WRITTEN QUESTION E-0590/01

by Alexandros Baltas (PSE) to the Commission

(1 March 2001)

Subject: Duties imposed by Brazil on canned peaches

The Brazilian authorities have imposed duty of 55 % on canned peaches. This duty is a discriminatory levy on canned peaches exported from Greece to Brazil and was imposed by the Brazilian authorities some five years ago.

It was to be reduced, however, each year until by December 2000 it would stand at 23 %, and from 1 January 2001, it would be limited to 17 %.

I am informed, however, that in October 2000, the Brazilian authorities increased the duty to 55 % once again. At the same time, they launched an anti-dumping inquiry, though without imposing an interim duty. According to the Brazilian authorities, the duty was of a temporary nature and would be abolished on 31 December 2000 when the original arrangements would be reintroduced and the applicable duty reduced (on 1 January 2001) to 17 %. On 2 January 2001, however, the Brazilian authorities extended the validity of the 55 % duty until 30 June 2001 with a view to discussing the rate within Mercosur.

As a result Brazil's action, producers and exporters of canned peaches lost the holiday period business and suffered a serious setback. In general, the pressure exerted on EU canned peaches from third countries is growing, threatening an important sector of European industry with disaster, which may snowball into negative repercussions for society as a whole (higher unemployment), the farming community and, by extension, the common agricultural policy, the environment, etc.

In the light of the above, will the Commission say:

- what measures it has taken to protect the canned peach sector and with what results,

- what measures does the Commission propose to take next,

- to what extent are the practices adopted by Brazil taken into account and to what extent do they influence the policy pursued by the Council in talks and negotiations with Mercosur, of which Brazil is a member?

Answer given by Mr Lamy on behalf of the Commission

(18 May 2001)

The Commission is aware of several measures that have created difficulties for the market access of imported canned peaches in Brazil. The measures mentioned by the Honourable Member can be divided into two separate issues: Application of customs duties and anti-dumping investigation.

As regards applicable customs duties, the reintroduction of the 55 % duty is in line with Brazil's commitments on customs tariffs in the framework of the World Trade Organisation (WTO). The legality of the level of duty cannot therefore be challenged. However, the Mercosur Common External Tariff (CET) for canned peaches is 17 %. On the basis of a recent Mercosur decision, Brazil may deviate from the CET on canned peaches (among a number of other goods), but should eventually adjust its duties in line with the CET. The Commission will clarify with the Brazilian authorities when this will take place.

In general terms, customs duties are best addressed in the context of the on-going interregional negotiations between the Community and Mercosur. It is the Commission's objective that these negotiations will include principles of standstill and roll-back as regards customs duties and, finally, removal of customs duties on substantially all trade between the Community and Mercosur.

The anti-dumping investigation initiated by Brazil on 25 October 2000 has to be finalised under the Brazilian legislation within twelve months from initiation. This deadline may in exceptional circumstances be extended by six more months, i.e. a total duration of eighteen months at most. The Commission is monitoring this procedure closely with a view to reacting swiftly in case of any deviation from WTO provisions by the Brazilian authorities.