Bridges Trade BioRes • Volume 6 • Number 16 • 22nd September 2006

Tyres Dispute Continues; Brazil Files Second Written Submission

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Brazil recently released its second written submission to the WTO in its dispute with the EU over trade in retreated tyres. The EU is challenging a number of measures — in particular the implementation of an import ban on retreaded tyres — claiming that they are incompatible with Brazil’s WTO obligations. Brazil defends the measures arguing that they are necessary to protect human health and the environment.

In the submission, which was filed on 11 August, Brazil reiterated that the questioned measures are justified under the General Agreement on Tariffs and Trade (GATT) Article XX. Under the heading ‘General Exceptions’, this provision grants Members the right to implement measures that are incompatible with their WTO obligations if they are not a disguised restriction on trade or applied in an arbitrary or discriminatory fashion, and if they are necessary (see Bridges Trade BioRes, 14 July 2006).

Questioning the actual contribution of the import ban to achieving Brazil’s aim of protecting public health and the environment, the EU has claimed that Brazilian national court rulings allowing for imports of used tyres detracts from the ban’s effectiveness (used tyres can be retreated and used once again in vehicles, and Brazil has a retreated tyres industry). Brazil refuted this a second time around, arguing that it had demonstrated clearly the vigorous work by the government to safeguard the integrity of the ban and that the High Court (so far) has upheld the legality of the ban. It noted that the view on the ban among higher and lower instance courts was now ‘nearly-unanimous’ before an expected ruling from the Supreme Court, which would also ban the import of used tyres.

Brazil further restated that no economically or environmentally sound alternatives to the ban exist and brushed off the EU’s claim of the contrary. It highlighted that the EU itself has not been able to identify any alternative that would allow Brazil to achieve its chosen level of protection in the sector.

Although the dispute is conducted behind closed doors — as are the vast majority of WTO cases — Brazil has distributed their submissions to the public, allowing for some degree of transparency in the proceedings.

The report of the panel is expected early next year.

For further information see http://www.trade-environment.org/page/theme/tewto/tyrescase.htm.

To access the Brazilian submissions — in Portuguese and English — visit http://www.mre.gov.br/portugues/ministerio/sitios_secretaria/cgc/pneus.asp.

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