BRAZIL – EXPORT FINANCING PROGRAMME FOR AIRCRAFT
Document: Request for the Establishment of a Panel by Canada
Date: 13 July 1998
Document codes: WT/DS46/5
Complainant: Canada
Respondent: Brazil
Third parties: Australia, EU, South Korea, U.S.
Dispute stage: Retaliation & Arbitration
Agreements cited: Art. XVI  GATT 1994Art. 3, 27  Subsidies and Countervailing Measures (SCM)

BRAZIL – EXPORT FINANCING PROGRAMME FOR AIRCRAFT
Request for the Establishment of a Panel by Canada
The following communication, dated 10 July 1998, from the Permanent Mission of Canada to
the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.
On 18 June 1996, the Government of Canada requested consultations with the Government of
Brazil concerning certain export subsidies granted under the Programa de Financiamento às Exportações
(PROEX) to foreign purchasers of Brazil's Embraer aircraft. In accordance with Article 4 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), that request was
notified to the Dispute Settlement Body (DSB) and the Committee on Subsidies and Countervailing
Measures. The request was circulated to Members of the on 21 June 1996

The Brazilian measures in question include Provisional Measure 1700-15 replacing Provisional
Measure 1629-13 and Law 8187 establishing PROEX; Law no. 8249/91; Decree no. 2414 of
December 8, 1997; Resolutions of the Nati onal Monetary Council nos. 2490/98, 2452/97; 2381/97,
2380/97, 2224/95; Circular DIRIN 5; Resolution No. 50 of the Federal Senate of June 13, 1993; MICT
Orders 28/98, 23/98, 7/98, 121/97, 83/97, 53/97, 34/97, 33/97 and MF/MICT Order 314/95; and Central
Bank Circular no. 2601. These measures provide for the payment of export subsidies through interest
rate equalization and export financing programmes under PROEX. The Government of Canada
requested WTO consultations to address its concerns that these export subsidies were inconsistent with
Brazil's obligations under the Agreement on Subsidies and Countervailing Measures (SCM Agreement).
Canada and Brazil held consultations in Geneva on 22 July 1996 and 25 July 1996 with a view
to reaching a mutually satisfactory resolution of th e matter. Additional consultations were held in
Geneva on 4 November 1996, Brasilia on 21-22 November 1996, Rio de Janeiro on 8-9 June 1998, and
Washington D.C. on 25-26 June 1998. Unfortunately, the consultations have failed to settle the dispute.
Pursuant to Articles 4 and 30 of the SCM Agreement, Canada requests that a Panel be
established at the meeting of the DSB scheduled for 23 July 1998.
Canada further requests that the Panel consider and find that export subsidies under PROEX are
inconsistent with Article 3 of the SCM Agreement. If the Panel so finds, Canada also requests that the
Panel recommend that export subsidies under PROE X be withdrawn or term inated without delay
pursuant to Article 4 of the SCM Agreement.

Canada asks that the Panel be immediately established in accordance with the accelerated
procedure set out in Article 4 of the SCM Agreemen t with the standard terms of reference set out in
Article 7 of the DSU. Canada further asks that this request for the establishment of a Panel be inscribed
on the agenda of the meeting of the DSB scheduled for 23 July 1998.