WT/TPR/M/283/Add.1 16 October 2013

272 Pages·2013·1.22 MB·English

WT/TPR/M/283/Add.1

16 October 2013
(13-5674) Page: 1/272
Trade Policy Review Body Original: English/Spanish
24 and 26 June 2013 anglais/espagnol
ingles/español

TRADE POLICY REVIEW
BRAZIL
MINUTES OF THE MEETING
Addendum
Chairperson: H.E. Mr. Joakim Reiter (Sweden)

This document contains the advance written questions and additional questions by WTO
Members, and replies provided by Brazil.1

Organe d'examen des politiques commerciales
24 et 26 juin 2013
EXAMEN DES POLITIQUES COMMERCIALES
BRÉSIL
COMPTE RENDU DE LA RÉUNION
Addendum
Président: S.E. M. Joakim Reiter (Suède)

Le présent document contient les questions écrites communiquées à l'avance par les
Membres de l'OMC, leurs questions additionnelles, et les réponses fournies par le Brésil.1

Órgano de Examen de las Políticas Comerciales
24 y 26 de junio de 2013
EXAMEN DE LAS POLÍTICAS COMERCIALES
BRAZIL
ACTA DE LA REUNIÓN
Addendum
Presidente: Excmo. Sr. Joakim Reiter (Suecia)

En el presente documento figuran las preguntas presentadas anticipadamente por escrito y
las preguntas adicionales de los Miembros de la OMC, así como las respuestas facilitadas por el
Brazil.1

1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.
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ARGENTINA
WT/TPR/S/283
4.5 Servicios
- Servicios profesionales
Diversos estudios han identificado la escasez de recursos humanos calificados como uno
de los posibles futuros cuellos de botella al desarrollo de Brasil, dada la celeridad del
crecimiento de su economía y del desarrollo de grandes oportunidades productivas en
los próximos años.
Brasil ha atacado este problema con distintos programas educativos, entre los que se
destaca el programa "Ciencia sin Fronteras".
1. ¿Podría Brasil presentar brevemente en qué consiste este programa?
"Science Without Borders" aims to provide education and training of human resources at the best
universities and research institutions abroad. The program is geared for both undergraduate and
postgraduate students, as well as for university faculty members and researchers. The program
also aims at attracting young talents and highly qualified foreign researchers in areas and sectors
considered priorities, especially those with high technological content. The program has an
important participation of the private sector, through the supply of financial resources and the
offer of internships.
2. ¿Considera Brasil necesario facilitar el acceso temporal de profesionales paragraph
hacer frente a una demanda posiblemente creciente?
Brazil is streamlining procedures for the issuing of work permits for foreigners. In this regard, the
National Immigration Council (CGIg) enacted the Resolution nº 104/2013, which creates the
Electronic Registry of Companies (ERC), a tool that allows the electronic submission of documents.
ERC is in its final stage of implementation.
In addition to reviewing work permit procedures, the National Immigration Council conducts
studies to assess the need for skilled workers in specific niches.
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AUSTRALIA
WT/TPR/S/283
Australia commends Brazil on the relative transparency of its trading regime,
particularly with respect to industrial goods. Australia does, however, have concerns
about Brazil's reliance on local content schemes and the extent to which these schemes
are consistent with its WTO obligations. For example, in the Secretariat's report, we
note that at:
Page 53, paragraph 3.38 – import tariff concessions for capital goods and IT and
telecommunications equipment are linked to the level of domestic equipment content;
Page 71, paragraph 3.116 – indirect tax cash rebates and credits for exports are linked
to minimum import content requirements;
Page 10, paragraph 18 – access to export financing is subject to minimum local content
requirements;
Page 127, paragraph 4.42 – financial support to purchase equipment for the agriculture
sector is linked to the amount of domestic content the equipment contains;
Page 12, paragraph 29 – tax breaks for auto production are dictated by minimum local
content requirements;
Page 135, paragraph 4.79 – a range of industrial support programs are linked to
minimum local content requirements;
Page 12, paragraph 30 – extensive reliance on local content requirements are inherent
in programs aimed at supporting the energy sector;
Page 160, paragraph 4.198 – access to the right to provide telecommunications services
is linked to the installation of telecommunications systems and data networks that
contain a minimum level of local content; and
Page 166, paragraph 4.232 – financial benefits to the shipping industry are subject to
the use of local production and other local content requirements.
1. We recognise that Brazil has been asked about some of these schemes in the past
through other WTO processes. Nonetheless, could Brazil provide a detailed description
of all of the above programs? Further, could Brazil outline how each is consistent with
Brazil's WTO obligations (focusing, in particular, on those programs not previously
addressed, including, but not limited to, those said to replace earlier programs linked to
local content requirements)?
The Brazilian Government's programs are aimed at boosting technological development, innovation
and production of the Brazilian industry, in order to promote development of its economy. They do
not discriminate between foreign and domestic inputs. The broad, horizontal objectives pursued by
such programs include also increasing energy efficiency and diminishing the environmental impact
of the economy as a whole, expanding and modernizing infrastructure, promoting consumer
protection, supporting small and medium-sized enterprises and reducing socio-economic and
regional disparities.
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Summary
Trade Policy By Measure
Page 11, paragraph 24
2. We understand that, in April 2012, Brazil started a Pilot Programme of Priority
Examination of "Green Patents", which fast-tracks patent applications filed in Brazil (via
the Paris Convention for the Protection of Industrial Property by either residents or non-
residents). Can Brazil provide an update of how this Pilot Programme is progressing?
During the first year of the pilot program (04/2012-04/2013), INPI received 90 (ninety) requests
for priority examination of "green patents". In the second year of the pilot program, which started
on April, 2013, 14 (fourteen) applications requested priority examination, in a total of 104 (one
hundred and four) applications so far.
The first patent granted under the program was issued on March, 12, 2013, nine months after the
applicant's request for priority examination.
3 Trade Policies And Practices By Measure
3.2 Measures Directly Affecting Imports
3.2.3 Tariffs
3.2.3.1 Applied MFN tariff
Page 49, paragraph 3.34
3. Australia notes that Brazil's simple average applied MFN tariff has increased from
11.5% in 2008 to 11.7% in 2012. Australia also understands that Brazil recently
increased its tariffs on 100 tariff lines and may possibly implement increases on a
further 100 tariff lines. Can Brazil please advise what products are being considered for
inclusion in the additional 100 tariff lines?
The Brazilian government held public consultations regarding the claims made by the private
sector with a view to temporary tariff increase, under the terms of MERCOSUR Decision No. 25/12.
Products that have been the object of mentioned claims are listed in Annex II of the CAMEX
Resolution No. 12 of 08 February 2013.
3.2.3.3 Preferences
Page 52, paragraph 3.36
4. Australia understands that, in line with MERCOSUR rules, Brazil maintains a range
of temporary higher tariffs as an exemption to the CET. We also understand that the
scope for such derogations was increased with the adoption of a new MERCOSUR
mechanism. Can Brazil provide advice on the likely timeframe for restoring these tariffs
to standard CET rate? Does Brazil monitor the impact of these tariff increases on
consumer prices?
Both CMC Decisions No. 39/11 and 25/12 establish a mechanism for tariff adjustment for reasons
of trade imbalances derived from the international scenario. The mechanisms will expire
on December 31, 2014. The effects of tariff increases are analyzed under CAMEX, which monitors
these impacts.
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3.2.9 Sanitary and phytosanitary measures
Page 66, paragraph 90
5. Australia acknowledges Brazil's sound SPS processes and compliance with OIE,
IPPC and Codex standards. To improve transparency, does Brazil plan to develop a
statutory time frame for the pest risk analysis assessment process?
There are no plans to develop a statutory time frame for the pest risk analysis (PRA) assessment
process.
PRAs are complex processes extremely dependant on information concerning pests, plants, the
environment and the interaction among these elements.
The complexity of each PRA varies according to the commodity in question and its intended use, as
well as the quarantine pests that may be spread, and this makes the establishment of a single
timeframe impossible.
Agriculture has high economic importance in Brazil and requires solid, science-based measures for
its protection.
Page 66, paragraph 91
6. Australia appreciates Brazil's development of a system for electronic submission of
import authorization requests. With respect to wine, when will analysis certificates with
electronic signatures be able to be submitted?
The importing operations are registered and controlled by the "Sistema de Comercio Exterior"
(SISCOMEX). The controls established by MAPA are performed through non automatic licensing.
These procedures are constantly being improved.
3.4 Export Promotion And Marketing Assistance
3.4.5 Intellectual property rights
3.4.5.2 Legal and institutional framework
3.4.5.2.2 Industrial property
3.4.5.2.2.1 Main bodies
Page 109, paragraph 3.268
7. Australia is supportive of the collaborative examination arrangements for patents
within PROSUR and sees this as a valuable initiative that complements the wider global
efforts in this area. Australia has been actively involved in the development of the WIPO
CASE work-sharing platform with Canada, the United Kingdom and WIPO. What is
Brazil's future vision for PROSUR's work-sharing arrangement? Specifically, how does
Brazil believe PROSUR's work-sharing arrangement can complement WIPO CASE?
Members of PROSUR are developing a work-sharing platform specially adapted for the
technological needs and languages of the participating Offices. The integration of this platform with
WIPO CASE may be evaluated in the future.
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4 Trade Policies By Sector
4.2 Agriculture, Forestry, And Fisheries
4.2.2 Border measures
Page 120, paragraph 4.14
8. Australia notes that Brazil's average tariff for agricultural products (using the WTO
definition of agriculture) was 10.1%. Does Brazil have plans to further liberalise its
agricultural sector? Does Brazil have a plan to reduce/eliminate its tariff on wheat to
help reduce domestic prices? With respect to wine, can Brazil please advise its policy
reasons for imposing a tariff of 20% on bottled wine from countries outside the
MERCOSUR region and Chile?
Brazil considers that its current tariff regime is adequate and is not envisaging any further reform
except as a result of the DDA negotiations. Regarding wheat, despite being a sensitive sector in
the country, Brazil has recently opened from March to July 2013, a duty free TRQ for
2,000,000 MT of wheat.
4.2.3 Domestic support measures
4.2.3. General features
Page 121, paragraph 4.17
9. Australia notes that Brazil's in-kind food aid to all destinations has increased.
What are the reasons for this increase and, in particular, is this food aid from
government stockpiles?
In 2006, the establishment of the Interministerial Working Group on International Humanitarian
Assistance (GTI-AHI), by Presidential Decree, reinforced the Brazilian commitment to deliver
international humanitarian assistance. From that point of time onwards, the number and
complexity of the actions of international humanitarian assistance has substantially increased as
well as the Brazilian ability to react to humanitarian emergency situations. The products object of
food aid have come either from government stockpiles or acquisitions for international
humanitarian purposes.
10. Australia recognises that the NF:1 notification does not currently apply to Brazil in
accordance with Article 16.1 of the Agreement on Agriculture. However, in the name of
transparency, would Brazil consider participating in this notification process?
Although participating in the notification process is a possibility, Brazil considers that the quantities
currently provided are not sufficient to cause negative effects on LDCs or NFIDCs.
11. Can Brazil provide advice on the domestic arrangements it has in place to ensure
that in-kind food aid does not circumvent export subsidy commitments, is not tied
directly or indirectly to its commercial exports and does not negatively impact on
economic activity and agricultural development in recipient countries?
Currently, the Brazilian Government only provides food aid through the World Food Programme
(WFP) of the United Nations. Furthermore, Brazil focuses on Emergency Operations and Protracted
Relief and Recovery Operations, targeting victims of socio-natural disasters and vulnerable groups
to guarantee their food and nutritional security. In this respect, Brazil follows the guidelines of the
United Nations Office for the Coordination of Humanitarian Affairs (OCHA).
Page 122, paragraph 4.21
12. Australia notes that Brazil maintains several domestic support measures, including
preferential credit lines and price support mechanisms (e.g. minimum price guarantees
for a wide range of commodities such as corn, rice, cotton, and wheat). Brazil also
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maintains a policy of mandatory bank reserve requirements to be used to finance
agricultural activities with the rate of mandatory resources increasing from 25% to 34%
of demand deposits over the past four years. Support measures for family farmers
similarly include preferential credit lines, rural extension, preferential rules in public
procurement, rural insurance, and price guarantees.
The OECD assesses that Brazil's total support to agriculture and its Producer Support
Equivalent (PSE) are below the OECD average. However, about two thirds of Brazil's PSE
is provided in "the most production and trade distorting forms" (e.g. price support
measures and subsidized credit). As a major producer and exporter of agricultural
products, Brazil's production and trade support mechanisms can have both a distortive
and negative impact on global trade.
Is Brazil proposing to reduce some of the above-listed support measures and undertake
the reforms necessary to further liberalise its agriculture sector and allow market
pressures to more fully determine the nature of its agricultural trade?
At present, Brazil considers that its agricultural regime is open and provides limited level of
protection. Therefore, there is no intention to reform substantially the Brazilian agricultural policy,
except as a result of the DDA negotiations. Nevertheless, Brazil has been moving its policies
further towards the adoption of less distortive measures, as the Brazilian figures regarding green
box measures clearly show.
It should be stressed, however, that Brazilian support to agriculture is much lower than the
average of OECD countries, despite a much greater necessity of help of its micro, small and
medium producers, given their stage of development in comparison to most OECD countries. The
issue of what kind of support is most or least trade distortive should be discussed openly by all
WTO Member, not only in the OECD. In order to reach a fair conclusion, data from Brazil should be
compared with similar data from OECD countries.
4 Trade Policies By Sector
4.5 Services
4.5.3 Air transport and airports
4.5.3.2 Regulatory framework
4.5.3.2.2 Airports and auxiliary services
Page 163, paragraphs 4.213-4.220
13. Australia welcomes the steps the Brazilian Government is taking to improve data
collection on services trade through the recording of transactions in SISCOSERV. Could
Brazil provide any information on preliminary trends in services trade emerging from
this data collection? Are there any plans for this information to be made available to the
public in the future?
The obligation to register transactions into SISCOSERV is being gradually implemented,
following a schedule based on the NBS (the Brazilian Nomenclature of Services and
Intangibles, akin to the CPC/UN), and shall encompass all types of service provisions by
October 2013. By the end of the year, the system's data reports will provide an accurate
snapshot of the country's commercial trends in services, in order to obtain reliable trade
statistics, to fine-tune public policies for competitiveness. The aim of the System is also to
provide helpful assessments of the market conditions for entrepreneurs, the private sector
and for the general public.
The Ministry of Development, Industry and Foreign Trade also publishes annually the
"Overview of International Trade on Services". This publication is currently organized with
data from the Brazilian Balance of Trade in Services, with support by the Central Bank of
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Brazil. From 2014 on, the publication will be enriched with trade data extracted from
Siscoserv.
WT/TPR/G/283
2 General Economic Environment
2.2 General Legal And Regulatory Framework
2.2.2 Financial system
Page 8, paragraph 2.20
14. Australia notes the steps Brazil has taken to increase the access of low-income
populations to financial services. Could Brazil provide any further information on the
public and private actors involved in these initiatives, including the role (if any) of
foreign financial service providers?
4 Trade Institutional And Regulatory Framework
4.2 Sectoral Issues
4.2.3 Services
In 2009, the Banco Central do Brasil (BCB) formulated the Financial Inclusion project, the
objective of which is to rethink, together with those already involved, the model of financial
inclusion in the country, with the aim of providing the Brazilian population with access to financial
services that are adequate to its needs. In November of 2011 the National Partnership for Financial
Inclusion (PNIF) was created. This partnership aims to promote effective financial inclusion in
Brazil, by addressing these new challenges in a manner consistent with the G20 Principles for
Innovative Financial Inclusion. This partnership is a network of public and private actors engaged
in coordinated efforts to promote appropriate financial inclusion in Brazil , including (i) the Ministry
of Finance (MF); (ii) the Federal Public Prosecutor's Office (MPF); (iii) the Consumer Protection
Department (DPDC) of the Ministry of Justice (MJ); (iv) the Consumer Protection Commission of
the Chamber of Deputies; (v) the Ministry of Social Development (MDS); (vi) the Ministry of
Agricultural Development (MDA); (vii) the Ministry of Labor and Employment (MTE); (viii) trade
associations, such as the Organization of Brazilian Cooperatives (OCB), the Brazilian Federation of
Banks (Febraban), the Brazilian Association of Banks (ABBC), the Brazilian Association of Credit
Societies for Micro-entrepreneurs and Small Enterprises (ABSCM), the Brazilian Association of
Microcredit Entities (ABCRED), the Brazilian Association of Development Financial Institutions
(ABDE); (ix) the Brazilian Service of Support for Micro and Small Enterprises (Sebrae); and (x) the
Permanent Forum for Micro and Small Enterprises. Support was also provided by the academic
community, by other national entities, including the President's Secretariat for Strategic Affairs
(SAE-PR) and the Brazilian Institute of Geography and Statistics (IBGE), and by international
organisations, including the Alliance for Financial Inclusion (AFI), the Consultative Group to Assist
the Poor (CGAP) and the Bill & Melinda Gates Foundation. The efforts to increase and improve
access to financial services in the country, have resulted in the identification of new challenges
that must be addressed in order to move forward with financial inclusion and guarantee the quality
of financial services provision. These new challenges include: (i) adapting financial offerings to the
needs of businesses and individuals; (ii) improving the financial literacy of Brazilians as a means of
preventing over-indebtedness; (iii) encouraging household saving; (iv) strengthening consumer
protection mechanisms for financial service users; (v) promoting the sustainable development of
microcredit for income generating activities; (vi) guaranteeing the stability and ongoing
improvement of the country's correspondent banking model; and (vii) improving measurement
and data on financial inclusion to assess the situation in Brazil.
The details of the initiatives related to financial inclusion can be seen in the following text:
Initially it was the topic of microfinance that gained importance in the Central Bank of Brazil
(BCB). Between 2002 and 2008 we conducted nine seminars, with the objective of spreading the
importance of the theme and calling the attention of public and private sectors to the subject. With
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that, we aimed in bringing together the main national stakeholders with a relevant role in the
design of new strategies for the field of microfinance.
In 2009 the Central Bank started to discuss microfinance on another level, focusing on the
diagnosis of obstacles and challenges (strengths and weaknesses) of the microfinance sector in
Brazil, and building joint solutions (through a network of stakeholders). In this new context, we
put efforts in the promotion of effective access and usage of financial services by the public, both
individuals and small business. Since then, we have held four Forums on Financial Inclusion. Thus,
the promotion of financial inclusion of the population has grown to become one of BCB's strategic
objectives, contributing to the efficiency of the financial system. During this period, several
improvements were made in the regulation. Among the most recent, we highlight the creation of
new types of credit cooperatives: the ones with free admission, micro-entrepreneurs of varied
business lines, and businessmen linked to a trade union or employer.
In 2010 the BCB launched the 1st Report on Financial Inclusion, covering aspects of Brazil's
macroeconomics, the composition of the formal financial system, statistics regarding points of
access to financial services, usage (credit and deposit/savings accounts), and finally the challenges
for financial inclusion in Brazil. (The report is available online at
http://www.bcb.gov.br/?ENGLISH). One of the interesting findings of this first report was that
banking correspondents were the most popular channel for the payment of bills and taxes, and
also for bank transfers.
In 2011 we proceeded with a review of the report, launching the 2nd Report on Financial Inclusion,
trying to focus on the developments from the population's perspective, for example, finding the
number of people who actually uses credit in Brazil. The report presented also some data on
quality, like the average interest rates paid by companies, as well as the evolution in the last
decade in terms of geographic coverage of access channels. Finally, the report launched a first
version of the Financial Inclusion Index, comprised of access and usage indicators.
In November 2011 the BCB launched the National Partnership for Financial Inclusion (PNIF), a
network of public and private actors engaged in coordinated actions for the promotion of adequate
financial inclusion of the Brazilian population. The PNIF is focused on three objectives: to expand
and improve the population's access to financial services, to promote financial responsibility and
access to information about financial services through financial education and increasing
transparency, and to act so that the supply of financial services is more appropriate to the needs
of the economy and the population.
After the objectives of the partnership were defined, the actions needed to achieve them were
identified, culminating in the Action Plan for Strengthening the Institutional Environment, which
deals with three priority lines: diagnosis, regulation, and education and transparency. Based on
the objectives of the PNIF and these three priority lines, eight specific actions were established.
The eight actions to be implemented between 2012 and 2014 are as follows:
1. Improve the regulatory framework of microcredit and institutions specialized in
microfinance, for adequate support to micro-entrepreneurs, as well as to micro and
small enterprises (action in progress).
Coordinating entities: BCB, Ministry of Finance (MF), and Ministry of Justice (MJ).
Purpose: To contribute to the expansion of productive microcredit in Brazil and to
strengthen the role of specialized microfinance institutions in the financial inclusion of
entrepreneurs, micro and small enterprises.
Current Stage: two resolutions already launched: – Resolution 4152/2012, which
defines the specific methodology featuring a microcredit operation, distinguishing it
from other lines of credit to low-income customers, and Resolution 4153/2012, which
enhances the targeting rules for micro-entrepreneurs and low-income customers.
2. Encourage the diversification and improvement of financial services, making them
more suitable to the needs of the population.
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Coordinating entities: BCB, MF, National Superintendence of Pension Funds (Previc),
and Superintendence of Private Insurance (Susep).
Purpose: To assist the Brazilian population, in particular the low-income portion, to
achieve increased access to financial services, appropriate to their needs, including
savings instruments, insurance and pensions.
3. Define legal and regulatory framework for mobile payments (action in progress).
Coordinating entities: BCB and Ministry of Communications (MC).
Purpose: To enable the provision of payment services via mobile phones and other
devices connected to the mobile network, in an environment of competition among
providers, and to ensure consumer confidence and efficiency in service delivery.
Current Stage: developed in conjunction with MC and the Brazilian Agency of
Telecommunications (Anatel), a draft of a new law providing on payment
arrangements and payment institutions, members of the Brazilian Payment System
(SPB), with the aim of promoting the financial inclusion of the population currently
without access to bank accounts.
4. Strengthen the network of channels serving the population (action in progress).
Coordinating entities: BCB, MF.
Purpose: Troubleshoot barriers to a balanced dissemination of access channels to
financial services, boosting the capacity of the financial system.
Current Stage: Already launched the Resolution 4072/2012, which simplifies and
eases the installation of points of access, allowing the offering of services more suited
to the needs of the local public.
5. Contribute to the promotion of financial education.
Coordinating entities: BCB, Previc, Securities and Exchange Commission of Brazil
(CVM), Susep, MJ, Ministry of Social Development (MDS), and the Brazilian Service of
Support for Micro and Small Enterprises (Sebrae).
Purpose: In line with the National Strategy for Financial Education (ENEF), to improve
people's decision-making in their relationship with financial institutions.
6. Intensify the dissemination of financial consumer rights and conflict-solving
alternatives (action in progress).
Coordinating entities: BCB, Previc, CVM, Susep, Federal Prosecutor (MPF), MJ.
Purpose: Facilitate financial consumers' knowledge of their rights and the procedures
for solving conflicts, increasing safety for the use of financial services.
Current Stage: publishing newsletters (Consumption and Finance) in partnership with
the MJ's National Consumer Secretariat (Senacon). Creation, by the BCB, of a specific
area of Institutional Relations and Citizenship (Direc). Negotiating the definition of an
action plan to be performed in the years 2013/14, under the Cooperation Agreement
with Senacon. Performing surveys regarding the over-indebtedness of the population.
7. Improve the methodology used in the study of financial inclusion and incorporate
quality indicators (action in progress).
Coordinating entities: BCB, Previc, Susep.