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Joint Press Release with Ministry of Foreign Affairs A Panel Under the WTO Agreement was Established Regarding Brazil’s Measures Concerning Discriminatory Taxation and Charges

The Government of Japan requested that the World Trade Organization (WTO) establish a panel under the WTO Agreement on certain measures concerning discriminatory taxation and other charges for the automotive sector, information and communication technology, etc. introduced by Brazil. On September 28, 2015 (Geneva time), the panel was established.

1. Overview

On September 17, 2015, the Government of Japan requested that the WTO establish a panel under the WTO Agreement on certain measures concerning discriminatory taxation and charges that Brazil had introduced. On September 28, 2015 (the same day, local time in Geneva), the panel was established.

The issue in this case is whether certain tax advantages granted for companies that carry out certain production and investment activities in Brazil and/or use local content (local products) are consistent with the WTO Agreement.

2.Future schedule

Japan will seek an appropriate solution to this issue in accordance with the WTO Agreement.

Reference

1. The Background regarding the Case

  1. In September 2011, Brazil raised the rates for the country’s Industrial Product Tax (IPI), a value-added tax imposed on industrial products, by 30% with respect to automobiles. In October 2012, Brazil introduced tax advantages for companies in Brazil that carry out certain production and investment activities and/or use local content. Also, in the field of information and communications devices and related goods, Brazil has established tax advantages similar to those in the field of automobiles. In addition, Brazil has established tax advantages for exporting companies which are contingent on export performance.
  2. On July 2, 2015, Japan requested consultations with Brazil under the WTO Agreement. The consultations were held on September 15 and 16, 2015.
  3. As the consultations failed to settle the dispute, on September 17, 2015, Japan requested that the WTO establish a panel.

2. Panels (Subcommittees) in the WTO Dispute Settlement System

A WTO member which insists that its benefit under the WTO Agreement is being impaired as the results of measures which are inconsistent with the WTO Agreement adopted by other WTO members may request the establishment of a panel, which examines the matter and gives rulings regarding the consistency with the WTO Agreement, after the certain period, if consultations between the parties fail to settle the dispute. And, any party which is not satisfied with the panel rulings may appeal to the WTO Appellate Body, which corresponds to the final authority to adjudicate the matter..

Release date

September 28, 2015

Division in charge

For general information on WTO dispute settlements:
Multilateral Trade System Department & Office for WTO Compliance and Dispute Settlement, Trade Policy Bureau
For information on the economic relationship between Japan and Brazil:
Latin America and Caribbean Office, Trade Policy Bureau

Related Information

WTO

Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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