Dec 1, 1987

BRAZIL SEEKS "CONSULTATIONS" WITH U.S. IN GATT.

GENEVA NOVEMBER 30 (IFDA) -- Brazil has formally sought "consultations" with the United States in GATT over the U.S. announced intentions to raise tariffs on some imports from Brazil and prohibit some other imports.

The U.S. is threatening to impose such sanctions against Brazil over Brazilís informatics policy, and particularly the restrictions on imports of U.S. computer hardware and software in cases where substitutes are available in Brazil.

This is a long-standing dispute between U.S. and Brazil, but in line with its recent policy of taking unilateral retaliatory actions, leaving it to the other party to yield or go to GATT, the U.S. recently announced its intention to take punitive retaliatory actions against Brazil and published a list of products that were being considered.

The consultations sought by Brazil under article XXIII: 1 of the general agreement is the formal preliminary step before raising a dispute and getting GATT to adjudicate on it.

In seeking formal consultations, and in a letter circulated to other GATT Contracting Parties, Brazil has said that the U.S. actions were in disregard of Brazilís rights and U.S. obligations under GATT.

The announcement of intended prohibitions, intended to cause a loss of 105 million U.S. dollars to Brazilian exports, and the publication of a list of Brazilian products (with a trade value of more 700 million dollars in 1986) that could be affected by these measures, was already disrupting trade and damaging Brazilian interests, the Brazilian communication contended.

The U.S. actions, Brazil added, was not consistent with the U.S. obligations under relevant GATT provisions, and constituted a "prima facie" case of nullification and impairment of benefits accruing to Brazil under the general agreement, in particular articles I, II, XXVIII and XXIII.

Article one requires GATT CPS to extend to each other most-favoured-nation treatment on tariff, non-tariff or other trade matters.

Article II relates to the schedule of tariffs Ė in this case U.S. tariffs on imports which are bound under GATT, and article XXVIII requires that prior to modification of such tariffs, the country wishing to modify should hold consultations with the affected parties.

Article XIII prohibits any discrimination in use of Quantitative Restrictions (QRS).

Article XXIII relates to nullification of impairment of GATT rights of a GATT CP because of the failure of another to carry out its obligations, application of any measures whether or not in conflict with provisions of GATT, or existence of any other situation that the complaining CP considers is nullifying or impairing benefits accruing to it directly or indirectly under the general agreement.