Brazil Takes US to WTO over Orange Juice Surcharges

Brazil orange juice The Brazilian government has decided to ask the World Trade Organization (WTO) to analyze the surcharges adopted by the United States in the case of Brazilian orange juice. The matter should be examined by a panel at the organization, a committee of specialists.

The government of Brazil has been enquiring about procedures by the US Department of Trade to define the dumping margins (predatory trade). According to the Ministry of Foreign Relations (Itamaraty), the methods calculated "artificially" inflate these margins and harm Brazilian juice exports.

Through the practice known as zeroing, the US authorities exclude from the dumping transactions at export prices higher than those charged in the domestic market of the exporter.

For example, if a liter of juice sold for US$ 0.50 in Brazil is exported to the United States for US$ 1, the higher priced sale does not enter in the dumping calculation.

According to Brazil, zeroing results in surcharges to Brazilian juice that would not exist if the calculation were different. That is because the United States does not allow more expensive exports to compensate cheaper sales.

On using only lower prices as references, the North American authorities increase the dumping margin and inflate the surcharge calculation applied to concentrated frozen juice.

In a press statement, the Itamaraty stated that zeroing is incompatible with international credit norms. According to the Foreign Ministry, the WTO Dispute Settlement Body has condemned similar procedures adopted by Mexico, the European Union and the United States themselves.

Before calling for the panel, the Itamaraty made two inquiry rounds with the government of the United States, on January 16th and June 18th, 2009. According to the government of Brazil, talks did not generate results.

The Brazilian request should be analyzed by the Dispute Settlement Body of the WTO on August 31st. As the United States presented an objection, the panel should be established automatically in the organization's next meeting, scheduled for September.

Considered predatory practice, dumping consists in the import of products at prices below those charged in the country of origin. Competition with products abroad weakens sectors of the economy. The United States believe that Brazilian orange juice affects the North American product.

ABr

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