BRAZIL – MEASURES AFFECTING IMPORTS OF RETREADED TYRES
Document: Status Report by Brazil Addendum
Date: 10 July 2009
Document codes: WT/DS332/19/Add.4
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

Status Report by Brazil

Addendum

 The following communication, dated 9 July 2009, from the delegation of Brazil to the
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 21.6 of the DSU.

Status Report Regarding Implementation of the

DSB Recommendations and Rulings in the Dispute

(WT/DS332)

1. Brazil submits this report in accordance with Article 21.6 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes.

2. On 17 December 2007, the Dispute Settlement Body ("DSB") adopted the Panel and the
Appellate Body reports in ( WT/DS332). At
the DSB meeting on 15 January 2008, Brazil informed the DSB of its intention to implement the
recommendations and rulings of the DSB. At the same meeting, Brazil stated that it would need a
"reasonable period of time" to do so, according to Article 21.3 of the DSU.

3. In January 2008, Brazil and the EC initia ted discussions with a view to agreeing on a
"reasonable period of time". The matter was refe rred to arbitration by the EC pursuant to
Article 21.3(c) of the DSU on 4 June 2008. The Ar bitrator was composed by the Director-General on
26 June 2008. The arbitration award, circulated on 29 August 2008, established that the reasonable
period of time for the implementation was 12 months.

4. As announced in Brazil's previous status reports in this dispute (;
; ; ), Brazil's Supreme Court was in
the final stages of deciding the judicial action file d by the Executive Branch (Allegation of Violation
of Fundamental Precept – ADPF – No 101) to obtain a definitive ruling that prevents lower courts
from issuing injunctions allowing imports of used tyres and revokes injunctions already granted.

5. On 24 June 2009, Brazil's Supreme Court reac hed a final decision on ADPF 101. Eight out of
nine Justices decided in favour of the Executive Branch's proposition that the importation of used
tyres infringe on fundamental constitutional precepts re lating to the human rights to health and to a
balanced environment, contained in Articles 170, 196 and 225 of the Constitution of the Federal

Republic of Brazil. More specifically, the reportin g Justice concluded – and was followed in these
conclusions by seven of her peers involved in the judgment – that:

• The regulations banning the importation of u sed tyres into Brazil are constitutionally
valid;

• Court decisions that allow the importation of used tyres violate the Federal
Constitution and lose, retroactively and prospectively, any legal effects;

• Court decisions that became res iudicata also lose their legal effects, except for the
entries of used tyres that already took place.

6. The outcome of ADPF 101 is in line with core values and principles that guide Brazil's
constitutional order. The Supreme Court decision supports a critical public policy pursued by the
Brazilian Government to protect the Brazilian population from the risks associated with the
generation, transportation and accumulation of used tyres. Within the legal framework provided by
Article XX(b) of the GATT 1994, the Panel and the Appellate Body recognized the key role played
by the prohibition on the importation of retreaded tyres for the success of such policy. Brazil's
Supreme Court reached a similar conclusion with rega rd to the importation of used tyres authorized
by some lower courts and, in so doing, took an ex tremely important step to bring Brazil into full
compliance with the recommendations and rulings adopted by the DSB in this dispute.