BRASILIA (Reuters) – President Jair Bolsonaro signed a provisional measure that allows the country to retaliate unilaterally in trade disputes if hearings on them are interrupted at the World Trade Organization (WTO), according to a text of the MP published in the Official Gazette on Thursday. .
The Brazilian government said the measure was taken because of the work stoppage of the WTO Appellate Body. That shutdown came because the United States has blocked new appointments — meaning there are no board members to decide disputes and appeals are left in a legal void.
Countries that lost trade disputes to Brazil are “exempt from the consequences indefinitely simply because their appeals will not be analyzed,” the government said.
According to a statement from the Presidency of the Republic, the provisional measure will allow Brazil to implement favorable decisions it obtained at the WTO, but which have not yet been implemented due to appeals in the entity’s appeal body.
An Economy Ministry source said the move paves the way for Brazil to unilaterally retaliate against India and Indonesia in trade disputes over sugar and poultry, respectively.
Brazil has joined an interim appeals system with several other members, including the European Union and China, but countries such as India, Indonesia and the United States have not joined — effectively blocking any deal.
In December, a WTO panel ruled in favor of Brazil, Australia and Guatemala in their 2019 trade disputes with India over sugar subsidies and urged New Delhi to act in accordance with global rules, but the country later said that would appeal the decision.
Brazil was also waiting for Indonesia to adopt recommendations made by a panel following a dispute over the chicken trade. Brazil requested WTO consultations with Indonesia in 2014 on measures blocking its access to this market.
Brasilia won the dispute, but Indonesia requested “a reasonable period of time” to adopt its recommendations and in December 2020 appealed to the WTO’s appeal body.
“For now, these are the only two countries we’ve won trade disputes against, but have ended up going to the appellate body,” the source said.
(Reporting by Marcela Ayres, in Brasília, additional reporting by Gabriel Araújo, in São Paulo, and Philip Blenkinsop, in Brussels)
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