International Trade

International Trade: Brazil

Alexandre Lira and Lucas Emboaba

LIRA Attorneys at Law

All questions

1. Is your country a member of the WTO or is it currently negotiating its accession?

Brazil

Yes, Brazil has been a member of the WTO since 1995.

Answer contributed by Alexandre Lira and Lucas Emboaba

2. Is your country a participant of the WTO’s Information Technology Agreement (ITA) or seeking to adhere to it? If your country is a participant of the ITA, is your country among those members that concluded an expansion of the ITA at the December 2015 Nairobi Ministerial Conference?

Brazil

Brazil is not a signatory to the WTO’s Information Technology Agreement (ITA).

Answer contributed by Alexandre Lira and Lucas Emboaba

3. Is your country a participant in the WTO’s Government Procurement Agreement (GPA) or does it have the formal status of observer of the GPA, seeking to adhere to it?

Brazil

Brazil is not a participant of the WTO’s Government Procurement Agreement (GPA), but the country has been accepted as an observer by the GPA Committee on 18 October 2017.

Answer contributed by Alexandre Lira and Lucas Emboaba

4. Provided your country has already ratified the Trade Facilitation Agreement (TFA), what is your country’s status with regard to implementation of specific TFA provisions? Are there any for which your country has notified the WTO that it will implement only after a transition period?

Brazil

Yes, Brazil ratified the WTO’s Trade Facilitation Agreement (TFA) on 29 March 2016, after its acceptance by the National Legislative Congress. Brazilian Customs has officially notified the WTO that almost all the commitments (up to 95 per cent) of the Agreement were classified as Category A – measures already in place and in accordance with the Agreement – and only three articles were at Category B classification, which include articles that need a transitional period of one year to be implemented by the country.

However, this is not the feeling in the private sector, which is historically shown by the World Bank’s rank “Doing Business”, where in its criteria “Trading Across Borders” grades Brazil, one of the 10 largest economies in the world, in 124th position, which is a poor standing. More recently, the National Confederation of Industry (CNI) has been advocating urgency to resolve these breaches, with implementation of the TFA.

The TFA was due to be fully implemented in Brazil in 2019.

Nonetheless, Brazilian Customs has already made great advance by starting the “Single Foreign Trade Portal” software, as well as the gradual introduction of a single import declaration (DUIMP), which is expected to be fully operational in 2021. This initiative created a new modern and simplified procedure that is awaited by the private sector, considering it will save time and money by reducing government bureaucracy.

Answer contributed by Alexandre Lira and Lucas Emboaba

5. What are the benefits and disadvantages that you expect to flow from the TFA for businesses from your country?

Brazil

Brazil has a bureaucratic tradition regarding international trade, which lead to gaps in procedures, regulations, formalities, controls or requirements related to customs operations. In this scenario, the TFA did not bring any disadvantages – on the contrary: it has only created benefits for making business in Brazil.

Brazil is implementing some trade facilitation measures, managed by the National Committee on Trade Facilitation (CONFAC). This Committee was created in 2016 with the aim of guiding, coordinating, harmonising and supervising the operational activities of the federal administration related to imports and exports to guarantee the implementation of the Trade Facilitation Agreement. It composed by representatives of the: (i) Ministry of Economy; (ii) Ministry of Foreign Affairs; (iii) Presidency of the Republic; (iv) Ministry of Agriculture; and (v) Federal Chamber of Commerce (CAMEX) Executive Secretariat. The Committee has a Cooperation Subcommittee with selected members from the private sector and from other government agencies to identify gaps and to propose improvements.

The following points highlight the outcome of those trade facilitation initiatives.

Single window

Brazilian Customs systems are being integrated with other government agency systems, reducing time and bureaucracy. The Single Foreign Trade Portal software was released in March 2017 and simplifies the procedures for import and export operations, eliminates duplication of documents and procedures and reduces government requirements. It is expected to reduce bureaucracy in Brazilian Customs operations, reducing costs and clearance time.

The changes started with the use of a single export declaration (DUE) in 2017 and in October 2018 a pilot project for the use of a single import declaration (DUIMP) was launched. The current Customs software (called Siscomex) is expected to be discontinued in 2021, and DUIMP will be gradually introduced as the new import declaration standard in Brazil. The new import procedure will also have a new import licensing procedure and will allow centralised payments, bringing a new mindset in the provision of information and controls, granting both more effectiveness in risk management by Brazilian Customs and trade facilitation for the private sector.

Implementation of the AEO programme

Currently, the Brazilian AEO programme can be seen as a great success, encompassing around 300 major enterprises, among the main importers, exporters and manufacturers based in Brazil. The validation process got mature, the certification is starting to follow a predictable timeline and the benefits are strong and dynamic, since Customs favours AEO companies for the new developments, granting advantages where possible.

The Brazilian Authorised Economic Operator programme (AEO) was designed to be launched in phases, starting in 2015 (supply chain security), with one step in 2016 (customs compliance requirements) and its conclusion in 2017 (integration of other governmental intervenient agencies). The first two stages were concluded in good time, but integration with other agencies is taking longer.

The TFA previews the existence of an AEO programme as an imperative measure for the Customs administrations all over the world and establishes the minimum benefits the programmes must grant importers and exporters (simplified documents, fewer inspections, faster release time, reduced guarantees, monthly declarations, customs clearance in other areas).

The entry into force of the TFA strengthens the Brazilian AEO programme, since the international law obliges Brazilian Customs to grant benefits to companies accredited as authorised economic operators.

Brazilian Customs simplifications

The TFA is stimulating revisions of Brazilian Customs software and regulations. New modules for upload of import and export declarations have been launched as well as a new import licensing system. There are efforts to review customs regulations to make the process simpler.

One example of this is these efforts was the Time Release Study carried out by Brazil Customs, developed according to the methodology of the WCO. The study represents a milestone in the Brazilian Customs Administration insofar as relevant information is offered to all foreign trade audiences, both Brazilian and international, expanding transparency and engaging the various actors in the process in search of improvements.

Brazil's accession to the Revised Kyoto Convention 

The Revised Kyoto Convention (RKC, aka the international convention on the simplification and harmonisation of Customs procedures) “is the is the blueprint for modern and efficient Customs procedures in the 21st century”, as stated on the World Customs Organization (WCO)’s website. Administered by the WCO, entered into force in 2006 and presently includes 118 contracting parties, and is seen by Customs Law experts as the technical basis of the WTO Trade Facilitation Agreement.

The Convention was recently approved by the Congress and was enacted by the President on 13 March 2020. The accession is much welcomed and needs to be celebrated. The bidding principles and international standards of simplification, facilitation and transparency to be brought to local Customs regulations and practices by the WCO’s Convention will simplify Brazilian trade.

Together with the WTO, TFA implementation and the start of operations of the Single Foreign Trade Portal Customs software, the Brazilian trade community expects the RKC implementation to be the game changer to raise Brazil's ranking as a business-friendly environment for imports and exports.

Answer contributed by Alexandre Lira and Lucas Emboaba

6. Please provide a brief description of the customs duty structure maintained by your country. To what extent is it similar to, or has it been influenced by, that of your main trading partners?

Brazil

Despite the standardisation of trade procedures arising from the WTO membership mentioned in the previous question, the duties levied on imports are idiosyncratic, owing to the value added tax (VAT) structure, which, at times, is not logical. Therefore, it is not possible to infer that the Brazilian duty structure is similar to or influenced by its trade partners. The Brazilian customs duty structure is, in simple terms, as follows:

  • Import duty – a federal tax based on the GATT Customs Valuation Agreement, complying with GATT’s 35 per cent rate limitation, being the rate determined by the customs classification (Brazil follows the GATT Harmonized System Agreement, with Mercosur’s local addition of two digits). The dutiable base is the customs value (transaction value, added to by the cost of international insurance and transportation). The taxes below make up Brazilian VAT, which is managed through a debit/credit criteria:
    • Industrialised Products Tax (IPI) – The dutiable base is the customs value, added to the payable amount of import duty (federal tax);  
    • Federal Contributions (PIS–COFINS) – The dutiable base is the customs value. In some cases the full tax credit is prevented, making part of the VAT to become cost, which is against the Brazilian Constitution, currently a litigation subject in federal courts in Brazil (federal tax); and  
    • Merchandise circulation tax (ICMS) – The dutiable base is the customs value, added to the payable amount of IPI and federal contributions. This tax is levied by state where the customs clearance is done (Brazil is a federation divided in 26 states and the federal district).

Answer contributed by Alexandre Lira and Lucas Emboaba

7. Does your country maintain an import licensing regime?

Brazil

Brazil has an import licensing regime. As a rule, goods are exempt from import licensing. Exceptions apply, such as duty drawback imports, certain controlled products, used machinery and goods subject to import restrictions such as quotas or import duty reduction. All licensing applications are made through Brazilian Customs software, which can be accessed online.

With the new import procedure, it will be possible to register a single import licensing for several (frequent) shipments of the same or similar goods (that have the same characteristics) and to register the DUIMP before the licensing is granted, but it will only be cleared after its linking with the licensing.

Answer contributed by Alexandre Lira and Lucas Emboaba

8. Please explain the export control regime in place in your jurisdiction, including whether it applies to dual-use items.

Brazil

Brazil is party to some regional and multilateral treaties, conventions, protocols and agreements regarding the control of sensitive goods for the non-proliferation of weapons of mass destruction, as listed below:

  • the Treaty for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (Tlatelolco Treaty);
  • the Nuclear Non-Proliferation Treaty;
  • the Chemical Weapons Convention;
  • the Biological Weapons Convention;
  • the Nuclear Suppliers Group;
  • the Missile Technology Control Regime;
  • the Comprehensive Nuclear Test Ban Treaty;
  • the Geneva Protocol; and
  • the United Nations Security Council Resolution 1540.

Additionally, Brazil is member of a number of international organisations related to the control of sensitive goods, namely, the Agency for Prohibition of Nuclear Weapons in Latin America and Caribbean, the United Nations, the International Atomic Energy Agency and the Organization for the Prohibition of Chemical Weapons.

However, Brazil is not a contracting party to the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies.

Brazil has a broad definition of sensitive goods, which includes all materials, equipment and products that may be used in programmes for the development or manufacture of weapons of mass destruction, nuclear, chemical or biological use, including dual-use goods (goods that can be used for war purposes, even if they have been developed for civilian applications), as well as all related services and technological development of such weapons.

Brazilian exports are registered via Brazilian Custome software. From this interface, the exporters register the transactions before requiring an export licence, if necessary. Export controls in Brazil have not been the subject of mainstream adherence, the majority of regulators and customs agents almost always ignore the export control treaties to which Brazil is a party. Weapons, firearms, chemical items and nuclear artifacts are controlled by the Brazilian export system. Dual-use items are only controlled if part of a list, which is not updated regularly.

To export the items included in the list, in addition to the procedure mentioned above, it is necessary to obtain a prior formal consent from the federal authorities under the specific regulations, as well as provide the necessary documentation to ensure the final use of that product or service.

Answer contributed by Alexandre Lira and Lucas Emboaba

9. Has your country ever renegotiated its scheduled concessions under GATT article XXVIII? If so, could you please provide details?

Brazil

To date, Brazil has not negotiated any concessions under the aforementioned article. If negotiations ever took place, these were not made public nor released by the press.

Answer contributed by Alexandre Lira and Lucas Emboaba

10. Has your country been involved in any WTO disputes either as a complainant, defendant or third party? Please highlight the most prominent instances of such participation.

Brazil

So far, Brazil has been involved in 33 disputes as complainant and in 16 disputes as respondent. Brazil is also a frequent participant of the Dispute Settlement Body as third party (147).

The most important disputes involving Brazil are the ones related to subsidies granted to the commercialisation of civil aircraft against Canada (DS46, DS70/DS71 and DS222), to the Subsidies on Upland Cotton – US (DS267), and, more recently, the dispute with Japan and the European Union (EU) regarding taxation and charges in the automotive sector, the electronics and technology industry, goods produced in Free Trade Zones and tax advantages for exporters (DS472 and DS497[L-LE1]).

In the first civil aircraft dispute (DS46), Canada claimed that the Brazilian export financing scheme, known as PROEX, was subsidising the Embraer aircraft sales, which is forbidden under the Subsidies and Countervailing Measures Agreement (SCM) of the WTO. Brazil was forced to review the PROEX programme to comply with the WTO dispute settlement ruling.

In the second dispute (DS70), Brazil alleged that certain subsidies granted by the government of Canada or its provinces intended to support the export of civilian aircraft were inconsistent with the SCM Agreement. The panel found that certain of Canada’s measures were inconsistent with the SCM Agreement, but rejected Brazil’s claim that EDC assistance to the Canadian regional aircraft industry constitutes export subsidies. 

In a third dispute on subsidies granted by the Canadian government to the regional aircraft industry brought by Brazil (DS222), the panel found that some of the alleged subsidies were in fact inconsistent with the SCM Agreement. Since Canada has not withdrawn the subsidies, Brazil requested the suspension of concessions to the dispute settlement body. So far, Brazil has not proceeded with the suspension of concessions against Canada.

In US-Cotton (DS267), Brazil made a bold move to question and challenge illegal US subsidies paid to cotton exporters, resulting in export pricing distortion, which is forbidden under WTO law. Brazil won this dispute; nevertheless, the US did not withdraw the subsidies. Brazil needed to request the authorisation to apply a cross-retaliation on intellectual property rights, which was not implemented. Just recently the US and Brazil have agreed on a consensus solution to this case.

Finally, in the Japan–EU–Brazil case (DS472 and DS497[L-LE1]), complaints were filed regarding seven of Brazil’s industrial subsidy programmes settled originally during Dilma Rouseff’s government: (i) the Incentive Programme for Technological Innovation and Strengthening of the Automotive Vehicle Production Chain (Inovar-Auto); (ii) benefits from Brazil’s Informatics Law; (iii) the Semiconductor Sector Incentive Programme (Padis); (iv) the Support Programme for Technological Development of the Digital TV Equipment (PATVD); (v) the digital inclusion programme; (vi) the Preponderantly Exporter Programme (PEC); and (vii) the Special Regime For the Acquisition of Capital Goods for Exporting Companies (Recap).

In January 2019, WTO’s Dispute Settlement Body adopted the conclusions of the Appellate Body and declared unlawful the Inovar-Auto automotive programme, the benefits from Brazil’s Informatics Law, Padis, PATVD and the digital inclusion programme, under the argument that those programmes violated GATT rules, such as the national treatment principle, which prohibits the application of separate tax and administrative treatment between national and imported programmes on the basis of their nationality.

At the time of the decision, Inovar-Auto, PATVD and the digital inclusion programmes no longer existed. However, it had a major impact on the tax reduction subsidies related to the Basic Productive Processes’(PPB) of Brazil’s Informatics Law and Padis. The PPB consists of the minimum necessary manufacturing steps and commonly includes the use of national input for manufacture of incentivised products – in practice, what is required is the existence of local content, for the benefit of the domestic market.


[L-LE1]https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds472_e.htm

https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds497_e.htm

[L-LE1]https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds472_e.htm

https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds497_e.htm

Answer contributed by Alexandre Lira and Lucas Emboaba

11. How would you evaluate the compliance record of your country with WTO dispute settlement reports? To the extent that you identify a track record of delayed or incomplete implementation, what are the main factors explaining this feature?

Brazil

Brazil has a very good compliance record with the dispute settlement reports.

There are some exceptions, such as the civil aircraft dispute, where Brazil was forced to review and change its PROEX export financing system in 90 days, but only changed the programme some years after the ruling.

However, Brazil does have a culture of complying with WTO’s decisions. A recent example regards WTO’s recent decision in the Japan-EU-Brazil case: on 10 May 2019, Brazil signed an agreement and committed to eliminate the convicted PPB by 21 June 2019 (the federal government has already eliminated most of the illegal PPB) and its tax benefits by 31 December 2019.

Answer contributed by Alexandre Lira and Lucas Emboaba

12. Are you aware of any ongoing or planned revisions of the rules on anti-dumping, countervailing and safeguard duty investigations in your jurisdiction?

Brazil

Brazil has adopted an over-protective approach in the application of trade remedies in the past 12 years. The antidumping rules were revised in 2013. In 2015, Brazil adopted a digital system for accessing case records and filing documents in trade remedy investigations. The rules on subsidies and countervailing measures were subject to a public consultation in the beginning of 2017, which indicates the government’s intention of revising the current rules.  

Answer contributed by Alexandre Lira and Lucas Emboaba

13. Do you anticipate any forthcoming legal action before the WTO involving your country as a defendant or complainant with respect to one or more of the three types of trade remedies?

Brazil

Brazil has been involved in several WTO disputes on the three types of trade remedies. The trade remedy disputes in which Brazil was complainant or defendant are as follows:

Disputes involving trade remedies in which Brazil was a plaintiff

  • Peru – Countervailing Duty Investigation against Imports of Buses from Brazil (DS112);  
  • United States – Continued Dumping and Subsidy Offset Act of 2000 (DS217);  
  • United States – Countervailing Duties on Certain Carbon Steel Products from Brazil (DS218);  
  • Turkey – Anti-Dumping Duty on Steel and Iron Pipe Fittings (DS208);  
  • Mexico – Provisional Anti-Dumping Measure on Electric Transformers (DS216);  
  • United States – Continued Dumping and Subsidy Offset Act of 2000 (DS217);  
  • European Communities – Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil (DS219);   
  • United States – Anti-Dumping Duties on Silicon Metal from Brazil (DS239);  
  • Argentina – Definitive Anti-Dumping Duties on Poultry from Brazil (DS241);  
  • United States – Definitive Safeguard Measures on Imports of Certain Steel Products (DS259);  
  • United States – Anti-Dumping Administrative Reviews and Other Measures Related to Imports of Certain Orange Juice from Brazil (DS382);  
  • South Africa – Anti-Dumping Duties on Frozen Meat of Fowls from Brazil (DS439); and  
  • United States – Countervailing Measures on Cold- and Hot-Rolled Steel Flat Products from Brazil (DS514).

Disputes involving trade remedies in which Brazil was a defendant

  • Measures Affecting Desiccated Coconut (Brazil – Desiccated Coconut) (DS22);  
  • Countervailing Duties on Imports of Desiccated Coconut and Coconut (DS30);
  • Anti-Dumping Duties on Jute Bags from India (DS229); and  
  • Anti-dumping Measures on Imports of Certain Resins from Argentina (DS355).

Currently, we cannot anticipate any forthcoming legal action before the WTO involving Brazil either as a defendant or complainant with respect to the trade remedies.

Answer contributed by Alexandre Lira and Lucas Emboaba

14. What are the main agricultural subsidies maintained by your country? Are they being phased out?

Brazil

Brazil only provides agricultural subsidies via interest rate reduction to agricultural producers. The interest rate reduction is not considered an illegal subsidy under the WTO SCM Agreement because the Brazilian official interest rate is very high and the final value of the interest reduction is considered small. Brazilian agricultural production is very competitive due to the use of technology and production mechanisation and not due to subsidies.

Answer contributed by Alexandre Lira and Lucas Emboaba

15. Which are the bilateral trade agreements your country is currently a party to or which it is in the process of negotiating?

Brazil

Brazil recently concluded the negotiation of the free trade agreement with the European Union, the largest agreement between economic blocs in history. It also represents the most significant agreement concluded by the EU in terms of size.

The agreement was signed on 26 June 2019, but it is still pending ratification by all Mercosur and EU members.

However, due to the controversy surrounding the growing rates of deforestation in Brazil, there is some political resistance to ratification of the agreement from some European countries and economic sectors, that are demanding the current Brazilian government for changes in its environmental policies.

With the agreement the Mercosur countries and the European Union will form one of the largest free trade zones on the planet. Together, the two blocs represent about 25 per cent of the world economy and a market of 780 million people.

The free trade agreement will eliminate import tariffs for more than 90 per cent of the products traded between the two blocs, which should strongly boost trade between the two continents.

Before that, Brazil put a lot of effort into discussions at WTO’s multilateral negotiations and in the Mercosur and neglected the bilateral trade agreements. It has been roughly 20 years of multilateral effort without a significant result. Brazil still performs poorly when it comes to international trade, and the multilateral negotiations preference has been heavily criticised by Brazilian businesses, which would prefer bilateral or regional trade agreements to multilateral ones.

Brazil cannot negotiate bilateral trade agreements on its own but only through Mercosur. The only exception are the bilateral trade agreements executed with Latin American Integration Association (ALADI) countries prior to the creation of Mercosur.

The bilateral trade agreements to which Brazil is currently a party that are relevant in terms of trade are those executed with Argentina, Mexico and Uruguay. These agreements are dedicated specifically to motor vehicles and auto parts.

Mercosur has small preferential agreements with India, Israel, SACU, Egypt and Colombia. Another free trade agreement has been negotiated by Mercosur but are not yet in effect, namely Mercosur/Palestine.

Currently, Mercosur is negotiating an extensive free trade agreement with Lebanon, Tunisia, Singapore and with the EFTA (European Free Trade Association), and the expansion of the agreement with India and Mexico. Recently, there were public consultations regarding free trade agreements with Japan, South Korea and Canada.

Answer contributed by Alexandre Lira and Lucas Emboaba

16. To what extent do you expect that Brexit will affect trade between your country and the United Kingdom and the European Union? Is your country negotiating or planning to negotiate a bilateral trade agreement with the UK?

Brazil

On 28 March 2018, the United Kingdom Secretary of State for International Trade, Dr Liam Fox, and the Brazilian Minister for Industry, Foreign Trade and Services, Marcos Jorge de Lima, co-chaired the tenth UK-Brazil Joint Economic and Trade Committee (JETCO) meeting held in London. During the meeting the ministers reiterated their commitment to engage further on facilitating increased trade, creating opportunities and enhancing bilateral economic relations.

Additionally, in support of continuity and certainty in the UK–Brazil economic and trade relationship, the countries agreed to work closely to ensure the continuation of important EU agreements as the UK leaves the EU, but there is no concrete plan for Brazil or Mercosur to negotiate a bilateral trade agreement with the UK.

As mentioned before, the European Union just concluded, on 26 June 2019, the negotiation of a free trade agreement with Brazil as part of the EU's Association Agreement negotiations with the Mercosur countries. With the agreement, the expectations are of a great growth, even because the EU is Brazil's second-biggest trading partner, accounting for 18.3 per cent of its total trade.

The British ambassador to Brazil stated that the United Kingdom welcomes the political agreement on the Free Trade Agreement between the European Union and Mercosur, but now, with Brexit, Brazil will need to work on the negotiation of a trade agreement with the UK. Recently, the Brazilian Minister for Economy, Paulo Guedes, confirmed that there are negotiations with the UK and that both parties expect the agreement to come out with urgency.

Answer contributed by Alexandre Lira and Lucas Emboaba

17. Is your country party to any regional trade agreements or in the process of negotiating its accession to one?

Brazil

Brazil is part of Mercosur, a regional agreement in which Argentina, Uruguay, Paraguay and Venezuela are also members.

Mercosur is, at present, a free trade agreement, but since its enactment, the parties have aimed to constitute a customs union. However, the four original members have never achieved agreement in what seem sensible negotiations, such as customs revenue sharing, and this has hindered the upgrade.

To date, with the accession and suspension of Venezuela to the block and financial crises that have affected some of the members, the goal of a customs union is very unlikely to happen. This means that traders currently need to face customs controls to sell to a neighbouring market and only original goods can be imported without duties.

Also, Mercosur has just negotiated a free trade agreement with the European Union. The pact is under review and translation and is due to be sent to the parliaments of all countries involved.

Answer contributed by Alexandre Lira and Lucas Emboaba

18. If your country is a signatory to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), has your country ratified, and, if not, when do you expect it to do so?

Brazil

Brazil is not among the signatories of the CPTPP. 

Answer contributed by Alexandre Lira and Lucas Emboaba

19. What are the benefits and disadvantages that you expect to flow from the future entry into force of the CPTPP for businesses from your country?

Brazil

Not applicable, since Brazil is not among the signatories of the CPPP.

Answer contributed by Alexandre Lira and Lucas Emboaba

20. If your country is not a member of the CPTPP, do you expect any trade currently enjoyed by your industries to be negatively impacted by increased trade in those products among members of the CPTPP?

Brazil

Being a great exporter of agricultural products and commodities, by not adhering to the CPTPP, Brazil will lose important markets in agriculture and primary goods. Among the signatory countries of the CPTPP there are many important agricultural producers, such as Vietnam and Australia. CPTPP countries will be looking to purchase from other CPTPP countries, rather than from Brazil, owing to the trade preferences granted to the parties to this agreement.

Moreover, if the CPTPP enters into force, Brazil will face more competition in the consumer-goods markets in Peru, Chile and Mexico; a tougher market access for machinery and equipment in Chile and Peru; are likely to suffer more from competition in the Mexican automotive sector.

Answer contributed by Alexandre Lira and Lucas Emboaba

21. Does your jurisdiction benefit from the Generalised System of Preferences maintained by the European Union and the United States and other developed economies? Does your jurisdiction maintain a similar system with respect to third countries?

Brazil

Brazil is one of the beneficiary countries of the General System of Preferences maintained by the United States that has benefitted hundreds of Brazilian products, which was extended until December 2020. However, since January 2014, Brazil has not benefitted from the General System of Preferences maintained by the European Union.

Brazil also benefits from GSP maintained by Eurasian Customs Union (Kazakhstan, Russia and Belarus), Switzerland, Japan, Turkey, Canada, Norway, New Zealand and Australia.

Brazil maintains a similar system with respect to third countries with an agreement signed by 40 countries on 13 April 1988, in Belgrade, Yugoslavia. This agreement, constituting the Global System of Trade Preferences among Developing Countries under the United Nations Conference on Trade and Development, became effective on 19 April 1989.

Answer contributed by Alexandre Lira and Lucas Emboaba

22. How has the bilateral trading relationship between your country and the United States been affected during the first three years of the Trump administration in the United States? Which sectors have been particularly affected and why?

Brazil

There was no change in the relationship between Brazil and United States due to the change in administration in the United States. The Unites States remains one of Brazil's most important trade partners.

In June 2019, Brazil eliminated the visa requirement for US tourists arriving in Brazil. The decision, however, breaks the principle of reciprocity adopted historically by Brazilian diplomacy, which means that Brazilians will still need a visa to travel to the US.

Answer contributed by Alexandre Lira and Lucas Emboaba

23. To what extent has your country been affected by the United States’ decision, in March 2018, to impose tariffs on steel and aluminium? Has your country negotiated with the US government to obtain an exemption from the tariffs or to implement a quota on exports? In reaction to the US tariffs, has your country imposed any retaliatory tariffs against imports from the United States?

Brazil

Brazil has been affected by the United States’ decision, in March 2018, to impose tariffs on steel and aluminium, considering the direct application of restrictive measures to Brazilian exports.

The Brazilian government is convinced that in addition to the negative impact on Brazilian exports and on bilateral trade, it would be harmful to the integration of the productive sectors of both countries and sectors of the US economy that use commodities from Brazil.

The Brazilian government considers that the application of the restrictions on Brazilian exports is not justified and remains open to construct solutions that better meet the expectations and needs of both the steel and aluminium sectors in Brazil and the United States, reserving their rights in the bilateral and multilateral sphere.

The main argument was that 80 per cent of the steel exported to the US is semi-finished, that is, commodities to the US local industry. With the end of the negotiations, only two options remain: a surcharge or a quota.

Brazil has not shown any will to impose retaliatory tariffs against imports from the United States.

Answer contributed by Alexandre Lira and Lucas Emboaba

24. What is the position of your country as well as that of businesses from your country on the long-standing debate on currency manipulation? Are you aware of any legislative proposals in your country similar to those recently concluded in the US that would allow the investigating authority to take into account the devaluation of a foreign currency in anti-subsidy investigations to address the issue via unilateral trade remedies? Do you believe that this is an issue the WTO should become more actively engaged in?

Brazil

The Brazilian government and businesses used to stand side by side on this issue, complaining that currency manipulation has endangered mid- to long-term export strategies. From a customs and international trade perspective that point was disproved, as Brazil currently faces an economic crisis and the local currency has devalued sharply against the US dollar and the euro. Brazil was expected to leverage its exports and gain market access with a devalued export price, but that did not happen and the overall trade value has shrunk on imports and exports. Brazil has not come up with any unilateral plan to deal with the issue and the subject is not on the government’s priority agenda.

In 2011, Brazil raised the issue within the WTO, alleging that the Chinese yuan's undervaluation is seriously damaging Brazil's manufacturing base, and the members agreed to hold a meeting on the topic. To date, no decision has been reached.

Answer contributed by Alexandre Lira and Lucas Emboaba

25. How are trademarks and geographical indications protected in your jurisdiction? What are the main steps for registration of trademarks and geographical indications? Has the protection of trademarks and geographical indications in your jurisdiction changed since the WTO came into being?

Brazil

Trademarks and geographical indications are protected by the Federal Constitution, federal laws (Industrial Property Law, Copyright Law, Software Law and Plant Cultivar Protection Law) and international agreements.

In Brazil, trademark protection is granted to those that register the trademark with the Brazilian Patent and Trademark Office (BPTO). Regarding the trademark registration process, all applications may be filed with the BPTO, at any time.

The registration of geographical indications on the BPTO protects geographical regions in Brazil, according to the Brazilian Industrial Property Law, in force since 1997.

Answer contributed by Alexandre Lira and Lucas Emboaba

26. How are other intellectual property rights enforced in your jurisdiction?

Brazil

In Brazil, there are three procedures where intellectual property rights may be enforced in Brazil: arbitration, civil actions and criminal prosecutions.

Arbitration is very uncommon in IP cases because both parties need to agree to the dispute settlement.

With civil actions, taking into consideration that laws relating to trade name registration and protection are contained within the Brazilian Civil Code and that there are no special courts that exclusively deal with IP-related cases, all IP cases are judged by ordinary civil courts in Brazil.

Criminal prosecutions enforce property rights in Brazil. The Brazilian Criminal Code brings severe penalties for infringers, including imprisonment and fines. Brazilian Customs play an important part in IP enforcement in Brazil, because they can seize, ex officio, infringing import or export products.

Answer contributed by Alexandre Lira and Lucas Emboaba

27. Has your country ever imposed restrictions on trade in services or trade in goods due to balance-of-payments and external financial difficulties? Please explain the related provisions under domestic law.

Brazil

No, that has never happened in Brazil.

Answer contributed by Alexandre Lira and Lucas Emboaba

28. What effect in very general terms is the covid-19 pandemic likely to have in this practice area in your jurisdiction in the medium term, specifically regarding sectoral impacts; trade levels with major trading partners; restrictions on exportation/importation of PPE, pharmaceuticals and other goods and commodities; and the availability of short- and medium-term export credit insurance?

Brazil

The covid-19 crisis impacted has caused a great impact in the public health system in Brazil, causing the states to enact measures of social distancing in March 2020 (which are currently starting to be relaxed), as well as Brazil’s Customs measures to facilitate the import of products, pharmaceuticals, PPE and health equipment necessary to fight the pandemic, and measures to prohibit the export of such goods.

The pandemic restrictions also affected drastically many economic sectors in Brazil, such as aviation and tourism, considering the restriction on the circulation of people. The industrial and agricultural and agriculture has also been affected, due to decreased economic activity, lack of supply and demand regarding major trading partners,

In this context, Brazil is taking effort in implementing measures to decrease taxes and simplify or provisionally suspend customs charges (such as specific requirements in special customs regimes) for companies and foreign trade operators. Those actions aimed at reducing the impacts of covid-19 are being compiled on the websites of the Ministry of Economy (https://www.gov.br/economia/pt-br/centrais-de-conteudo/publicacoes/boletins/covid-19/timeline) and Brazil’s Customs (https://receita.economia.gov.br/covid-19/covid-19/).

Answer contributed by Alexandre Lira and Lucas Emboaba

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