WORLD TRADE WT/DS52/1
G/L/99
G/SCM/D5/1
G/TRIMS/D/2
ORGANIZATION 14August 1996
(96-3220)
Original: English
BRAZIL -CERTAIN MEASURES AFFECTING TRADE AND INVESTMENT
INTHE AUTOMOTIVE SECTOR
Request forConsultations bytheUnited States
Thefollowing communication, dated 9August 1996, fromthePermanent Mission oftheUnited
States tothePermanent Mission ofBrazil andtheDispute Settlement Body, iscirculated inaccordance
withArticle 4.4oftheDSU.
_______________
MyauthoritieshaveinstructedmetorequestconsultationswiththeGovernmentofBrazilpursuant
toArticles 1and4oftheUnderstanding onRules andProcedures Governing theSettlement ofDisputes
(DSU), Article XXII:1 oftheGeneral Agreement onTariffs andTrade 1994("GATT 1994"), Article 8
oftheAgreement onTrade-Related Investment Measures (the"TRIMs Agreement"), andArticles 4.1,
7.1and30oftheAgreement onSubsidies andCountervailing Measures (the"Subsidies Agreement"),
regarding certain measures affecting trade andinvestment intheautomotive sector implemented by
Brazil beginning inDecember 1995under Provisional Measure No.1,235 andDecree 1,761, aswell
asmeasures which extend ormodify those measures. Themeasures inquestion provide, interalia,
forbenefits tomanufacturers ofmotor vehicles andparts, intheformofareduction induties ontheir
imports ofcertain products; suchbenefits areconditional oncompliance withaverage domestic content
requirement, trade-balancing andlocalcontent requirements withregard toinputs, andother criteria
which maybeimposed bytheMinistry ofTrade.
TheUnitedStatesconsidersthatthesemeasuresviolatetheobligationsofBrazilunderArticlesI:1
andIII:4oftheGATT 1994, Article 2oftheTRIMs Agreement, andArticles 3and27.4oftheSubsidies
Agreement. TheUnited States alsoconsiders thatthese measure nullify orimpair benefits accruing
totheUnited States directly orindirectly under Article IIofGATT 1994 within themeaning of
Article XXIII:1(b) ofGATT 1994. TheUnited States reserves theright toraiseadditional factual
claims andlegalmatters during thecourse oftheconsultations.
Welookforward toreceiving yourreply tothisrequest andtofixing amutually acceptable
dateforconsultations.