Brazil WT/TPR/S/212 
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 II. TRADE AND INVESTMENT POLICY REGIME 
(1) OVERVIEW  
1. Brazil considers the multilateral trading system to be at the core of its trade regime, and 
preferential agreements as complements to the system.  Brazil is an original Member of the WTO, and 
one of its most active participants.  As such, Brazil has submitted numerous proposals to various 
WTO bodies and took part in the GATS negotiati ons on telecommunications and on financial 
services.  However, Brazil did not ratify the Fourth  Protocol, on telecommunications, and, is still in 
the process of ratifying the Fifth Protocol, on fina ncial services (as at November 2008).  Brazil has 
made a large number of notifications to the WTO bu t certain notification requirements are yet to be 
fulfilled, for instance under the Agreement on Agricultu re.  Since its last review in 2004, and as at 
September 2008, Brazil has had recourse to the WTO dispute settlement mechanism on one occasion 
as a complainant and on two occasions as a defendant. 
2. Brazil is a full Member of the Southern Co mmon Market (MERCOSUR), and as part of 
MERCOSUR it has preferential trade agreements with Bolivia, Chile, Colombia, Cuba, Ecuador, 
Mexico, Peru, and Venezuela.  Brazil also has a number of bilateral preferential agreements with 
other LAIA members.  A Free Trade Agreement between MERCOSUR and Israel is pending 
ratification (November 2008).  As part of MERCOSU R, Brazil has signed a partial scope agreement 
with India, concluded negotiations of a partial scope agreement with the South African Customs 
Union (SACU), and is negotiating preferential trade agreements with Egypt, the Gulf Cooperation 
Council (GCC), Jordan, Morocco, and Turkey.  Th e negotiation of an Association Agreement 
between MERCOSUR and the European Union, in cluding a Bi-regional Free Trade Agreement, 
remains on MERCOSUR's agenda. 
3. No major changes were introduced to Brazil's foreign investment regime during the period 
under review, with the exception of the unification and review of foreign exchange regulations.  
Foreign and Brazilian investors receive the same tr eatment unless restrictions are imposed on foreign 
investment by a specific law.  Thus, foreign part icipation is restricted in activities such as rural 
property, health, telecommunications, the mass media,  as well as maritime and air transport.  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 with respect to 
their constitutionality. 
4. Brazil, a member of the WTO Task Force, has been participating actively in the development 
of the Aid-for-Trade (AFT) process.  Brazil is bot h a recipient and a donor in the AFT initiative. 
(2) GENERAL LEGAL AND INSTITUTIONAL FRAMEWORK  
5. The Federative Republic of Brazil is formed by the union of the 26 states, the municipalities, 
and the Federal District (which together form "the Union").1  Executive power is exercised by the 
President, aided by the Cabinet of Ministers.  The President holds office for four years and may be re-
elected for an additional four-year term.  The last election took place in October 2006.  The Cabinet of 
Ministers is appointed by the President. 
6. Legislation is drafted and issued  at the federal, state, and municipal levels by the respective 
legislative bodies.  Under the Constitution, legisla tion in a number of areas must be drafted and 
passed at the federal level;  these areas include foreign trade, telecommunications, insurance, 
                                                      
1 Article 1 of the 1988 Federal Constituti on of the Federative Republic of Brazil. WT/TPR/S/212 Trade Policy Review 
Page 14 
 
 
 maritime and air transport, credit policy, monetary  issues, and utilities (Article 22).  On the other 
hand, federal and state laws may be issued concu rrently on education, health, and social security 
(Article 24).  In accordance with Article 30 of the Constitution, municipalities may only issue legislation on matters of local inte rest and to supplement federal and state legislation where pertinent.  
Each federative body drafts its tax legislati on in accordance with its constitutional competence. 
7. Legislative power at the federal level is vest ed in and exercised by the National Congress, 
composed of the Chamber of Deputies and the Fe deral Senate.  Deputies are elected in states, 
territories, and the Federal District for a period of four years;  their number is proportional to their 
jurisdiction's population.  Each state and the Federal Di strict elect three Senators for a term of office 
of eight years.  One third of the representation of each state and two thirds of the Federal District 
representatives are renewed every four years, altern ately.  Congress has responsibility for legislating 
on all matters within the competence of the Unio n.  Congress is also responsible for approving 
international treaties.
2 
8. The judiciary comprises the Supreme Federal Court,  the Superior Court of Justice, the Federal 
Regional Courts and Federal Judges, a nd other special courts and judges. 
9. The legislative process includes preparati on of:  amendments to the Constitution;  
supplementary laws;  ordinary laws ;  delegated laws;  provisional measu res;  legislative decrees;  and 
resolutions.  The main law of the State is the 1988 Constitution, which h as been amended 56 times 
since its promulgation in October 1988 (as at Se ptember 2008);  14 of these amendments have been 
made since the beginning of 2004.3   
10. Supplementary laws complement and regulate specific provisions of the Constitution and may 
be voted only when the Constitution calls for them;  they have a higher legal standing than ordinary 
laws.  Supplementary laws must be approved by ab solute majority of the members of each House.  
Ordinary laws must be approved by majority vote, wh en an absolute majority of members is present.  
Delegated laws are prepared by the President  on delegation from the Congress;  since the 1988 
Constitution was promulgated, only two de legated laws have been drafted. 
11. Article 62 of the Constitution allows the use of  provisional measures on issues considered to 
be of importance and urgency.  Pr ovisional measures are issued by the President and become effective 
upon publication;  they are analysed by Congress only upon enactment and should be voted on within 60 days, renewable once for the same period, failing wh ich, they lapse.  Provisional measures have 
the same legal status as ordinary laws, and are used very widely, since many laws in Brazil originate 
as provisional measures.  Provisional measures cr eating or increasing taxes may only affect the 
following year's budget if converted into law before the end of the fiscal year in which they were 
issued.
4  However, there are some exemptions:  the ru le does not apply to customs duties on imports, 
export taxes, the tax on industrial products (IP I), the financial operati ons tax (IOF), or to 
extraordinary taxes created in case of war.  Legisl ative decrees, which are administrative in nature, 
enact Congress deliberations on matters of its comp etence.  Legislative decrees are approved by a 
simple majority in Congress and do not need the sanc tion of the President;  they have the same legal 
status as ordinary laws. 
                                                      
2 Federal Constitution, Title IV  (Chapter I, Section II). 
3 Brazilian Government online information.  View ed at:  https://www.planalto.gov.br/ccivil_03/ 
Constituicao/Emendas/Emc/quadro_emc.htm.  There is a link to each one of these amendments (in Portuguese). 
4 Constitutional Amendment No. 32 of 11 September 2001.  Viewed at:  http://www.planalto.gov.br/ 
ccivil_03/Constituicao/Emendas/Emc/emc32.htm. Brazil WT/TPR/S/212 
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 12. International treaties and conventions must be approved by Congress to enter into force 
domestically.  After enactment, through a legislative decree, international treaties have the same legal 
status as ordinary laws;  their revocation takes plac e only when deemed incompatible with the Federal 
Constitution through an express decision  of the Supreme Federal Court. 
(3) TRADE POLICY FORMULATION AND IMPLEMENTATION AND OBJECTIVES  
13. The formulation, adoption, coordination, a nd implementation of trade policy in goods and 
services is the responsibility of the Chamber of Foreign Trade (CAMEX), created in 1995;  its 
functions are specified by Decree No. 4,732 of 10 June 2003, which gave it responsibility for policy 
formulation.  The CAMEX is part of the Governme nt Council of the Presidency of the Republic;  its 
main decision-making body is the Council of Minist ers, comprising of the Minister of Development, 
Industry and Foreign Trade, who chairs it;  and the Mi nisters of the Civil House;  Foreign Affairs;  
Finance;  Planning, Budget and Administration;  Agriculture and Supply;  and Agrarian Development.
5  
14. The CAMEX coordinates the implementation of its decisions, but each ministry remains 
responsible for implementing matte rs within its competence.  Other public bodies must consult the 
CAMEX on decisions related to trade policy issues, with the exception of financial market issues 
within the competence of the National Monetary Council and the Central Bank. 
15. The Ministry of Development, Industry and Foreign Trade (MDIC) is in charge of 
implementing trade policy, according to the guidelines devised by the CAMEX, through the 
Secretariat of Foreign Trade (SECEX), which is divided into four departments:  Foreign Trade 
Operations (DECEX);  Trade Remedies (DECOM);  International Trade Negotiations (DEINT);  and 
Planning and Development of Foreign Trade Policies (DEPLA).  The Ministry of External Relations 
assists the CAMEX in formulating foreign policy on, inter alia , regional integration and trade, and is 
the representative to the WTO in Geneva.  The Mi nistry of Finance formulates and implements 
economic policy;  it is in charge of customs a nd tax policy and administration, inspection, and 
revenue collection.  Private-sector participation in  trade policy formulation is institutionalized by 
means of periodic meetings of the CONEX (the CAMEX Private Sector Advisory Council), and 
through several sectoral competitiveness fora.  
16. Regional integration, adoption of  fairer economic and trade rules, and democratization of 
decision-making bodies are essential elements of Brazil's foreign policy.6  Brazil's view is that 
international trade is fundamental for economic de velopment and that the multilateral trading system 
should contribute to fair  and equal development.7  Brazil's broad trade policy objective is, hence, to 
use trade to foster sustainable economic grow th.  Regional economic integration and export 
promotion and diversification are important policy targets.  Brazil considers unhindered access for its 
agricultural products to the world's largest markets in dispensable for the creatio n of wealth and social 
progress.  Brazil supports enhancing south-south trade, while recognizing the need for more flexible 
                                                      
5 Ministry of Development, Industry and Foreign Trade online information.  Viewed at:  
http://www.desenvolvimento.gov.br/sitio/intern a/interna.php?area=1&menu=1497&refr=433. 
6 Folha de São Paulo, An Assessment of Five Years of Brazilian Foreign Policy , by Ambassador Celso 
Luiz Nunes Amorim, Minister of External Relations, 30 December 2007.  Viewed a t:  http://www.mre.gov.br/ 
ingles/politica_externa/discursos/discur so_detalhe3.asp?ID _DISCURSO=3231.  
7 UNCTAD (2008). WT/TPR/S/212 Trade Policy Review 
Page 16 
 
 
 rules for developing countries at the multilateral level.8  At the regional level, Brazil's major trade 
objective continues to be to rein force the MERCOSUR customs union. 
(4) FOREIGN INVESTMENT REGIME  
17. Foreign investment is regulated by Law No . 4,131 of 3 September 1962 (Foreign Capital 
Law)9, as modified by Law No. 4,390, of 29 August 1964 and other amendments.  Constitutional 
amendments passed in 1995 eliminated the distinc tion between foreign and national capital, and the 
Constitution now mandates the same legal treatment  for national and foreign capital invested in 
Brazil, under the same circumstances, and prohibits all forms of discrimination not explicitly foreseen 
in the law. 
18. The Federal Government has established program mes and mechanisms to facilitate foreign 
investment, especially in sectors that are seen as helping to improve Brazil's international competitiveness, spur long-term growth, and achieve  objectives of the Government’s accelerated 
growth programme (PAC) under the latest Multiyear Plan.  Under the new Multiyear Plan 2008-2011, policy efforts continue to be geared towards improving the business and regulatory environment for 
investment.
10  The Federal Government's actions are aimed at fostering investment in infrastructure 
and technology-intensive sectors.  However, no specif ic incentives are offered to foreign investors by 
the Federal Government. 
19. Foreign investments are not subject to prelim inary review or verification by the Central 
Bank.11  Registration of foreign direct investment (FDI) with the Central Bank continues to be 
mandatory through the Electronic Statement of Registration – Foreign Direct Investment Module 
(RDE-IED) of the Central Bank’s Information Syst em (SISBACEN).  Registration is required for 
remittances abroad, to repatriate invest ed capital, and to reinvest profits.12  Foreign capital in national 
currency must also be registered with the Central Bank of Brazil.13  No preliminary authorization is 
needed to invest in national currenc y, if registered in the RDE-IED. 
20. Foreign investors in financial institutions must  obtain authorization, through a Presidential 
Decree, prior to registration in the RDE-IED.14  Foreign currency investments must be registered in 
the currency in which they were made.  Foreign ex change regulations for fi nancial institutions were 
unified in 2005.15 
21. Once registered, there are no restrictions on the remittance of profits, and the repatriation of 
capital requires no further authorization.  Profit re mittances and repatriati on of initial capital are 
exempted from income tax withholding.  Capital ga ins repatriation is subject to 15% income tax 
                                                      
8 UNCTAD (2008). 
9 As further regulated and put into effect by Decree No. 55,762 of 17 February 1965, as amended. 
10 The Multiyear Plan 2008-2011 was enacted by the Brazilian Congress through Law No. 11,653 of 
7 April 2008.  
11 Central Bank of Brazil Circular No. 2,997 of 15 August 2000.  Viewed at: 
https://www3.bcb. gov.br/normativo/prepararPesqui sa.do?method=prepararPesquisa. 
12 Brazil Trade Net (2007). 
13 Law No. 11,371 of 26 November 2006. 
14 Regulations to Circular No. 2,997 of 15 August  2000.  Viewed at:  http://www4.bcb.gov. 
br/NXT/gateway.dll?f=templates&fn=de fault.htm&vid=nmsDececLegis:idvDececLegis.  
15 Central Bank Resolution No. 3,265 of 4 March 2005, revoked and replaced by CMN 
Resolution No. 3,568 of 29 May 2008, unified the free rate and floating rate exchange markets and regulations.  
Viewed at:  https://www3.bcb.gov.br/. Brazil WT/TPR/S/212 
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 withholding.16  When capital is repatriated, the Cent ral Bank examines whether the sum involved 
complies proportionally with foreign investor participation in the net worth stated by the company.17 
22. National Monetary Council (CMN) Resolution No. 2,689 of 26 January 2000 regulates non-
resident investment in Brazilian financial and cap ital markets, including acquisition of shares of 
Brazilian companies.  To access these markets, the foreign investor must appoint a representative and 
register with the Central Bank of Brazil and the Brazilian Securities Commission (CVM).  Funds properly registered in the RDE-Portfolio Modul e of the SISBACEN can be transferred across 
different types of financial instruments without rest riction.  Securities belonging to foreign investors 
must be kept in custody in Brazil. 
23. In accordance with Law No. 10,833 of 29 D ecember 2003, since 1 February 2004, the 
acquirer (whether resident or non-resident) of asset s located in Brazil belonging to a non-resident, is 
responsible for the withholding and payment of th e income tax applicable to capital gains.  Any 
capital gain obtained in Brazil by a non-resident is s ubject to the same income tax rules applicable to 
residents. The foreign purchaser of an investment al ready registered with the Central Bank of Brazil is 
entitled to register the capital under his name in the same amount (number of shares) previously held 
by the selling part.
18 
24. FDI through importation of tangible assets, without  initial disbursement of foreign currency, 
requires RDE-IDE registration within 90 days once go ods have cleared customs, and does not require 
prior approval by the Central Bank of Brazil.  Fo reign investment through importation of intangible 
assets without initial disbursement of foreign currency, requires prior approval from the 
Central Bank.19 
25. Brazil's regulations do not allow foreign partic ipation in nuclear energy, health services 
(except insurance), hydraulic power genera tion, or postal and telegraph services. 
26. Purchase of property by foreigners in border areas requires authorization from the 
General Secretariat of the National Security Council.  Only 50 units of undefined exploration units of 
rural property (módulo de exploração indefi nida) can be acquired by foreigners.20  Exemptions may 
be granted through a presidential decree.  Any fishi ng activities within the Brazilian territorial waters 
must be authorized by the Special Secretariat fo r Aquaculture and Fisheries.  Authorizations are 
granted to Brazilian nationals, foreigners who are r esident in Brazil, and to companies established and 
registered in Brazil, regardless of the origin of th eir capital.  Private participation in the prospecting 
and extraction of mineral resources and a number of activities in the hydrocarbons sector are subject 
to specific requirement s (see Chapter IV(4)). 
27. Management, as well as 70% of the capital,  of newspapers, magazines, and other 
publications, and of television and radio networks is reserve d for Brazilians, including those 
naturalized for more than ten years.  Postal servic es such as pick-up, transport, and delivery of letters, 
postcards, and grouped correspondence, issuance of stamps and other postage  payments forms, as 
well as telegraph services, are under Federal Gove rnment monopoly.  Courier services may be 
provided by enterprises operating in Brazil under Brazilia n legislation.  Restrictions apply to foreign 
participation in cable TV services and various satellite-related activities (Chapter IV(6)(iii)). 
                                                      
16 Brazil Trade Net (2007). 
17 Brazil Trade Net (2007). 
18 Brazil Trade Net (2007). 
19 Brazil Trade Net (2007). 
20 Decree No. 74,965 of 26 November 1971. WT/TPR/S/212 Trade Policy Review 
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 28. Prior to the entry into effect of Law No. 11,442/2007, foreign investor participation in 
companies providing highway freight transport was limited to no more than one fifth of the capital stock with voting rights.  International road transport is reserved to companies with more than half of 
their capital with voting rights held by citizens of  the seven member countries of the International 
Land Transport Agreement of the Southern Cone countries.
21  Only companies established in Brazil 
can participate directly in domestic public air tr ansportation services;  foreign participation in 
domestic airline companies is limited to 20% of the voting shares (Chapter IV(6)(iv).22  O n l y  
corporations or Brazilian individuals established in the country with principal domicile in Brazil may 
own Brazilian flag vessels (Chapter IV(6)(v)).23 
29. Foreign investors can operate in the Brazilian financial sector only if recognized as being in 
the interest of the country and a presiden tial decree is granted (Chapter IV(6)(ii)).24 
30. Brazil has signed 14 bilateral i nvestment agreements (BITs)25,  and has negotiated two 
MERCOSUR protocols on investment:  the Buenos Aires Protocol (extrabloc)26, and the Colonia 
Protocol (intrabloc).27  However, none of these agreements is in force, either because the Executive 
did not submit the agreement to Congress (e.g. Colonia Protocol) or because it withdrew the 
agreement before Congress had voted (e.g. Buenos Ai res protocol and the BIT with France).  This 
reflects the important concerns held in Congress a bout the constitutionality of the agreements with 
respect to issues such as upholding the principle of full equality for investors under the law.   
31. The authorities note that concerns raised by Congress concerning the BITs signed by Brazil 
included:  (i) the preferential treatment accorded to  foreign investors as a result of the BITs dispute 
settlement mechanisms;  (ii) the broad definition of  investment contained in the BITs;  (iii) the 
requirement in the BITs of prompt payment of e xpropriations in freely convertible currencies, which 
was considered incompatible with the Federal C onstitution, which specifies that expropriations for 
reasons of agrarian reform are to be compensated  by Agrarian Reform Bonds, for example;  and 
(iv) the ambiguity caused by the concept of indirect expropriation. 
32. Brazil has signed and maintains double ta xation agreements with 28 countries.28  Germany 
terminated its tax treaty with Brazil as of 1 January 2006.29 
                                                      
21 The ATIT (ALADI/AAP/A14TM/3) is a partial scope  agreement subscribed under the framework of 
the Treaty of Montevideo of 1980 of the La tin America Integration Association (LAIA). 
22 Law No. 7,565 of 19 December 1986. 
23 Law No. 9,432 of 8 January 1997. 
24 The information requirements that must be submitte d when filing for application to operate are listed 
in Central Bank Circular No. 3,317 of 29 March 2006.  
25 Brazil has signed BITs with:  Belgium-Luxembourg, Chile, Cuba, Denmark, Finland, France, 
Germany, Italy, the Republic of Korea, the Netherlands, Portugal, Switzerland, the United Kingdom, and 
Venezuela (ICSID Database of Bilateral Investment Trea ties.  Viewed at:  http://icsid. worldbank.org/ICSID/ 
FrontServlet?requestType=ICSIDPublications RH&actionVal=ViewBilateral&reqFrom=Main). 
26 MERCOSUR Decision No. 11/94, Protocol on Promotion and Protection of Investment Proceeding 
from Non-Member Countries of the MERCOSUR.  View ed at:  http://www.cvm.gov .br/port/relinter/ingles/ 
mercosul/ buenos-e.asp. 
27 MERCOSUR Decision No. 11/93, Protocol of Colonia for the Promotion and Reciprocal Protection 
Of Investments in MERCOSUR (investment within memb er countries).  Viewed at:  http://www.cvm.gov. 
br/ingl/ inter/mercosul/coloni-e.asp. 
28 Argentina, Austria, Belgium, Canada, Chile, Ch ina, Czech Republic, Denmark, Ecuador, Finland, 
France, Hungary, India, Israel Italy, Japan, the Repub lic of Korea, Luxembourg, Netherlands, Norway, Mexico, 
Philippines, Portugal, South Africa , Slovak Republic, Sweden, Spain, and Ukraine. Brazil WT/TPR/S/212 
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 33. Brazil is a signatory of the Multilateral Inv estment Guarantee Agency (MIGA) convention 
(since 1992) and joined the OECD Investment Comm ittee in 1998 as an observer.  As at September 
2008, it had not signed the International Centre for Settlement of Invest ment Disputes (ICSID) 
convention.  Prior to becoming an OECD observer,  Brazil subscribed to its 1976 Declaration and 
Decisions on International Investme nt and Multinational Enterprises. 
(5) INTERNATIONAL RELATIONS  
(i) World Trade Organization 
34. Brazil is an original member of the WTO and grants at least MFN treatment to all its trading 
partners.  Brazil participated and made specific commitments in the WTO negotiations on financial 
services and on basic telecommunications (Chapter IV).  However, it withdrew its offer on 
telecommunications as some Members objected to its revised schedule, after it was unable to ratify the Fourth Protocol (see also Chapter IV(7)(iii)).  Brazil has not yet ratified the Fifth Protocol.  
However, it announced in the Committee on Trade in  Financial Services in November 2007, that the 
Fifth Protocol had passed the first reading in both houses of the Brazilian Congress, and that the 
constitutional procedures for its full adoption were near completion.
30 
35. The WTO remains at the center of Brazil's trad e policy and a reinforced multilateral trading 
system remains a Brazilian priority.31  Brazil conducts over three quarters of its trade with MFN 
trading partners.  It participates actively in  the WTO and is a leading voice among developing 
countries, in particular in the context of Doha  Development Agenda (DDA).  Brazil has presented, 
alone, as part of MERCOSUR, and together with ot her countries, a relatively large number of 
proposals in the areas covered by the DDA includ ing proposals to liberalize trade in services32, 
agriculture33, the NAMA negotiations34, the Negotiating Group on Rules35, and intellectual property 
rights.36  Brazil has presented an offer and a revised of fer on services, both of which are still restricted 
(as at September 2008). 
36. Brazil has made a large number of notifications to the WTO but certain notifications have not 
yet been made (September 2008), for instance under the Agreement on Agriculture (Table AII.1).   
37. Brazil has been involved in several cases unde r the WTO dispute settlement mechanism 
during the period under review (Table II.1).  It ha s been a complainant in 23 matters since the WTO 
was established, but only one of these cases started during the review period.  Brazil was a respondent 
in two cases over the period 2004-08;  these related to anti-dumping measures and the banning of the 
importation of retreaded tyres.  Since the establishment of the WTO, Brazil has been a defendant in 
14 cases and a third party in 49. 
                                                                                                                                                                     
29 Executive Decree DEC No. 5,654/ 2005 of 29 December 2005.  
30 WTO document S/FIN/M/55, 16 November 2007. 
31 WTO document WT/TPR/M/140, 24 January 2005. 
32 WTO document S/CSS/W/139, 20 March 2002. 
33 WTO documents WT/MIN(03)/W/6, 4 September 2003 and WT/MIN(05)/ST/8, 14 December 2005. 
34 The NAMA-11 comprises:  Argentina, Bolivarian Republic of Venezuela, Brazil, Egypt, India, 
Indonesia, Namibia, Philippines, So uth Africa, and Tunisia (WTO document TN/MA/W/87, 19 June 2007). 
35 These proposals are contained in the TN/RL document series. 
36 WT/GC/W/564/Rev.1, TN/C/W/41/Rev.1, 6 June 2006.  Communication from Brazil, China, Cuba, 
India, Pakistan, Peru, Thailand, and Tanzania. WT/TPR/S/212 Trade Policy Review 
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 Table II.1  
WTO dispute settlement cases involvi ng Brazil, January 2004-November 2008a 
Subject of dispute Respondent/ 
complainant Status WTO document 
Brazil as respondent 
Measures on retreaded tyres 
from the EC Brazil/European 
Communities Panel Report circulated:  12 June 2007.  Appellate 
Body report circulated:  3 December 2007.  
Article 21.3(c) Arbitration Report circulated:  29 
August 2008  WTO document series  
WT/DS332 
Anti-dumping measures on 
certain polyethylene 
terephthalate resins Brazil/Argentina The DSB establishe d a panel in July 2007.  On 
4 February 2008, the Chairman of the Panel informed 
the DSB that Argentina had indicated that the Foreign Trade Chamber of Brazil had adopted a decision on 
29 January 2008,to suspend the application of anti-
dumping duties on imports of PET resin from Argentina.  Therefore, Ar gentina asked the Panel to 
suspend its work. The Panel agreed, and suspended its 
work until further notice WTO document series 
WT/DS355 
Brazil as complainant 
U.S.-Agriculture Subsidies United States/Brazil T he DSB established a single panel for Brazil's  
complaint and a similar complaint by Canada at its meeting on 17 December 2007 
 WTO document series  
WT/DS365 
European Communities- Customs Classification of 
Frozen Boneless Chicken Cuts European 
Communities/BrazilPanel Report circulated:  30 May 2005  Appellate 
Body Report circulated:  12 September 2005.  
Article 21.3(c) Arbitration Report circulated:  
20 February 2006  WTO document series  
WT/DS269 
United States – Subsidies on Upland Cotton United States/Brazil Panel Report circul ated:  8 September 2004.  Appellate 
Body Report circulated:  3 March 2005.  Article 21.5 Panel Report circulated:  18 December 2007.  Article 
21.5 Appellate Body Report circulated:  2 June 2008. 
 WTO document series  
WT/DS267 
EC – Export Subsidies on 
Sugar European 
Communities/BrazilPanel Report circulated:  15 October 2004.  Appellate 
Body Report circulated:  28 April 2005.  
Article 21.3(c) Arbitration Report circulated:  28 October 2005  WTO document series  
WT/DS266 
Equalizing Excise Tax Imposed 
by Florida on Processed Orange and Grapefruit 
Products United States/Brazil Mutually Agreed Solution notified: 2 June 2004 WTO document series  
WT/DS250 
 a Disputes on which any action was taken under DSU provisions between January 2004 and June
 2008. 
 
Source : WTO Secretariat. 
(ii) Preferential agreements 
(a) General features 
38. Brazil attaches great importance to regional trad e agreements as a valuable complement to, 
though not a substitute for, a fair, balanced, transparent, rule-based, and non-discriminatory 
multilateral trade system.37  Brazil is a founding member of the Southern Common Market 
(MERCOSUR).  In addition, through its particip ation in MERCOSUR, Brazil has preferential trade 
agreements in force with:  Bolivia;  Chile;  Colo mbia, Ecuador, and Venezuela;  Cuba;  Mexico;  and 
Peru;  and in the framework of the Latin American Integration Association (LAIA), Brazil has Economic Complementarity Agreements (ECAs) in fo rce with Guyana and Suriname (Table AII.2). 
                                                     
 
37 WTO document WT/TPR/M/140/Add.1, 15 February 2005, p. 26. Brazil WT/TPR/S/212 
 Page 21 
 
 
 (b) MERCOSUR 
39. MERCOSUR is by far Brazil's most important pr eferential agreement in terms of value of 
trade, although only some 10% of Brazil's me rchandise trade takes place with the three other 
MERCOSUR members (Argentina, Paraguay and Urugua y).  The Common Market was established in 
November 1991 by the Treaty of Asunción38;  the Protocol of Ouro Preto, signed in December 1994, 
provides the institutional structure.  The main decision-making body, the Council for the Common 
Market, comprises Ministers of Foreign Affairs and of Finance of the member countries.39  T h e  
Common Market Group, MERCOSUR's executive body, is in charge of supervising the application of 
the Treaty of Asunción, its protocols and the agreem ents signed within its framework.  It is also 
responsible for negotiating with third countries, groups  of countries, and intern ational organizations.  
The Common Market Group issues Resolutions, whic h are mandatory for the member countries.  
Within the Common Market Group there are a numb er of working groups, committees, and ad-hoc 
groups.  The Trade Commission is responsible for the application of common trade policy instruments, as well as for the follow-up and revision of related issues. 
40. MERCOSUR's Common External Tariff (CET) en tered into force on 1 January 1995, with a 
number of sector- and country-specific exceptions.  Under Decisions CMC 21/02, 31/03, 38/05 and 
59/07, Brazil maintains, exception lists comprisi ng 100 tariff lines until 31 December 2009, to be 
trimmed to 50 tariff headings in the second half  of 2010, and eliminated by 31 December 2010.
40  
These exceptions together represent 0.7% of Brazilian tariff lines (Chapter III(2)(iv)(a)). 
41. Negotiations for the establishment of a MERCO SUR automotive policy, dealing with both 
intra-MERCOSUR and external trade, were c oncluded in June 2000 between Brazil, Argentina 
and Uruguay;  Paraguay accepted the regime in 2001.41  However, this agreement has not fully 
entered into force (mid-2008) and intra-MERCOSU R trade in the automotive sector is ruled by 
bilateral agreements.42 
42. The Protocol of Olivos, signed in February 200 2 and in force since January 2004 replaced the 
Protocol of Brasilia as MERCOSUR's dispute settle ment mechanism.  The Protocol of Olivos 
provides for the choice of forum (MERCOSUR or WTO) for a dispute, recourse to mediation by the 
Group Common Market upon agreement by the parties, and a review procedure.  The main change 
with respect to the Protocol of Brasilia is the establishment of a Permanent Review Court (PRC) of 
five arbitrators.  The Protocol of Olivos provi des for compensatory measures pursuant to total or 
partial non-compliance with an awar d of the arbitration court.  Du ring the period under review, Brazil 
participated as a respondent in one dispute brought by Uruguay, in 2002, under the Protocol of 
Brasilia;  the dispute, which concerned trade me asures on tobacco products, was concluded in 2005.43 
                                                      
38 MERCOSUR is incorporated in the LAIA legal regime as Economic Complementarity Agreement 
No. 18.  LAIA economic complementarity agreements must be open for accession by any LAIA country. 
39 MERCOSUR online information.  Viewed at:  http://www.mercosur.org.uy/pagina1esp.htm. 
40 Paraguay and Uruguay were authorized to maintain lists of exceptions of 150 and 125 tariff 
headings, respectively, until 31 December 2010 (MDI C online information.  Viewed at:  http://www. 
desenvolvimento.gov.br/sitio/interna/in terna.php?area=5&menu=1386&refr=374). 
41 Council of the Common Market Decisions Nos..70/00 and 04/01.  Viewed at:  http://www. 
mercosul.gov.br/normativas/default.asp?key=1227;  an d http://www.mercosul.gov.br /normativas/default.asp? 
key=1583. 
42 Brazil/Argentina:  31st Amendment to the ACE-14;  Brazil/Uruguay:  60th Amendment to the ACE-
02;  and Argentina/Uruguay:  Partial Agreement No. 57. 
43 For the MERCOSUR Tribunal's ruling, see:   http://www.mercosur.int/msweb/portal%20 
intermediario/es/controversias/arquivos/X%20LAUDO.pdf. WT/TPR/S/212 Trade Policy Review 
Page 22 
 
 
 43. In June 2002, the Council of the Common Market adopted the WTO Agreements on Anti-
Dumping and on Subsidies and Countervailing Measu res for the application of these contingency 
measures to intra-MERCOSUR trade (CMC/DEC /13/02 and CMC/DEC/14/02, respectively).  
Decision CMC No. 17/96 regulates the application of safeguards on imports from third parties.  The 
49th Additional Protocol to the MERCOSUR, of 24 June 2005, incorporates Decision CMC 
No. 17/04, on the Regime of Application of Sa feguard Measures to non-MERCOSUR members.  It 
was incorporated into Brazilian law through Decree No. 5,573, of 8 November 2005.  Decision CMC 
No. 17/04 is awaiting incorporation in the intern al legislation of other MERCOSUR members and has 
not entered into force.  In December 2003, the Council of the Common Market adopted 
MERCOSUR's Protocol on Government Procurement;  a revision of th e Protocol adopted in 2006, has 
not yet entered into force. 
44. The Protocol of Montevideo on Trade in Serv ices in the MERCOSUR entered into force on 
7 December 2005, following ratification by Argentin a, Brazil, and Uruguay;  Paraguay has yet to 
ratify the Protocol.  Pursuant to GATS Article V:7, the Protocol of Montevideo on Trade in Services 
in the MERCOSUR was notified to the Council fo r Trade in Services (CTS) on 5 December 2006 
(S/C/N/388, and Corr.1).  The Protocol is of inde finite duration and aims to apply the relevant 
services provisions of the Treaty of Asunción;  it establishes a programme fo r the liberalization of 
intra-trade in services within an overall implementati on period of ten years from entry into force, i.e. 
by December 2015.  The Protocol was reviewed in the WTO Committee on Regional Trade Agreements in September 2008.
44 
(c) Other trade arrangements and agreements 
45. Brazil participates in the Global System of Trade Preferences among Developing Countries 
(GSTP).  Like other MERCOSUR members, Brazil gr ants preferences to participating countries on 
some 98 HS96 tariff headings.  The preferences ra nge from to 10% to 50% and include agricultural 
products, fuels, chemical products, hides and sk ins, ferrous and steel products, among others.45 
46. The free-trade agreement between MERCOSUR a nd Israel was signed on 18 December 2007.  
The agreement establishes the gradual elimination of tariffs, based on a schedule with four categories, 
within a ten-year timeframe. The agreement has pr ovisions on rules of origin;  dispute settlement;  
safeguards;  technical regulations, standards, a nd conformity assessment procedures;  sanitary and 
phytosanitary measures;  and technical and tec hnological cooperation, as well as an annex on the 
promotion of mutual assistance in customs matters.46  The agreement provides for its entry into force, 
bilaterally, after ratification by Israel and one of the MERCOSUR states.  The agreement is not yet in 
force in Brazil. 
47. Trade negotiations between MERCOSUR and th e European Union are based on the EU-
MERCOSUR Interregional Framework Co-operation Agreement, signed in December 1995.  The 
negotiations were formally  launched in 1999 and tariff and services negotiations began in July 2001.  
Market offers exchanged in September 2004 incl uded goods, services, government procurement, and 
                                                      
44 WTO document WT/REG/M/50, 24 October 2008. 
45 For the complete list, see:  http://www.uncta dxi.org/Secured/GSTP/Concessions/mercosur_en.pdf. 
46 For the text of the agreement,  see:  http://www.desenvolvimento.gov.br/arquivos/dwnl_1198263089 
.doc. Brazil WT/TPR/S/212 
 Page 23 
 
 
 investment, but were not de emed enough for an agreement.47  Since then, there have been a number of 
ministerial and senior official contacts but no formal resumption of negotiations. 
48. In May 2007, the EU recommended the launch of a strategic partnership to further deepen its 
ties with Brazil.  The first EU-Brazil Summit was held in Lisbon in July 2007.48  Topics to be 
addressed under the new partnership include effect ive multilateralism, climate change, sustainable 
energy, strengthened trade and economic relations, and the fight against poverty.49 
49. MERCOSUR and India signed a framework trade agreement on 17 June 2003, which 
provided for the negotiation of a partial scope ag reement, signed on 25 January 2004 (annexes were 
signed on 19 March 2005).  The agreement cont ains disciplines on safeguards, anti-dumping and 
countervailing measures, technical barriers to trade,  and sanitary and phytosanitary measures, as well 
as dispute settlement procedures.  The trade agre ement covers 450 tariff lines for India and 453 lines 
for MERCOSUR, with reductions of between 10% and 20% on the MFN tariff.  As at September 
2008, the agreement was not yet in force, pending ratification by Uruguay. 
50. MERCOSUR and South Africa signed a framework agreement in December 2000;  its main 
objective is the conclusion of a free-trade agreem ent.  The other four member countries of the 
Southern African Customs Union (SACU) joined the negotiations in 2003, and a preferential trade 
agreement between MERCOSUR and SACU was concl uded in April 2008.  The authorities note that, 
as at November 2008, the parties are working on a date for the signature within 2008. 
51. Brazil is negotiating preferential trade agreements  with Egypt, the Gulf Cooperation Council 
(GCC), Jordan, Morocco, and Turkey.  Discussi ons on the possible conclusion of a MERCOSUR-
CARICOM trade agreement have also started. 
(6) AID FOR TRADE  
52. As a member of the WTO Task Force, Braz il has been participating actively in the 
development of the Aid-for-Trade (AFT) process.  Its framework for trade-related assistance, as 
proposed within the context of AFT, results from the Government's efforts to give development 
central priority.  Brazil's role in the AFT initiative is twofold, as recipient and as a participant in 
south-south cooperation (donor).50 
53. Brazil proposed guidelines on AFT, stated in its non-paper51, aim to separate the development 
aspect of cooperation from the potential underlying motivations for providing it.  Hence, Brazil 
proposes that Aid for Trade:  (a) should not be conc eived as a substitute for the development gains to 
be derived from negotiations on market access and the elaboration of balanced trade rules;  (b) must 
play an important role in facilitating adjustment;  (c) should be funded with additional resources to 
those already in place, and for the most part s hould be on concessional terms or in grant form;  
(d) should be provided without imposing conditiona lity, bearing in mind the particularities of the 
                                                      
47 For the details of the offer, see:  http://www.mre.gov.br/index.php?option =com_content&task=view 
&id=337&Itemid=301. 
48 1st EU-Brazil Business Summit.  Lisbon 4 July 20 07, Joint Declaration of Brazilian and European 
Business.  Viewed at:  http://ec.europa.eu/external_relations/brazil/docs/2007_joint_decl_040707_en.pdf. 
49 European Commission External Relations online information.  Viewed at:  http://ec.europa.eu/ 
external_relations/brazil/index_en.htm. 
50 Brazil stressed this point in its submission to the Aid for Trade OECD/WTO Report.  Viewed at: 
http://www.oecd.org/dataoecd/54/30/39835215.pdf. 
51 WTO documents WT/AFT/W/10, 22 May 2006, and WT/AFT/W/10/Rev.1, 7 June 2006. WT/TPR/S/212 Trade Policy Review 
Page 24 
 
 
 recipient countries;  (e) should not be used as a bargaining tool;  and (f) "ownership" must remain 
with members receiving AFT.52 
54. Brazil played an important role in developing the thematic areas and activities of technical 
support and capacity-building that should be elig ible for cooperation under the Aid for Trade 
programme.  Themes proposed by Brazil include supply-side constraints (such as trade-related 
infrastructure), adjustment costs and the establis hment of trade and poverty reduction frameworks, 
social infrastructure programmes, and erosion of preference assistance.53 
55. With a view to making AFT truly effective and operational, Brazil suggested a mechanism 
that allows Members to request AFT assistance ac cording to their own priorities and needs; and for 
the relevant organizations to res pond in a coordinated way.  There is also a need for continuous 
evaluation of AFT projects in order to ensure ef fectiveness and such a mechanism should make an 
overall assessment on the additionality of resources. 
56. In its capacity as development partner, Braz il supports the development and provision of 
south-south cooperation programmes because "devel oping countries have consolidated a knowledge-
based expertise of problems affecting each other".54 
57. According to Brazil, in addition to the work  done by various international organizations, 
financial institutions, and development agencies, a ttention must be geared towards increased dialogue 
between the public and private sectors, in order to  guarantee an in depth assessment of AFT needs and 
the effectiveness of AFT projects. 
58. The Brazilian Agency for Cooperation (ABC), pa rt of the Ministry of External Relations55, 
leads national efforts in technical-cooperation-relate d AFT, coordinating more than 120 participating 
entities.56  ABC maintains an online database of project s, and has assessed the "real value" of its 
overall outward technical coopera tion for 1998-2003 at US$225 million.57 
59. Through, inter alia , direct training or knowledge-transfer activities countries of Latin 
America, Africa, and the Caribbean have benefite d from Brazilian trade cooperation, in areas such as: 
promotion of imports;  simplified export pro cedures through postal and courier services;  
enhancement of productive capacity;  agriculture and bio-fuels;  and cooperation to enhance the social 
impact of trade development.  Moreover, Brazilian expertise has been sought in order to strengthen 
developing countries' negotiating kno wledge and skills, through the organization of courses on trade 
policy and trade negotiations.  Officials from Angola, Cape Verde, Guinea Bissau, Mozambique, East Timor, and Sao Tome and Princi pe have participated in these typ es of activities, which have been 
conducted through the Community of Portug uese Speaking Countries (CPLP).  The Brazilian 
Government also organized a course on the WTO di spute settlement system for officials of South 
American countries. 
                                                     
 
52 WTO document WT/AFT/W/10/Rev.1, 7 June 2006. 
53 WTO document WT/AFT/W/10/Rev.1, 7 June 2006. 
54 WTO document WT/AFT/W/10, 22 May 2006. 
55 OECD 2007, Aid for Trade at a Glance 20 07:  Country & Agency Chapters, Brazil. 
56 ABC online information.  Viewed at:  http ://www.abc.gov.br/abc/ab c_ctpd_parcerias.asp. 
57 The assessment was carried out on the basis of a study of the Brazilian south-south technical 
cooperation undertaken by the UNDP in  2005.  The study indicated that each  dollar spent by ABC in a technical 
cooperation project corresponded to $15 worth of technical and consultancy services provided to the recipient 
country (O que é a Agênci a Brasileira de Cooperação.  Viewed at:  http://www.abc.gov.br/intranet/ 
Sistemas_ABC/siteabc/doc umentos/via-ABC.pdf). Brazil WT/TPR/S/212 
 Page 25 
 
 
 60. Brazil's position as a recipient of AFT is reported in standard information systems.  According 
to the WTO OECD Doha Development Agenda Tr ade Capacity Building Database, international 
trade-related assistance committed to Brazil averag ed US$92.7 million a year during 2004-07, which 
includes all concessional and non-concessional grants and loans;  if only grants and concessional 
loans are considered average annual assistance is lower, at US$14.4 million.58 
                                                      
58 WTO OECD Doha Development Agenda Trade Capacity Building Database.  Viewed at:  
http://tcbdb.wto.org/ben_country.aspx?tab=331&entityID=153.