The president of Brazil, Jair Bolsonaro, signed a decree that allows the country to retaliate unilaterally in commercial disputes if the hearings are paralyzed in the World Trade Organization (WTO), the official newspaper published.
The Brazilian government said the move is because the WTO’s Appellate Body has ceased to function because the United States has blocked new appointments, meaning there are no arbitrators to resolve cases and appeals are left in a legal vacuum.
Countries that have lost trade disputes with Brazil are “exempt from consequences indefinitely simply because their appeals will not be considered,” the government said.
According to a statement issued by Bolsonaro’s office, the decree will allow Brazil to implement the favorable decisions that it obtained in the WTO, but that have not yet been implemented due to issues related to the appellate body.
An Economy Ministry source said the move opens the way for the country to take unilateral retaliation against India and Indonesia in trade disputes related to sugar and poultry, respectively.
Brazil has joined a provisional appeal system with other members, including the European Union and China, but countries such as India, Indonesia and the United States have not joined, 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, calling on New Delhi to conform to global rules, but the Asian country later claimed that I would appeal the decision.
Brazil was also waiting for Indonesia to adopt recommendations made by a panel following a dispute over the chicken market. Brazil requested WTO consultations with Indonesia as early as 2014 regarding the measures blocking its access to that market.
The South American country won the dispute, but Indonesia asked for “a reasonable period” to adopt its recommendations and in December 2020 appealed to the WTO’s appeal body.
“For now, these are the only two countries that we have won trade disputes against but ended up going to the appellate body,” the source said.
The provisional measure allows the suspension to be carried out in two situations. (with information from Valor/Brazil)