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5th WTO Trade Policy Review of Brazil (March 9th and 11th, 2009)
Statement by the Republic of Korea
Thank you, Mr. Chairman.
(Before giving my statement, I would like to congratulate you on your new responsibility as the Chairmanship of the TPRB. I have full confidence that under your leadership, the TPRB will successfully undertake and fulfill the expectations of the Membership, in particular the Monitoring exercise which has garnered greater importance with the deepening of the global economic crisis.)
(1) Introductory Remarks
Mr. Chairman, I would like to join others to extend a warm welcome to the delegation of Brazil for their fifth trade policy review. My appreciation goes to Ambassador Acevedo for his comprehensive presentation, to Ambassador Noor for his insightful and thought provoking contribution as the discussant, and to the Secretariat for its usual detailed and comprehensive report.
(2) Bilateral Relations
Mr. Chairman, Brazil is an important member of the international trading community, and Korea and Brazil have forged a close relationship over the years. Bilateral trade has increased almost four-fold since 2003, and as of last year, reached a record-high of
$10 billion US dollars. Investment cooperation has also witnessed a ten-fold increase in the last three years reaching new heights. In light of these remarkable figures, I have every confidence that our important economic cooperation will continue to further develop well into the future.
(3) Fight against Protectionism
In my view, one of the areas in which the bilateral economic cooperation could further strengthen is in regards to the fight against protectionism. As strong supporters of international trade, Brazil and Korea are of the common view that the current rule- based multi-lateral trading system must be further strengthened, and any and all measures of a protectionist nature must be held at bay. Korea looks forward to cooperating with Brazil in monitoring protectionist measures that might adversely affect the international trading environment; either in the context of the Monitoring Exercise of the TPRB, or any other forum to which our two countries are part of.
In this regard, my delegation would like to take this opportunity to extend its high appreciations to Brazil for reversing an earlier decision to significantly expand its
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import licensing requirements. The swift and decisive intervention of President Lula showed the strong commitment of Brazil on this issue.
(4) Brazil’s Trade Policy and Practices
Mr. Chairman, let me now turn to Brazil’s trade policy and practices and make a few comments.
As I mentioned earlier, it is no secret that Brazil attaches great importance to the multilateral trading system and in this context, is an active and increasingly one of the more important participants in the current DDA negotiations. However, as Brazil acknowledges in its Government report, Mercosur is (and I quote) “at the center of its foreign policy, as a process that goes beyond its customs union disciplines and constitutes a privileged space for cooperation in all areas.” Although in the context of Mercosur, preferential trade agreements have been negotiated with non-Mercosur countries, it is Korea’s view that these agreements are generally of limited scope, covering only some portions of trade in goods. As such, my delegation would like to inquire whether Brazil and its Mercosur members will consider (in the near future) engaging in negotiations for the conclusion of an FTA that includes the entire spectrum of trade, that is, trade in goods, trade in services, government procurement, intellectual property, and e-commerce, among others.
In regards to government procurement, Korea notes that Brazil has taken steps to increase transparency in its government procurement regime. However it also notes that Brazil has yet to sign on to the GPA. In light of the new market access opportunities possible for highly competitive Brazilian suppliers, and the benefit that will accrue to domestic taxpayers in the form of reduced procurement costs, we would like to join others and recommend that Brazil consider signing on to the GPA at the earliest possible juncture.
(5) Korea’s Specific Concern (“Minimum Import Price”)
Mr. Chairman, in preparation for this TPR, my delegation submitted in advance a number of written questions ranging from 1) request for further clarification on its FDI policy and its foreign investor protection regime, 2) several trade facilitation related issues, 3) its tariff structure, 4) its government procurement policy, and 5) its policy to prohibit imports of used consumer goods, among others.
While we (appreciate/look forward to) Brazil’s response to these and other questions, taking this opportunity, I would like to point out one issue that is simultaneously of concern and interest to us. It concerns the apparent implementation of the “minimum import price” by the Brazilian customs authorities.
The Secretariat Report for the Brazil TPR of year 1996 (WT/TPR/S/21), for the year
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2000(WT/TPR/S/75), for the year 2004(WT/TPR/S/140), and for the current TPR (WT/TPR/S/212) all state that Brazil does not apply minimum import prices for customs valuation purposes. However, it has come to our attention that recently items such as ‘spandex yarn’ and ‘re-generated polyester staple fibers’ from my country were denied customs clearance for allegedly declaring a price which falls below a certain import price. In the case of ‘re-generated polyester staple fibers’, customs clearance was resumed following a price adjustment.
While these incidents could have been isolated incidents that do not reflect ordinary practices, it were sufficient to cause concerns with regards to the transparency and predictability of the customs clearance process of Brazil. These concerns were fuelled in part due to the fact that in the year 1999 this same issue was at the center of a dispute with another WTO Member, and for two full years (between 1999 and 2001) this same issue was repeatedly reviewed at the WTO Committee on Customs Valuation.
In light of the concerns that this case has raised in my capital, my delegation would appreciate a detailed explanation and/or any supporting material on this specific issue during the intervention on the second day of the TPR.
(6) Concluding Remarks Mr. Chairman,
I would like to conclude my remarks by expressing my appreciations to the Brazilian delegation for their efforts, and wish them every success in their fifth TPR.
Thank you.
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