion by Brazil and not through MERCOSUR-wide 
action.  At the oral hearing, Brazil stated that  it had consulted with MERCOSUR countries prior to 
increasing the import quotas for retreaded tyres fro m certain MERCOSUR countries in July 2008.  
This, however, does not change the fact that the modification was enacted through domestic 
regulatory action. 
                                                      
140Award of the Arbitrator, EC – Chicken Cuts , para. 62. 
141At the oral hearing, Brazil further referred to the MERCOSUR Permanent Tribunal of Review 
Award No. 1/05 of 20 December 2005 concerning an import ban on retreaded tyres adopted by Argentina.  In 
that award, the Permanent Tribunal of Review rejected the defence invoked by Argentina under Article 50(d) of the Treaty of Montevideo.  I consider that this award is binding only between the parties to that dispute, 
Uruguay and Argentina;  Brazil was not a party to that dispute.  Moreover, I note that the tribunal rejected 
Argentina's defence for reasons relating to the alleged lack of proportionality of particular aspects of the 
Argentine measure.  It did not, in principle, rule ou t the applicability of Article 50(d) of the Treaty of 
Montevideo to an import ban imposed for the protection of health and the environment. 
142Award of the Arbitrator, EC – Chicken Cuts , para. 52. 
143See European Communities' submission, para. 68 (refe rring to Brazil's submission, para. 49;  Brazil's 
appellee's submission, para. 225;  and Exhibit BRA-175 submitted by Brazil to the Appellate Body); footnote 55 
to para. 68 (stating that, on 22 August 2007, Brazil a dopted Resolution No. 38 limiting imports of retreaded 
tyres from Uruguay to 130,000 and from Paraguay to 120,000 per year); and footnote 61 to para. 78 (stating that 
Brazil further increased the import quota for retreaded tyres from Uruguay and Paraguay in 2008).  WT/DS332/16 
 Page 31 
 
 
84. In this case, Brazil has referred to the deci sion of the Ad Hoc Tribunal as the reason why 
Brazil would be obliged to negotiate modified ru les with its MERCOSUR partners.  However, the 
decision of that Tribunal did not involve Article 50( d) of the Treaty of Montevideo.  Moreover, Brazil 
has introduced modifications to the MERCOSUR exem ption by mere domestic measures twice since 
the circulation of the Panel Report in this dispute.  In these circumstances, I do not believe that Brazil 
has established that negotiating such new disciplines  in the ambit of MERCOSUR is in fact required 
under MERCOSUR law.  Therefore, I do not consider that I should factor into my determination the 
time requested by Brazil for negotiations with MERCOSUR partners regarding a MERCOSUR-wide 
tyre regime. 
85. For the same reasons, I do not consider that I should factor into my calculation, as a particular 
circumstance, the time requested by Brazil for ratification by MERCOSUR countries of a new 
MERCOSUR tyres regime, its incorporation in thei r domestic legal systems, and its entry into 
force.144 
86. Having said that, I wish to clarify that I am  not suggesting that Brazil could not seek to 
negotiate a MERCOSUR-wide tyre regime with its  MERCOSUR partners.  My decision in no way is 
intended to curtail Brazil's discretion as to which means Brazil may choose to modify its import 
regime concerning retreaded tyres.  Rather, my d ecision is limited to the question whether or not I 
should factor into my determination the 19 mont hs requested by Brazil for negotiations with 
MERCOSUR countries and incorporation of the results into its legal system. 
(c) Proceeding before the Federal Supreme Court Concerning Laws 
Adopted by the State of Rio Grande do Sul 
87. With respect to the marketing prohibition and the disposal obligations concerning used and 
retreaded tyres contained in Law 12.114 of the State of Rio Grande do Sul, as amended by 
Law 12.381, Brazil seeks to implement the recommendations and rulings of the DSB through a 
different Federal Supreme Court proceeding.  Brazil explains that the Prosecutor General filed an ADI 
action with the Federal Supreme Court in Septem ber 2006 requesting the court to revoke the state 
laws on the grounds that these laws violated the dist ribution of competences be tween the Federal State 
                                                      
144In any event, even if I were to allocate time for ra tification, I could take into account only the most 
prompt ratification process and not, as suggested by Braz il, an average period.  Nor do I see a need to allocate 
time for Brazil to await entry into force pursuant to Artic le 40 of the Protocol of Ouro Preto on the Institutional 
Structure of MERCOSUR after completion of the incorpor ation process in all MERCOSU R countries.  Brazil is 
expected to use the flexibility available in its legal system in order to comply promptly with the 
recommendations and rulings of the DSB, and could implement measures on a provisional basis.  (In this respect, see supra , footnote, 81.  See also Article 62 of the C onstitution with respect to provisional measures as 
referred to in para. 66, supra , and Article 25 of the Vienna Convention on the Law of Treaties  with respect to the 
provisional application of treaties.) WT/DS332/16 
Page 32  
 
and the State of Rio Grande do Sul, and, in add ition, infringed on the fundamental constitutional right 
to a balanced environment.
145  Brazil contends that, in  view of the Federal Supreme Court's practice of 
grouping together cases with related subject-matters , this ADI action would most likely be decided 
together with the pending ADPF action relating to  preliminary injunctions permitting used tyre 
imports.  On this basis, Brazil requests me to de termine that the same period of time, that is, 
21 months, would be a reasonable period of time fo r Brazil to comply with the DSB recommendations 
and rulings relating to the measures adopted by the State of Rio Grande do Sul. 
88. The European Communities argues that, for the same reasons advanced with respect to the 
ADPF proceeding before the Federal Supreme Court concerning preliminary injunctions granted by 
lower courts, Brazil's intention to implement the relevant DSB recommendations and rulings through 
judiciary action is not a suitable means to achieve compliance and thus should not serve as the basis 
for the calculation of the reasonable period of time.   Instead, the European Communities submits that 
the reasonable period of time should be determined on the basis of the time n eeded for the State of 
Rio Grande do Sul to repeal the measure.146 
89. I understand that, in the ADI proceeding at issu e, the Federal Government has challenged the 
ban imposed by the State of Rio Grande do Sul, on the grounds that, inter alia , it infringes the 
allocation of powers between the federal and the st ate levels, and also, infringes on the fundamental 
constitutional right to a balanced environment.  I see no reason to question Brazil's assertion that, in 
view of the Federal Supreme Court's practice of grouping together cases with related subject-matters, 
this ADI action would likely be decided together  with the ADPF proceeding challenging preliminary 
injunctions by lower courts allowing imports of used tyres.  However, as I noted earlier, I do not agree 
with the method employed by Brazil for estimati ng the duration of the pending ADPF proceeding on 
the basis of the average duration of a particular sample of ADI proceedings initiated and completed 
between 1999 and 2003.  Brazil relies on the same estimate with respect to the ADI proceeding 
challenging the ban imposed by the State of Rio Gr ande do Sul.  As with the ADPF proceeding, I 
consider that this ADI proceeding can be complete d in a significantly shorter period than 21 months. 
                                                      
145Brazil identifies Articles 22(VIII), 24(VI), (VIII) an d (XII), and 225 of the Constitution. (Brazil's 
submission, footnote 78 to para. 54)  The European Communities argues that a longer period of time for 
implementation could not be justified on the basis of Ar ticle XXIV:12.  I note that Brazil has not invoked 
Article XXIV:12 of the GATT 1994 re lating to the scope of a Member's obligation to ensure the observance of 
the provisions of the GATT 1994 by regional and local governments and authorities within its territory. 
146European Communities' submission, para. 87.  WT/DS332/16 
 Page 33 
 
 
(d) Related Measures 
90. Finally, with respect to the fines imposed through Presidential Decree 3.179 as amended by 
Presidential Decree 3.919 and the application of Portaria DECEX 8/1991 to the importation of 
retreaded tyres147, I note that Brazil has not requested a particular period of time to bring these 
measures into conformity with the recommendations and rulings of the DSB.  I consider that these 
measures are accessory to and dependent upon the measu res discussed above.  Therefore, I am of the 
view that they can also be brought into comp liance within the period of time specified below. 
IV. Award 
91. In the light of the above considerations, I de termine that the reasonable period of time for 
Brazil to implement the recommendations and rulings of the DSB in this dispute is 12 months from 
the date of adoption of the Pane l and Appellate Body Reports.  Th e reasonable period of time will 
thus end on 17 December 2008. 
 
 
Signed in the original at Tokyo this 20th day of August 2008 by: 
 
  
________________________ 
Yasuhei Taniguchi 
Arbitrator 
                                                     
 
147See European Communities' submission, para. 45.