A World Trade Organization (WTO) Appellate Body has upheld the WTO panel decision that Brazil’s restrictions on imported retreaded tires from the EU violate the General Agreement on Tariffs and Trade of 1994 (the GATT). In June 2005 the EU brought a complaint in the WTO challenging Brazil’s ban on importation of retreaded tires and fines imposed on the marketing, transportation and storage of retreaded tires. The EU also challenged an exemption to the ban on such imports which Brazil extended to certain South American countries. In response, Brazil argued before the WTO panel that it had a right to impose a ban on imports when “necessary to protect human, animal or plant life.” In this case, Brazil asserted, such a ban was required because used tires have short lifespans and quickly become nonrecyclable waste. Moreover, discarded tires can hold stagnant water and become dangerous breeding grounds for diseasecarrying mosquitoes.
The WTO panel issued its decision in June 2007 confirming Brazil’s right to restrict imports that threaten its population and the environment. It further concluded, however, that by permitting imports from its Latin American neighbors, Brazil’s import ban became “a disguised restriction on international trade.” Affirming, the WTO Appellate Body also recognized the right to restrict imports on medical or environmental grounds, but held that Brazil’s exemption for certain Latin American countries constituted arbitrary and unjustifiable trade discrimination.