BRAZIL – MEASURES AFFECTING IMPORTS OF RETREADED TYRES
Document: Request for Consultations by the European Communities
Date: 23 June 2005
Document codes: WT/DS332/1; G/L/741
Complainant: EU
Respondent: Brazil
Third parties: Argentina, Australia, China, Cuba, Guatemala, Japan, South Korea, Mexico, Paraguay, Taiwan, Thailand, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. I:1, III:4, XI:1, XIII:1  GATT 1994

BRAZIL – MEASURES AFFECTING IMPORTS OF RETREADED TYRES

Request for Consultations by the European Communities

 The following communication, dated 20 June 2005, from the delegation of the European
Communities to the delegation of Brazil and to the Chairman of the Dispute Settlement Body, is
circulated in accordance with Article 4.4 of the DSU.

 The European Communities hereby requests c onsultations with the Government of Brazil
pursuant to Article XXII:1 of the General Agreem ent on Tariffs and Trade 1994 ("GATT 1994") and
Article 4 of the Understanding on Rules and Pr ocedures Governing the Settlement of Disputes
("DSU") regarding Brazil's imposition of measures that adversely affect exports of retreaded tyres
from the European Communities to the Brazilian market.

 The issues which the European Communities would like to raise in the course of the
consultations include, but are not limited to, the following measures:

– Brazil's imposition of an import ban on retreaded ty res, notably by virtue of Portaria No. 17 of
1 December 2003 of the Secretariat of Foreign Trade of the Brazilian Ministry of
Development, Industry and International Commerce that prohibits the issuance of import
licences for retreaded tyres.

– Brazil's adoption of a set of measures banning the importation of used tyres,
1 which are
sometimes applied against imports of retreaded ty res, despite the fact that these are not used
tyres.

– Brazil's imposition, by virtue of Presidential Decree No. 3919 of 14 September 2001, of a fine
of 400 BRL per unit on the importation, as well as the marketing, transportation, storage,
keeping or keeping in deposit or warehouses of imported, but not of domestic retreaded tyres.

– Brazil's exemption of retreaded tyres importe d from other Mercosur countries from the import
ban by means of Portaria No. 2 of 8 March 2002 of the Secretariat of Foreign Trade of the
Brazilian Ministry of Development, Industr y and International Commerce and from the
above-mentioned financial penalties by virtue of Presidential Decree No. 4592 of 11 February
2003, in response to the ruling of a Mercosur panel established at the request of Uruguay.

1 Portaria DECEX No. 8 of 13 May 1991, Portaria DECEX No. 18 of 19 July 1992, Portaria IBAMA
No. 138-N of 22 December 1992, Portaria MICT No. 370 of 28 November 1994, Interministerial Portaria No. 3
of 12 September 1995 of the Ministry of Industry, Commerce and Tourism and of the Ministry of the Economy,
CONAMA Resolution 23 of 12 December 1996, CONAMA Resolution No. 235 of 7 January 1998.

 For each of the measures referred to above, this request also covers any amendments,
implementing measures or other related measures.

 These measures are inconsistent with Brazil's ob ligations under Articles I:1, III:4, XI:1 and
XIII:1 of GATT 1994.

– Brazil has acted inconsistently with Ar ticle XI:1 of GATT 1994 by instituting and
maintaining a prohibition and restriction othe r than a duty, tax or other charge on the
importation of a product of the territory of a nother Member, made effective through import
licences and other measures.

– Brazil has acted inconsistently with Artic le XI:1 and/or Article III:4 of GATT 1994 by
instituting and maintaining a restriction other than a duty, tax or other charge on the
importation of a product of the territory of a nother Member, made effective through a fine
imposed on the importation of retreaded tyres in the amount of 400 BRL per unit.

– Brazil has acted inconsistently with Artic le III:4 and/or Article XI:1 of GATT 1994 by
imposing a fine in the amount of 400 BRL per imported retreaded tyre that is marketed (sold),
transported, stored, kept or kept in deposit or warehouses. Thereby, Brazil has failed to
accord, to products of the territory of the European Communities imported into the territory of
Brazil, treatment no less favourable than that acco rded to like products of national origin in
respect of laws, regulations and requirements affecting their internal sale, offering for sale,
purchase, transportation, distribution or use.

– Brazil has acted inconsistently with Article I:1 of GATT 1994 by eliminating the import ban
and the above-mentioned financial penalties for retreaded tyres imported from other Mercosur
countries, while maintaining those measures fo r other imports, notably from the European
Communities. Thereby, Brazil has failed to acco rd an advantage granted, with respect to
rules and formalities in connection with importation, and with respect to matters referred to in
paragraph 4 of Article III, to products orig inating in other countries immediately and
unconditionally to the like products originating in the territory of the European Communities.

– By applying the above-mentioned import ban on retreads as well as the financial penalty on
every unit of retreaded tyres imported from th e European Communities, but not to those
imported from other Mercosur countries, Brazil acts inconsistently with Article XIII:1 of
GATT 1994, because it applies a prohibition and restriction on the importation of a product of
the territory of another Member, although the importation of the like product of all third
countries is not similarly prohibited or restricted.

 The European Communities reserves the right to address additional measures and claims
under other provisions of the WTO Agreement regard ing the above matters during the course of the
consultations.

 The European Communities looks forward to receiving in due course a reply from Brazil to
this request. The European Communities is ready to consider with Brazil mutually convenient dates
to hold consultations in Geneva.