BRAZIL - CERTAIN MEASURES AFFECTING TRADE AND INVESTMENT IN THE AUTOMOTIVE SECTOR
Document: Request for Consultations by the United States
Date: 17 January 1997
Document codes: WT/DS65/1; G/L/139; G/SCM/D10/1; G/TRIMS/D/6
Complainant: U.S.
Respondent: Brazil
Dispute stage: Consultation
Agreements cited: Art. I, III  GATT 1994Art. 3, 27.4  Subsidies and Countervailing Measures (SCM)Art. 2  Trade-Related Investment Measures (TRIMs)

BRAZIL - CERTAIN MEASURES AFFECTING TRADE AND INVESTMENT
IN THE AUTOMOTIVE SECTOR
Request for Consultations by the United States
The following communication, dated 10 January 1997, from the Permanent Mission of the
United States to the Permanent Mission of Brazil and the Dispute Settlement Body, is circulated in
accordance with Article 4.4 of the DSU.
My authorities have instructed me to request bilateral consultations with the Government of
Brazil pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU"), Article XXIII:1 of the General Agreement on Tariffs and Trade 1994
("GATT 1994"), Article 8 of the Agreement on Trade-Related Investment Measures (the "TRIMs
Agreement") (to the extent Article 8 incorporates by reference Article XXIII of the GATT 1994), and
Articles 4.1, 7.1 and 30 of the Agreement on Subsidies and Countervailing Measures (the "Subsidies
Agreement") (to the extent Article 30 incorporates by reference Article XXIII of the GATT 1994),
regarding certain measures affecting trade and investment in the automotive sector implemented by
Brazil. The measures in question include Decree 1,987, issued 21 August 1996, and Provisional
Measure 1,532, issued 18 December 1996, as well as measures that extend or modify those measures;
and any modifications to the regime established under Provisional Measure 1,235 and Decree 1,761
that have been made subsequent to consultations held between the United States and Brazil pursuant
to the above-mentioned Articles on 13 August 1996. The measures in question provide, inter alia,
for benefitsto certain companies located in Japan, the Republic of Korea and the European Communities
in the form of reduced tariffs on a specified number of vehicles; benefits to companies investing in
automotive manufacturing facilities in the Northeast of Brazil; and benefits to manufacturers of motor
vehicles and parts, in the form of a reduction in duties on their imports of certain products, conditional
on compliance with average domestic content requirement, trade-balancing and local content requirements
with regard to inputs, and other criteria which may be imposed by the Ministry of Trade.
The United States considers that these measures violate the obligations of Brazil under Articles I:1
and III:4 of the GATT 1994,Article 2 of the TRIMs Agreement, and Articles3 and 27.4 of the Subsidies
Agreement. The United States also considers that these measures nullify or impair benefits accruing
to the United States directly or indirectly under Article II of GATT 1994 within the meaning of
Article XXIII:1(b) of GATT 1994. The United States reserves the right to raise additional factual
claims and legal matters during the course of the consultations.
We look forward to receiving your reply to this request and to fixing a mutually acceptable
date for consultations.