WTO Urges Brazil To Reduce Tariffs

by Mike Godfrey, Tax-News.com, Washington

11 March 2009

The World Trade Organization has called on Brazil to lower tariffs on imports in its latest assessment of the country's trade regime and economy.

The WTO report notes that Brazil has made "positive achievements" since the last assessment in 2004, including the gradual modernization and streamlining of its trade regime and a strong record of economic growth. However, the report cautioned that Brazil needs to "press on with its efforts to give additional impetus to trade and investment," by lowering effective tariff protection, reducing the use of import prohibitions and providing greater predictability to the foreign investment and trade regime. These measures are all the more urgent given the challenges presented by the worsening global economic climate, the WTO warned.

"Taking additional steps to promote market competition and an efficient allocation of resources would help Brazil sustain economic growth and continue improving the living standards of its population," the WTO stated.

According to the report, the average tariff applied to imports was 11.5% in 2008, up from 10.4% in 2004. The average tariff on agricultural products was 10.1%, and on non-agricultural products 11.6%. In addition to tariffs, Brazilian imports are subject to four non-cumulative domestic taxes, and the application of two of these taxes was extended to imports in 2004.

Brazil also continues to be an "active user" of anti-dumping measures, the WTO report observes. As at October 2008, the country had 63 anti-dumping measures in force, affecting the exports of 23 trading partners. The average duration of these anti-dumping measures is six-and-a-half years. Brazil also prohibits imports of virtually all used consumer goods.

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