On November 6, 2009, the Government of Brazil concluded nearly seven years of litigation before the World Trade Organization (WTO) concerning cotton subsidies by announcing retaliation against the United States. A resolution, issued by the Brazilian Foreign Trade Chamber (CAMEX or A Câmara de Comércio Exterior),1 includes a preliminary list of imported goods from the United States that are being targeted for up to 100% in additional tariffs.2 Brazil’s retaliatory move follows an August 31, 2009 WTO arbitration panel decision authorizing Brazil to adopt retaliatory trade measures against U.S. imports, and upholding a previous WTO panel finding that the United States failed to comply with the WTO ruling in the dispute settlement case brought by Brazil (WT/DS267).3

In its November 6, 2009 announcement, CAMEX states that the intended retaliatory duties will be applied on top of current duty rates applicable to U.S.-originating products, notwithstanding the possibility of later adopting other measures or the inclusion of additional tariff items. CAMEX is inviting interested Brazilian entities to submit comments on the preliminary list by November 30, 2009. Submission of comments is subject to specific instructions established in the announcement.

The Preliminary Retaliation List is Broad

The draft retaliation list covers a broad range of imported U.S. products including specific agricultural articles, foods, beverages, wood and wood products, chemicals, steel products, pharmaceuticals, consumer products, medical devices, automobiles, digital cameras, sports equipment and others.

Food products covered by the proposed retaliation list include certain articles or types of:

  • Fish
  • milk powders
  • walnuts and hazelnuts
  • raisins
  • pears, cherries and plums
  • wheat and soybean oils
  • vegetable fats
  • lactose syrup/other sugar syrups
  • prepared potatoes
  • certain mixed juices and flavored waters
  • certain protein concentrates and food supplements
  • sugar-free chewing gum

Other articles included in the target list are certain:

  • Acyclic alcohols
  • Toilet waters
  • Beauty and make-up preparations
  • Shampoos
  • Dentifrices and toothbrushes
  • Shaving products
  • Personal deodorants
  • Chemical preparations for photographic uses
  • Polymers
  • Packing materials
  • Tires
  • Cotton yarns, textiles and apparel
  •  Glass fibers
  • Articles of jewelry
  • Certain flat-rolled iron and nonalloy steel products
  • Razors and razor blades
  • Alkaline cells
  • Cookers and grillers
  • Medicines and medical devices and apparatus
  • Certain wood pulp and paper products
  • Passenger cars and outboard motors
  • Consumer products, including portable phones for cellular networks, loudspeakers and digital cameras
  • Wrist watches
  • Plastic furniture
  • Sports articles and equipment
  • Paintings, drawings and pastels

The preceding list is intended to provide only a general description of the broader categories of articles that are targeted. A complete copy of the official target list (in Portuguese) and an unofficial English language guide to the targeted products prepared by Hogan & Hartson providing additional descriptive detail can be accessed by clicking here. Companies are strongly advised to consult the official list and legal counsel to confirm whether specific articles are included.

Opportunity for Comments and Opposition by Brazilian Entities

Comments in opposition to the proposed measures are being accepted by CAMEX through Monday, November 30, 2009. However, only Brazilian entities are currently eligible to submit comments. U.S. exporters of potentially affected products are therefore strongly advised to identify Brazilian customers or subsidiaries with an interest in the proposed measures to encourage them to submit appropriate comments.