Brussels, 30/09/2015 (Agence Europe) - Like the EU in December 2014, Japan obtained the establishment of a WTO dispute settlement panel on Monday 28 September to examine its complaint against Brazil's tax regime - which favours Brazilian industry (DS 497).
Japan, like the EU, is targeting selective tax exemptions or reductions granted by Brazil which favour the Brazilian domestic industry and which, in Tokyo's opinion, have “serious trade-restrictive effects” on a wide range of products imported into Brazil from Japan and other WTO member countries. For Japan, these measures are inconsistent with Brazil's obligations under GATT 1994, the Trade-related Investment Measures agreement, and the WTO agreement on subsidies.
On Monday, Brazil defended its contested programmes as being part of its effort to foster economic development, in line with the WTO's objectives and principles. Brazil does not consider that its tax and regulatory regimes are linked to the domestic origin of products, but rather to the compliance, by interested companies, with targets related to technological innovation, workforce capacity-building, safety and sustainable development.
The EU - which lodged a similar complaint against Brazil and obtained the establishment of a dispute settlement panel in December 2014 to assess its complaint (DS 472) - has said that it shares Japan's concerns. Japan has said that it will accept the panel being set up to decide on its complaint to be composed of the same members as those on the panel assessing the EU's complaint.
Argentina, Australia, China, the EU, India, Russia, South Korea and the USA have reserved their third party rights for participating in the panel's work.
In its complaint against Brazil, the EU targets selective tax exemptions or reductions in several sectors including automobiles and ICT (see EUROPE 11220). (Original version in French by Emmanuel Hagry)