. /.   WORLD TRADE  
ORGANIZATION  G/SCM/Q2/BRA/13 
24 January 2006 
 (06-0339) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
Questions from the EUROPEAN COMMUNITIES  
Regarding the New and Full Notification of BRAZIL1 
 
  The following communication, dated 23 January 2 006, is being circulated at the request of the 
Delegation of the European Commission.  
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  1.  GENERAL:   According to different press reports in January  2003, the Ministry of Development, Industry 
and Trade (MDIC) announced that the government ai med to increase exports by ten per cent during 
this year, create 400,000 new export-related jobs, and strengthen official institu tional support in terms 
of trade finance and export promotion.   The latest trade policy review of Brazil (WT/TPR/S/140) mentions on pages 78 to 87 a 
variety of export promotion programmes and in centives as well as export processing zones, which 
require that companies have to export 100 per cent of their production in order to be allowed to 
establish themselves.   The present notification does not mention any of these activities.  Can Brazil please explain how these goals were implemented and why the progra ms figuring in the TPR are not included in the 
notification? 
 2.  FISHERIES SECTOR  
1. Notification of the PROFROTA programme  
 
 Responding to a written question that the Eu ropean Communities put during Brazil’s fourth 
Trade Policy Review on the notification of the PR OFROTA programme (providing financing to the 
acquisition, construction, modernization, adaptati on and equipping of fishing vessels) the Brazilian 
authorities replied that “The PROFROTA programme is  expected to enter into force and to become 
operational in 2005 and its end is envisaged for 2007.  Notification under Article 25 of the ASCM will 
be made as soon as the programme enters into  force.” (see document WT/TPR/M/140/Add.1 of 
15 February 2005 p. 87).  The European Comm unities note that “DECRETO Nº 5.095” of 
1 June 2004 implemented some of the provisions of  “LEI N° 10.849” of 23 March 2004, which is the 
basic law for the PROFROTA programme.  Th e European Communities also note that the 
                                                     
 
1 G/SCM/N/123/BRA G/SCM/Q2/BRA/13 
Page 2  
 
  aforementioned “DECRETO Nº 5.095” has been re placed by a new regulation (DECRETO Nº 5.474 
of 22 June 2005) which includes similar provisions as the previous one.  Questions  
 Can Brazil clarify whether the PROFROTA programme was already operational in 2004 as a 
result of the publication of "DECR ETO N° 5.095" of 1 June 2004?  
  If it was the case that the PROFROTA progra mme was already operati onal in 2004, could 
Brazil explain why it has not included in the notification?  
 
 Could Brazil provide additional information c oncerning the actual status of the programme 
(e.g. whether funds have already been used fo r the financing of vessel construction and/or 
modernisation)?  2. Compatibility of the PROFROTA progr amme with Brazil’s proposals for new 
disciplines on fisheries subsidies 
 
 Brazil has submitted substantial negotiating pr oposals with regard to new disciplines for 
fisheries subsidies (see for example document TN/RL/W/176 of 31 March 2005).   
Questions 
  Does Brazil consider that the PROFROTA progra mme fulfils all the conditions set out in the 
aforementioned mentioned document to benefit of Special and Diffe rential Treatment for developing 
countries?  More specifically, are each and every one of the fisheries in which funded vessels will 
operate, covered by Fisheries Management  Bodies (Regional, International)?  
  If yes, could Brazil specify the fish species and the corresponding fisheries bodies?    Has Brazil made an assessment on whether the PROFROTA programme could result in a subsidized fleet tonnage in excess of 5 per cent of the limits and contingencies of fishing managerial 
schemes established under relevant international organizations, or whether the total “ad valorem” 
subsidization of a fleet exceeds 5 per cent of the value the production of a fishery in which Brazil does 
not operate under the limits and contingencies of fishing manage rial schemes established under 
relevant international organizations?  
 Has Brazil assessed whether the PROFROTA programme could have negative impacts on 
what Brazil calls “fisheries patently at risk”?   How will Brazil make sure that PROFROTA financing does not cover operating losses of fishing companies and that these funds do not bene fit Illegal, Unreported and Unregulated (IUU) 
fishing? 
 
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