RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/212 
2 February 2009 
 (09-0400) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
BRAZIL 
 
  
 
This report, prepared for the fifth Trade Policy Review of Brazil, has been drawn 
up by the WTO Secretariat on its own responsibility.  The Secretariat has, as 
required by the Agreement establishing  the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Brazil on its trade policies and practices. 
 
Any technical questions arising from this report may be addressed to 
Mr. Angelo Silvy (tel:  022 739 5249), Mr. Alberto Bueno (tel:  022 739 6392), 
and Mr. Raymundo Valdés (tel:  022 739 5346). 
 
Document WT/TPR/G/212 contains the policy statement submitted by Brazil. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
 session of the meeting of the Trade Policy Review Body on Brazil. Brazil WT/TPR/S/212 
 Page iii 
 
 
CONTENTS 
 Page 
SUMMARY OBSERVATIONS xi 
 (1) E CONOMIC ENVIRONMENT  xi 
 (2) T RADE POLICY AND INVESTMENT FRAMEWORK  xi 
 (3) M ARKET ACCESS FOR GOODS  xii 
 (4) M EASURES AFFECTING EXPORTS  xiii 
 (5) O THER MEASURES AFFECTING TRADE  xiii 
 (6) S ECTORAL POLICIES  xiv 
I. ECONOMIC ENVIRONMENT 1 
 (1) O VERVIEW  1 
 (2) O UTPUT AND EMPLOYMENT  1 
 (3) F ISCAL POLICY  4 
 (4) M ONETARY AND EXCHANGE RATE POLICY  6 
 (5) B ALANCE OF PAYMENTS  8 
 (6) D EVELOPMENTS IN TRADE AND INVESTMENT  10 
 (i) Developments in merchandise trade 10 
 (ii) Trade in services 11 
 (iii) Foreign direct investment 11 
 (7) O UTLOOK  12 
II. TRADE AND INVESTMENT POLICY REGIME 13 
 (1) O VERVIEW  13 
 (2) G ENERAL LEGAL AND INSTITUTIONAL FRAMEWORK  13 
 (3) T RADE POLICY FORMULATION AND IMPLEMENTATION AND OBJECTIVES  15 
 (4) F OREIGN INVESTMENT REGIME  16 
(5) I NTERNATIONAL RELATIONS  19 
 (i) World Trade Organization 19  (ii) Preferentia l agreements 20 
 (6) A
ID FOR TRADE  23 
III. TRADE POLICIES AND PRACTICES BY MEASURE 26 
 (1) O VERVIEW  26 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  26 
 (i) Customs procedures and documentation 26  (ii) Customs valuation 29 
 (iii) Rules of origin 30 
 (iv) Tariffs 32  (v) Other charges affecting imports 37 
 (vi) Contingency measures 39 
 (vii) Prohibitions, restrictions, and licensing 44 
 (viii) Technical regulations and standards 48 
 (ix) Sanitary and phytosanitary measures 53 WT/TPR/S/212 Trade Policy Review 
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 Page 
 (3) M EASURES DIRECTLY AFFECTING EXPORTS  56 
 (i) Procedures and documentation 56 
 (ii) Export taxes 58  (iii) Export prohibitions, re strictions, and licensing 59 
 (iv) Export support and related tax measures 60 
 (v) Export finance, insurance, and guarantees 63  (vi) Export promotion and marketing assistance 68 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  69 
 (i) Legal framework for production and investment 69  (ii) Pricing and competition policy 71 
 (iii) State-owned enterprises, pr ivatization, and state trading 75 
 (iv) Incentives and other government assistance 76  (v) Government procurement 85 
 (vi) Intellectual property rights 89 
IV. TRADE POLICIES BY SECTOR 96 
 (1) O
VERVIEW  96 
 (2) A GRICULTURE AND FORESTRY  96 
  (i) General features, policy objectives, and administration   97 
  ( i i )  B o r d e r  m e a s u r e s         9 8  
  (iii) Domestic support measures 98   (iv) Forestry 108 
 (3) M
INING   108 
 (i) Main features 108  (ii) Regulatory framework 109 
 (4) E
NERGY   110 
 (i) Main features 110  (ii) Hydrocarbons 111 
 (iii) Ethanol 113 
 (iv) Electricity 114 
 (5) M
ANUFACTURING  117 
 (6) S ERVICES  119 
 (i) Introduction 119  (ii) Financial services 120 
 (iii) Telecommunications 128 
 (iv) Air transport 133  (v) Maritime transport and ports 138 
 (vi) Professional services 141 
REFERENCES   145 
APPENDIX TABLES  151 Brazil WT/TPR/S/212 
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TABLES 
 Page 
 
I. ECONOMIC ENVIRONMENT  
I.1 Basic economic indicators, 2003-08 2 
I.2 Sectoral data on GDP and employment 3 I.3 Financial accounts of the Central Government, FY2003-08 5 
I.4 Main monetary indicators, 2003-08 7 
I.5 Balance of payments, 2003-08 9  
II. TRADE AND INVESTMENT POLICY REGIME 
 II.1 WTO dispute settlement cases involving Brazil, January 2004-November 2008 20 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  
III.1 Summary analysis of the MFN tariff, 2008 32 
III.2 Structure of the tariff schedule, 2008 34 
III.3 Anti-dumping measures, 1 January 2004 to 30 October 2008 42 
III.4 Import prohibitions and licensing requirements, 2008 45 III.5 Export taxes, 2004-08 59 
III.6 BNDES-EXIM programmes 66 
III.7 Principal taxes applicable to companies 70 III.8 Tax exemption/reduction under the SUDAM/ ADA and SUDENE/ADENE programmes, 2002-07 77 
III.9 FINOR/FINAM/FUNRES benefits, 2002-07 79 
III.10 Constitutional fund loans, 2002-07 80 III.11 Manaus Free Trade Zone production, 2002-07 82 
III.12 Scientific and technological development support funds, 2008 83 
III.13 Overview of IPR protection, 2008 91  
IV. TRADE POLICIES BY SECTOR 
 IV.1 Main agricultural support measures and programmes 99
 
IV.2 Rural credit, 2001-07 101  
IV.3 Agricultural credit programmes admini stered by the BNDES, early 2004 103  
IV.4 Price support programmes, 2008 105 
IV.5 Traffic information and characteristics of Br azil's main air services agreements, end 2008 136 
 
APPENDIX TABLES 
 
I. ECONOMIC ENVIRONMENT 
 
AI.1 Merchandise exports by group of products, 2003-07      153 AI.2 Merchandise imports by group of products, 2003-07 154 
AI.3 Merchandise exports by trading partner, 2003-07     155 
AI.4 Merchandise imports by trading partner, 2003-07      156 AI.5 Trade in services 2003-08 157 
AI.6 Foreign direct investment by country of origin, 2003-07 158 
AI.7 Foreign direct investment by sector, 2003-07 159 WT/TPR/S/212 Trade Policy Review 
Page vi 
 
 
 Page 
 
II. TRADE AND INVESTMENT POLICY REGIME 
 
AII.1 Status of notification requirements to the WTO, May 2004-October 2008 160 
AII.2 Overview of Brazil's preferentia l trade agreements, November 2008 162 
 
IV. TRADE POLICIES BY SECTOR  
AIV.1 Summary of Brazil's speci fic commitments in individual service sectors, 2008 166 
 Brazil WT/TPR/S/212 
 Page vii 
 
 
GLOSSARY  
 
Accredited sectoral standardization bodies  Organismos de Normalização Sectorial, ONSs 
Additional Airport Tax Adicional de Tarifa Aeroportuária , ATAERO   
Additional Tax for the Renovation of the 
Merchant Marine  Adicional ao Frete para Re novação da Marinha Mercante , 
AFRMM  
Administrative Council for Economic Defence Conselho Administrativo de Defesa Econômica, CADE 
Agri-business Development Programme  Programa de Desenvolvimento do Agronegócio, 
PRODEAGRO 
Agriculture/Cattle Breeding Technology 
Development Programme  Programas de Desenvolvimento Tecnológico Agropecuário, 
PDTA 
Airspace Control Department  Departamento de Controle do Espaço Aéreo, DECEA 
Amazon Investment Fund  Fundo de Investimento da Amazônia, FINAM 
Amazon Region Development Agency  Agência de Desenvolvimento da Amazônia, ADA 
Amazon Region Development Authority  Superintendência do Desenvolvimento da Amazônia, 
SUDAM 
Annual Report Relátorio Anual 
Alternative Sources of Electric Energy 
Programme  Programa de Incentivo às Fontes Alternativas de Energia 
Elétrica, PROINFA 
Brazilian Aeronautic Registry Registro Aeronáutico Brasileiro, RAB 
Brazilian Association of Standards  Associação Brasileira de Normas Técnicas, ABNT 
Brazilian Coffee Fund  Fundo de Defesa da Economia Cafeeira, FUNCAFE 
Brazilian Electricity Regulatory Agency Agência Nacional de Energia Eléctrica, ANEEL 
Brazilian Enterprise for Airport Infrastucture Empresa Brasileira de Infra-strutura Aeroportuária, 
INFRAERO 
Brazilian Export Credit Insurance Company Seguradora Brasileira de Crédito à Exportação, SBCE 
Brazilian Export Promotion Agency Agência Brasileira de Promoção de Exportações, APEX 
Brazilian Foreign Trade Association  Associação de Comércio Exterior do Brasil, AEB 
Brazilian Health Surveillance Agency Agência Nacional de Vigilância Sanitária, ANVISA 
Brazilian Institute of the Environment and 
Renewable Natural Resources  Instituto Brasileiro do Meio Ambiente e dos Recursos 
Naturais Renováveis, IBAMA 
Brazilian Nuclear Industries  Industrias Nucleares do Brasil S.A. 
Brazilian Privatization Programme  Programa Nacional de Desestatização, PND 
Brazilian Reinsurance Institute, Instituto de Resseguros do  Brasil, IRB BRASIL Re 
Brazilian Shipping Company  Empresa Brasileira de Navegação, EBN 
Brazilian Special Export Programme Benefícios Fiscais a Programas Especiais de Exportação, 
BEFIEX 
Brazilian System for Protection of 
Competition  Sistema Brasileiro de Defesa da Concorrência, SBDC 
Central Bank of Brazil Banco Central do Brasil 
Central Bank's Electronic Declaratory 
Registry-Foreign Direct Investment  Registro Declaratório Eletrônico - Investimento Externo 
Direto,  RDE-IED 
Central Bank Information System  Sistema de Informação do Banco Central, SISBACEN 
Chamber of Foreign Trade Cámara de Comércio Exterior, CAMEX 
Civil Aviation Council   Conselho de Aviação Civil, CONAC 
Commodity and Futures Exchange  Bolsa de Mercadorias & Futuros, BM&F 
Competition among any interested parties Concorrência WT/TPR/S/212 Trade Policy Review 
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Competition among parties for projects Concurso 
Competitiveness Promotion Guarantee Fund  Fundo de Garantia para a Promoção da Competitividade, 
FGPC 
Constitutional funds for financing the north-
east, the north and the mid-west regions  Fundo Constitucional de Financiamento do Nordeste(FNE), 
Noroeste (FNO) e Centro-Oeste (FCO). 
Contribution for intervention in the economic 
domain Contribução de Incidência sobre o Dominio Econômico, 
CIDE 
Department of Commercial Defence Departamento de Defesa Comercial, DECOM 
Department of Foreign Trade Departamento de Comercio Exterior, DECEX 
Department of Sectoral Policies Management  Departamento de Gestão de Políticas Setoriais, DEGPS 
Electric Energy Commercialization Chamber  Câmara de Comercialização de Energia Elétrica, CCEE 
Electric System National Operator Operador Nacional do Sistema Elétrico, ONS 
Electronic Statement of Registration Registro Declaratório Eletrônico, RDE  
Energy Development Account Conta de Desenvolvimento Energético, CDE 
Environmental Tax  Taxa de Controle e Fiscalização Ambiental, TCFA 
Export Financing Programme Programa de Financiamento às Exportações, PROEX 
Federal Accounting Council (CFC) Conselho Federal de Contabilidade, CFC 
Federal Government Acquisition Programme  Aquisição do Governo Federal, AGF 
Federal Government Loans Programme  Empréstimo do Governo Federa, EGF 
Financial Compensation for the Exploitation 
of Mineral Resources  Compensação Financeira pela Exploração de Recursos 
Minerais, CFEM 
Financial System Organization Department Departamento de Organização do Sistema Financeiro, 
DEORF 
Financial transactions tax (IOF)  Imposto sobre Operações Financeiras, IOF 
Financing of Studies and Projects  Financiadora de Estudos e Projetos, FINEP 
Fruit Industry Development Programme  Programa de Desenvolvimento da Fruticultura, 
PRODEFRUTA 
General Services System  Sistema Integrado de Administração de Serviços de 
Administração de Serviços Gerais, SIASG 
Industrial Products Tax Imposto Sobre Produtos Industrializados, IPI  
Industrial Technology Development 
Programme  Programa de Desenvolvimento Tecnológico e Industrial, 
PDTI 
Integrated Foreign Trade System Sistema Integrado de Comércio Exterior, SISCOMEX 
Inter-Ministerial Council for Sugar and 
Alcohol  Conselho Interministerial do Açúcar e do Álcool, CIMA 
Invitation by the Administration Convite 
Inverse Auction Pregão 
Lighthouse fee  Tarifa de Utilização de FaroiS, TUF 
List of Convergence for Capital Goods Lista de Convergência de Bems de Capital, BK 
List of Convergence for the Informatics and 
Telecommunications Sector Lista de Convergência do Setor de Informática e 
Telecomunicações, BIT 
Mines and Metallurgy Secretariat  Secretaria de Minas e Metalurgia, SMM 
Ministerial Act  Portaria Brazil WT/TPR/S/212 
 Page ix 
 
 
Ministry of Agriculture, Livestock and Food 
Supply  Ministério da Agricultura, Pecuária e Abastecimiento, 
MAPA 
Ministry of Development, Industry and 
Foreign Trade Ministério do Desenvolvimento, Indústria e Comércio 
Exterior, MDIC 
Monetary Policy Committee Conselho de Política Monetária, COPOM 
National Agency for Land Transport  Agência Nacional de Transportes Terrestre, ANTT 
National Council of Fiscal Policy Conselho Nacional de Política Fazendária , CONFAZ 
National Council of Metrology, Normalization 
and Industrial Quality Conselho Nacional de Metrologia, Normalização e 
Qualidade Industrial, CONMETRO 
National Council of Private Insurance  Conselho Nacional de Seguros Privados, CNSP 
National Department of Mining Production  Departamento Nacional de Produção Mineira, DNPM 
National Development Bank Banco Nacional de Desenvolvimento Econômico e Social, 
BNDES 
National Environmental Council Conselho Nacional do Meio Ambiente, CONAMA 
National Federation of Insurance Services 
Providers  Federação Nacional das Empresas de Seguros Privados e 
de Capitalização,FENASEG 
National Food Supply Company  Companhia Nacional de Abastecimento, CONAB 
National Fund for Scientific and 
Technological Development  Fundo Nacional de Desenvolvimento Científico e 
Tecnológico, FNDCT 
National Health Agency Agência Nacional de Saúde Suplementar, ANS 
National Institute of Metrology, 
Normalization and Industrial Quality Instituto Nacional de Metrologia, Normalização e 
Qualidade Industrial , INMETRO 
National Industrial Property Institute  Instituto Nacional de Propriedade Industrial, INPI 
National Monetary Council Conselho Monetario Nacional, CMN 
National Petroleum Agency Agência Nacional do Petróleo, ANP 
National System of Metrology, Normalization 
and Industrial Quality Sistema Nacional de Metrologia, Normalização e Qualidade 
Industrial, SINMETRO 
National System of Rural Credit Sistema Nacional de Crédito Rural, SNCR 
National Telecommunications Agency  Agência Nacional de Telecomunicações, ANATEL 
Northeast Investment Fund  Fundo de Investimentos do Nordeste, FINOR 
North-East Region Development Agency  Agência de Desenvolvimento do Nordeste, ADENE 
Northeast Region Development Authority  Superintendência do Desenvolvimento do Nordeste, 
SUDENE 
Overnight Inter-bank Loans Interest Rate SELIC (Sistema Especial de Liquidação e Custodia) 
Interest Rate 
Policy of Guaranteed Minimum Prices   Política de Garantia de Preços Mínimos, PGPM 
Premium for Product Outflow Premio para Escoamento de Produto, PEP 
Private Insurance Superintendence  Superintendência de Seguros Privados, SUSEP 
Programme of Commercial and Recovery 
Forest Planting  Programa de Plantio Comercial e Recuperação de 
Florestas, PROPFLORA 
Programme to Strengthen Household 
Agriculture  Programa Nacional de Fortalecimento da Agricultura 
Familiar, PRONAF 
Regional Accounting Councils  Conselhos Regionás de Contabilidade, CRCs 
Register of Exporters and Importers Registro de Exportadores e Importadore, REI  
Register of Sale Registro de Venda WT/TPR/S/212 Trade Policy Review 
Page x 
 
 
Rural Employment and Revenue Generation 
Programme Programa de Geração de Emprego e Renda da Área Rural, 
PROGER Rural 
Rural Insurance Programme Progama Nacional de Garantia da Atividade Agropecuária, 
PROAGRO 
Rural Product Certificate Cédula de Produto Rural, CPR 
Rural Promissory Note  Nota Promissória Rural, NPR 
São Paulo Stock Exchange Bolsa de Valores de São Paulo, BOVESPA 
Secretariat for Economic Monitoring  Secretaria de Acompan hamento Econômico, SEAE 
Secretariat of Agricultural Policy  Secretaria de Política Agrícola, SPA 
Secretariat of Federal Revenue of Brazil Receita Federal do Brasil, RFB 
Secretariat of Foreign Trade Secretaria de Comércio Exterior, SECEX 
Securities Exchange Commission  Comissão de Valores Mobiliários, CVM 
Services and Merchandise Circulation Tax Imposto sobre Circulação de Mercadorias e Prestação de 
Serviços, ICMS 
Special Brazilian Registry Registro Especial Brasileiro, REB 
Special Regime for the Exportation and 
Importation of Goods Destined to the 
Exploration of Petroleum and Natural Gas Regime Aduaneiro Especial de Exportação e de Importação 
de Bens Destinados às Atividades de Pesquisa e de Lavra 
das Jazidas dePetróleo e de Gás Natural, REPETRO 
State Secretariat for Pension Funds Secretaria de Previdência Complementar, SPC 
System for Pre-registration of Suppliers  Sistema de Cadastramento Unificado de Fornecedores, 
SICAF 
System of Industrial Depots subject to 
Standardized Control  Regime Aduaneiro de Entreposto Industrial sob Controle 
Informatizado, RECOF 
Telecommunications Technology 
Development Fund  Fundopara o Desenvolvimento Tecnológico das 
Telecomunicações , FUNTTEL 
Tractor Fleet Modernization Incentives 
Programme  Programa de Modernização da Frota de Tratores Agrícolas 
e Implementos Associados e Colheitadeiras, MODERFROTA 
Universal Telecommunication Services Fund   Fundo de Universalização dos Serviços de 
Telecomunicações, FUST 
Waterways Transport National Agency  Agência Nacional de Transports Aquaviários, ANTAQ  
 
 Brazil WT/TPR/S/212 
 Page xi 
 
 
SUMMARY OBSERVATIONS 
1. Since its last Trade Policy Review in 
2004, Brazil has continued with the gradual modernization and streamlining of its trade 
regime, while also increasing average tariff 
protection.  Building on sound macroeconomic policies and previous and recent reforms, Brazil was able to take advantage of a favourable global econom ic environment to 
achieve solid economic growth but the current 
world economic slowdown presents new challenges.  In order to meet these, Brazil needs to press on with its efforts to give additional impetus to trade and investment, including lowering effective tariff protection, 
reducing the use of import prohibitions, and 
providing greater predictability to the foreign investment regime.  Solving the long-standing problem of high domestic interest rate spreads would also encourage trade and investment, 
and thus productivity.  These and other steps 
to promote market competition and an efficient allocation of resources would help Brazil sustain economic growth and continue improving the living standards of its population. 
(1) E
CONOMIC ENVIRONMENT  
2. After expanding by just 1.1% in 2003, 
the Brazilian economy grew at an annual average rate of 4.5% during 2004-07, which reflected strong domestic demand and a 
favorable external environment.  Growth 
attained an annualized rate of 6% in the first half of 2008;  however, it is expected to have slowed since, as a result of weaker global activity.  Brazil's macroeconomic policies 
have continued to focus on achieving primary 
fiscal surpluses and inflation targets.  Despite posting a primary surplus and reduced interest payments, the overall consolidated public sector has remained in deficit (2.1% of GDP in the first half of 2008).  The inflation rate 
decreased until 2007 but picked up in 2008, to 
6.4% in the twelve months to October.  Brazil maintains a floating exchange rate regime, with the exchange rate fluctuating significantly in both directions during 2003-08.  Foreign 
exchange regulations were liberalized although without resulting in a full 
convertibility of the Brazilian real. 
3. During the review period, Brazil 
posted deficits in its services and income 
balances, which were more than offset by 
trade balance surpluses.  Brazilian merchandise imports take mostly the form of manufactures.  Brazil is an important exporter of both manufactured and primary products 
and has benefitted considerably from strong 
global demand and high commodities prices.  Reflecting this, Brazilian exports performed strongly during the review period, increasing at a nominal average annual rate of almost 22% in U.S. dollars terms between 2003 and 
2007;  imports grew even faster, attaining a 
rate of 26% during the same period.  Nevertheless, Brazil's trade in goods and services as a proportion of GDP fell slightly during the period under review, to about 26% 
in 2008. 
4. Brazil is a genuine global trader, with 
considerable diversification in the geographic distribution of its exports and imports.  During the period under review, the shares of Brazil's two-way trade with the European 
Communities and the United States decreased, 
while increases were recorded in exports to Argentina and China and imports from China and certain African countries.   
(2) T
RADE POLICY AND INVESTMENT 
 F RAMEWORK  
5. Brazil considers the multilateral 
trading system to be at the core of its trade regime.  It is an original Member of the WTO, and an active participant.  As such, Brazil has 
submitted numerous proposals to various 
WTO bodies and took part in the GATS negotiations on telecommunications and on financial services.  In contrast, however, Brazil did not ratify the Fourth Protocol, on telecommunications, and, as at November 
2008, was still in the process of ratifying the 
Fifth Protocol, on financial services.  Brazil has made a large number of notifications to the WTO but as at end 2008 certain notifications were yet to be submitted, for instance under WT/TPR/S/212 Trade Policy Review 
Page xii 
 
 
the Agreement on Agriculture.  Since its last 
Review, Brazil had recourse to the WTO dispute settlement mechanism on one occasion as a complainant and on two occasions as a 
defendant.  Brazil has been participating 
actively in the development of the Aid-for-Trade process, playing a twofold role, both as recipient and as donor. 
6. Brazil considers preferential trade 
agreements as a valuable complement to the 
multilateral trade system.  It is a full member of the Southern Common Market (MERCOSUR).  Although this is by far Brazil's most important preferential agreement in terms of value of trade, only some 10% of 
its merchandise trade takes place with 
MERCOSUR members.   
7. As part of MERCOSUR, Brazil has 
preferential trade agreements with Bolivia, Chile, Colombia, Cuba, Ecuador, Mexico, 
Peru, and Venezuela.  Brazil also has bilateral 
preferential agreements with a few LAIA members.  Also as part of MERCOSUR, Brazil is at different stages of negotiating or ratifying preferential trade agreements of diverse scope with Egypt, the European 
Union, the Gulf Cooperation Council, India, 
Israel, Jordan, Morocco, the Southern African Customs Union and Turkey. 
8. No major changes have been 
introduced to Brazil's foreign investment 
regime during the period under review.  
Foreign and Brazilian investors receive in principle the same treatment but specific laws may impose restrictions on foreign investment;  thus, foreign participation is restricted in areas 
such as rural property, health, the mass media, 
as well as maritime and air transport.   
9. Brazil has signed bilateral investment 
agreements with several countries, including within MERCOSUR;  however, none of these agreements is in force due to concerns 
expressed in Congress about their 
constitutionality.  In view of the scope in the national legislation to restrict foreign investment, and Brazil's limited international obligations in this area, accepting new GATS commitments would allow Brazil to enhance 
the predictability of its investment regime. 
(3) M
ARKET ACCESS FOR GOODS  
10. Brazil has continued to take gradual 
steps to simplify and modernize its customs 
procedures.  For example, it introduced an express import declaration regime for frequent importers, and streamlined inspection procedures.  
11. Brazil increased overall tariff 
protection;  the simple average applied MFN tariff rose from 10.4% in January 2004 to 11.5% in January 2008.  This was mainly due to an increase of 1.1 percentage points in the average tariff of non-agricultural products to 
11.6%;  the average for agricultural products 
(WTO definition) remained practically constant, at 10.1%.  The highest rate of 35% applies to 4% of all tariff lines, including tyres, textiles, clothing, and motor vehicles.  
Brazil's tariff structure still shows low 
dispersion but the presence of tariff peaks and escalation increases the effective rates of tariff protection.  All tariffs applied by Brazil are ad valorem .   
12. Brazil's entire tariff schedule is bound 
at an average of 30.2%.  Reducing bound rates 
to close the gap between them and applied tariffs would further increase the predictability of Brazil’s trade regime. 
13. Brazil continues to be an active user of 
anti-dumping (AD) measures.  At end-October 
2008, it had 63 AD measures in force, affecting the exports of  23 trading partners.  
Most of these measures take the form of specific duties;  the average duration of an AD 
measure in place is some 6.4 years.  The 
number of AD investigations initiated and of provisional AD measures applied since 2004 has increased compared with the previous review period, but the number of new definitive AD duties (28) was only marginally 
higher.  Brazil also has two countervailing 
measures in force.  Since 2002, it has applied one safeguard measure, on grated coconut;  Brazil WT/TPR/S/212 
 Page xiii 
 
 
this safeguard is not applied to MERCOSUR 
members nor to most developing countries.   
14. Brazil imposes import prohibitions on 
virtually all used consumer goods, including 
motor vehicles, as well as on certain grapes 
and grape juices to be used in the production 
of wine, and wine transported in containers larger than five litres.  Brazil uses both automatic and non-automatic licences;  the 
latter affect slightly more than one third of all 
tariff lines.  Licences are not issued for the importation of retreaded tyres, except from MERCOSUR;  this exception was found inconsistent with multilateral rules by a WTO Panel. 
15. Since Brazil's last Review, there have 
been only a few changes in the legal and institutional framework governing technical regulations and sanitary and phytosanitary (SPS) measures;  among other changes, 
guidelines were introduced for the adoption of 
technical regulations and new rules issued for genetically modified organisms.  The authorities indicated that they are taking steps 
to ensure that notifications for both technical regulations and SPS measures are made within 
the multilaterally recommended periods. 
(4) M
EASURES AFFECTING EXPORTS  
16. No major modifications have been 
made to Brazil's export procedures since its previous Review, except for the abolition of 
the need for exporters to engage in foreign 
currency sale contracts.  Brazilian legislation allows for the application of an export tax of 30%, which can be decreased or increased (up to 150%).  Taxes may in principle be applied 
to all exports, but in practice are levied only 
on leathers and skins, arms and  ammunition, and cigarettes.  Exports of dual-use goods are subject to non-automatic licences.   
17. Brazil seeks tax neutrality for its 
exports through schemes such as drawback 
systems, and no indirect taxation on exports. 
18. Brazil implements a number of 
financing, insurance, and guarantee schemes aimed at promoting exports.  The Export 
Financing Programme (PROEX) is one of Brazil’s main tools to support exports.  The Programme is aimed at providing access to 
credit to companies that would otherwise have 
difficulties obtaining it, or would be able do so only at the high market interest rates prevailing in the domestic economy.  The manner in which PROEX was applied to 
aircraft exports was challenged in the WTO, 
and its procedures were modified twice during the period under review after the DSB determined that they constituted an export subsidy.  In certain cases, the BNDES-EXIM programme provides preferential export 
credits linked to domestic content. 
(5) O
THER MEASURES AFFECTING 
 T RADE  
19. Assistance to production and 
investment in general is granted mostly 
through official credit.  Some 30% of total 
credit in 2008 went to earmarked activities, with the national development bank (BNDES) managing more than half of it.  Such credit is made available at rates significantly below the interest rates preva iling in the domestic 
market;  in some cases official credit is linked 
to local-content requirements.   
20. Brazil has notified to WTO that a 
number of regional assistance programmes provide subsidies for the development of 
particular regions, and for research and 
development.  Incentives for regional development are also provided through the free-trade zones regime. 
21. During the review period, Brazil has 
strengthened its competition policy regime, 
but challenges remain in its implementation.  New legislation is under consideration to enhance the powers of the competition authority, including to conduct pre-merger examinations.  The legal framework for 
production and investment is somewhat 
complex due to the large number of taxes, incentive schemes, and procedures.  Measures to reduce tax complexity and to eliminate distortions and fiscal competition, among WT/TPR/S/212 Trade Policy Review 
Page xiv 
 
 
other tax reforms, could produce large 
economic gains. 
22. The State controls a significant 
number of entities covering a wide range of 
activities.  State ownership reflects a policy 
decision that government control is appropriate to accomplish strategic objectives while not excluding privatization.   
23. Brazil has taken steps to increase 
transparency in its government procurement 
regime.   Procurement is based on best-price criteria when tendering is used, although in practice over 40% of procurement contracts take place under some kind of waiver from tendering requirements.  In general national 
treatment is afforded to foreign suppliers 
legally established or represented in Brazil except when deciding between identical offers.  A preference margin of up to 10% for micro and small enterprises was introduced in 2006.  
Brazil is a not a party to the GPA;  joining it 
would increase the predictability of its trade regime and could result in benefits to taxpayers by reducing procurement costs, and to the domestic producers that could realistically compete for contracts in foreign 
markets.   
24. Brazil's legislation covers all the major 
aspects mentioned in the TRIPS Agreement.  In 2007, Brazil passed new legislation on layout designs of integrated circuits.  Parallel 
imports of goods embodying IPRs covered by 
the Industrial Property Law are not allowed, while decisions on para llel imports covered by 
the Copyright Law are taken on a case-by-case basis.  Brazil issued one compulsory licence 
for an anti-HIV drug, which allows the 
importation of generic ve rsions of the drug or 
the manufacture of a domestic version at government laboratories. 
(6) S
ECTORAL POLICIES  
25. Agricultural production has a 
relatively low level of tariff protection but is 
supported through several domestic assistance programmes, with many aimed at providing low cost credit, especially to small-scale farmers.  Guaranteed prices for a number of 
products are also used to support agriculture.  Although the value of assistance to agriculture in Brazil is low compared with the average in 
OECD countries, the interventions in both the 
credit and agricultural domestic markets are distorting forms of support.  Moreover, this assistance could affect global markets of agricultural products for which Brazil is a 
large exporter. 
26. Private companies established in 
Brazil are allowed to take part, through concessions, in the petroleum and gas sector.  In practice, state-controlled PETROBRAS has a dominant position in the sector, holding 
virtually all of Brazil's refining capacity and 
being the key price-setter for petroleum-based fuels in the domestic market.  The granting of exploration and extraction concessions, and the construction of PETROBRAS' new oil 
platforms are contingent upon local-content 
requirements.  Discussions are under way on possible changes to the sector's regulatory framework in the light of recent petroleum discoveries.  The State also has a dominant presence in the electricity sector. 
27. Brazil has historically given priority to 
the development of its manufacturing sector.  To this end, it provides favourable conditions for long-term financing as well as assistance through border measures, such as tariff peaks 
and tariff escalation, and internal instruments 
like tax concessions.  It would be important to ensure that industrial policy does not make it more difficult for other sectors to attract factors of production, thus hindering their 
growth.  Moreover, reducing the levels of 
effective tariff protection would help reduce consumer prices, and encourage greater productivity, in particular in industries where Brazilian producers are already world-class players.   
28. The services sector accounts for 
almost two thirds of Brazil's GDP.   Brazil is a net importer of services, and runs a traditional deficit in the services account.  Brazil's specific commitments under the GATS cover 
only 38 of the 160 services subsectors or 7 of Brazil WT/TPR/S/212 
 Page xv 
 
 
the 12 broad areas defined in the Services 
Sectoral Classification List.  
29. As noted, Brazil has not ratified the 
Fifth Protocol but amendments made in 2007 
to its insurance legislation may make this 
possible.  Among other things, the amendments allow, under certain conditions, the cross-border supply of insurance services, which was forbidden before.  Although in 
practice the establishment of new foreign 
financial institutions is allowed, this requires 
approval by Presidential Decree.   
30. The degree of financial intermediation 
in Brazil increased during the period under review.  Interest rates spreads were reduced 
but, at some 28 percentage points in 
November 2008, remain wide.  Moreover, medium and long-term financing in Brazil is available almost exclusively from state banks, at interest rates considerably below those that 
would likely prevail under free-market 
conditions.  These palliative measures are no substitute for identifying and correcting the causes of the high cost of credit in Brazil.   
31. Brazil has no GATS specific 
commitments in the telecommunication sector.  
Although the Executive Branch has the right to 
limit new foreign participation in telecoms, in practice any company regardless of the origin of capital has been allowed to invest in the sector.  Foreign participation in paid cable 
television services is limited to 49% of voting 
shares.  Brazil's telecom regulatory structure follows international best practice, and during the review period the authorities aimed to improve it by introducing several changes.  
Strengthening the regulatory agency would 
consolidate this process. 32. Brazil's air transport sector continued 
to face problems during the period under review.  Market concentration remains high, which may reflect in part the requirement that 
domestic air transport be provided only by 
companies managed by Brazilians and in which 80% of voting rights are in Brazilian hands.  All major airports are owned and operated by the State.  Moreover, in spite of 
revisions to make them more flexible, Brazil's 
bilateral air agreements establish relatively strict conditions for the provision of services.  Consumers may, benefit from measures to foster greater competition and service quality, including the relaxation of existing restrictions 
on foreign investment. 
33. In principle, only Brazilian flag 
vessels may engage in cabotage activities or in the transportation of:  public entities' cargoes;  goods benefiting from official fiscal or credit 
programmes;  and imports and exports of 
crude oil and derivatives produced in Brazil.  Brazil requires reciprocity in international maritime transportation services.  Brazil applies a tax, the AFRMM, on the cost of maritime freight;  the rate applied on 
international routes is 25% while that on 
cabotage is 10%, with exports excluded from the tax.  The tax does not apply to operators from countries with which Brazil has agreements in this respect.  Proceeds from the 
AFRMM are used to finance the domestic 
shipbuilding industry, with financing subject in some cases to local-content requirements.  Brazil collects a lighthouse fee (TUF) exclusively on foreign flag vessels.