Brazil gained another victory in its war against protectionist barriers erected by the European Union (EU). The World Trade Organization (WTO) admitted that the country is right to complain about surcharges on sales of frozen salted chicken. In 2003, the EU raised its import tax rate on this product from 15.4% to 75%.
Brazil began to export frozen salted chicken to Europe in 1998, as a way to conserve the product better. As a result, these exports jumped from 41 thousand tons in 1997 to 183 thousand tons in 2001.
The growth in Brazilian sales to the region led the Europeans to change the rules of the game and alter the product’s classification, thus raising the import tax rate.
Faced with annual losses amounting to US$ 300 million, Brazil decided to appeal to the WTO to question the measure and won a favorable opinion. The preliminary report is confidential and was passed along to the interested parties.
According to the general coordinator of Litigation in the Ministry of Foreign Relations, Roberto Azevedo, the Brazilian government hopes that the tenor of the preliminary report will be maintained in the final version, scheduled to be issued on March 24. The European Union will still have the right to appeal the decision.
Last year Brazil won significant preliminary victories against the European Union, with respect to sugar exports, and the United States, accused of subsidizing cotton growers.
Translation: David Silberstein