RESTRICTED
WORLD TRADE G/SCM/Q2/BRA/7
16April 1997
ORGANIZATION(97-1642)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Questions from JAPAN Regarding the
Updating Notification ofBRAZIL1
Thefollowing communication, dated 11April 1997, hasbeenreceived from thePermanent
Mission ofJapan.
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Fiscal Incentives forRegional Development
LastDecember, theGovernment ofBrazil introduced thenewpolicy regarding automobiles.
Concerning thenewpolicy, Japan would liketoknow howthenewpolicy could bejustified
under theWTO Agreements.
(i) Thespecial preferential measure under thenewpolicy isdeemed tobeanexport
subsidy; since itissubject toacertain ratioofexports andimports.
Inthisregard, could Brazil explain whysuchanexport subsidy could beintroduced
inconsistency withtheWTO Agreements?
(ii) Thespecial preferential measure under thenewpolicy isdeemed tobeasubsidy
contingent upontheuseofdomestic overimported goods, sinceitissubject toacertain
ratioofdomestic production.
Inthisregard, could Brazil explain whysuch asubsidy could beintroduced in
consistency withtheWTO Agreements?
(iii) Could Brazil explain howthespecial preferential measure affects theprices of
automobiles which aresoldbytheautomobile companies which areexpected tobenefit
from themeasure?
(iv) Thepreferential measure isdeemed tobeinconsistent notonly with theSCM
Agreement, butalsowithArticles 3.2and3oftheGATT andArticle 2oftheTRIMs
Agreement.
Could Brazil clarify itsviewconcerning thismatter?
1G/SCM/N/16/BRA.