Bolsonaro signs executive order allowing retaliation in trade disputes at the WTO.
The government claims the measure was taken because of the paralysis of the work of the Appellate Body of the World Trade Organization.
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 the text of the provisional measure published in the Official Gazette this Thursday.
The Brazilian government said the measure was taken because the WTO Appellate Body had been paralyzed. This paralysis occurred because the United States blocked new appointments—meaning there are no members on the body to decide on disputes, and appeals are left in a legal vacuum.
The countries that lost trade disputes to Brazil are "exempt from the consequences indefinitely simply because their appeals will not be reviewed," 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 before the organization's appellate body.
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A source from the Ministry of Economy said that the measure paves the way for Brazil to unilaterally retaliate against India and Indonesia in trade disputes relating to sugar and poultry, respectively.
Brazil joined an interim recourse system with several other members, including the European Union and China, but countries like India, Indonesia, and the United States did not join—effectively blocking any agreement.
In December, a WTO panel ruled in favor of Brazil, Australia, and Guatemala in their 2019 trade disputes with India over sugar subsidies and called on New Delhi to act in accordance with global rules, but the country later said it would appeal the decision.
Brazil was also hoping that Indonesia would adopt the recommendations made by a panel following a dispute over chicken trade. Brazil requested WTO consultations with Indonesia in 2014 regarding measures that were blocking its access to that 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 appellate body.
"For now, these are the only two countries against which we have won trade disputes, but which ended up appealing to the appeals body," the source said.
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