BRAZIL – MEASURES AFFECTING IMPORTS OF RETREADED TYRES
Document: Request for the Establishment of a Panel by the European Communities
Date: 18 November 2005
Document codes: WT/DS332/4
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

Request for the Establishment of a Panel by the European Communities

 The following communication, dated 17 November 2005, from the delegation of the
European Communities to the Chairman of the Dis pute Settlement Body, is circulated pursuant to
Article 6.2 of the DSU.

 The European Communities hereby requests the establishment of a panel pursuant to
Articles 4.7 and 6 of the Understanding on Rule s and Procedures Governing the Settlement of
Disputes ("DSU") and Article XXIII of the Gene ral Agreement on Tariffs and Trade 1994 ("GATT
1994"). This request concerns Brazil's imposition of measures that adversely affect exports of
retreaded tyres from the European Communities to the Brazilian market.

 Specifically, this request concerns:

– Brazil's imposition of an import ban on retreaded ty res, notably by virtue of Portaria No. 14 of
17 November 2004 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.

– Measures maintained at the level of Braz ilian States which prohibit the sale of imported
retreaded tyres. For instance, Law No. 12.114 of 5 July 2004 of Rio Grande do Sul bans the
commercialisation of used tyres, as which are considered inter alia retreaded tyres that have
been manufactured outside of Brazil from the casings of used tyres and imported into Brazil.

– 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. 14 of 17 November 2004 of the Secretariat of Foreign Trade of

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.

the Brazilian Ministry of Development, Indus try 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.

 For each of the measures referred to above, this request also covers any amendments,
replacements, extensions, 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
maintaining prohibitions of the commercialisation of imported retreaded tyres at the level of
States and by imposing a fine in the amount of 40 0 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 territo ry of the European Communities imported into
the territory of Brazil, treatment no less favour able than that accorded 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 bans on retreads as well as financial penalties 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.

 On 20 June 2005, the European Communities re quested consultations with Brazil with a view
to reaching a mutually satisfactory solution of the matter. The request was circulated in document
WT/DS332/1 dated 23 June 2005. Th e consultations were held on 20 July 20005 in Geneva on the
above-mentioned and other measures. They have allowed a better understanding of the measures at
issue and the respective positions but have not led to a satisfactory resolution of the matter. Rather,
the Brazilian government has submitted, on 31 Oct ober 2005, a draft law (No. 6.136/2005) to the
Brazilian legislature that would confirm in an act of parliament the above -mentioned import ban on
retreaded tyres and an exemption for imports under a regional integration agreement.

 Therefore, the European Communities respectfully requests that a panel be established, with
standard terms of reference, to consider the above complaint with a view to finding that Brazil's
measures are inconsistent with Brazil's obliga tions under the GATT 1994, in particular, but not
necessarily exclusively, under Articles I:1, III:4, XI:1 and XIII:1 of GATT 1994.

 The European Communities asks that this request be placed on the agenda for the meeting of
the Dispute Settlement Body to be held on 28 November 2005.