RESTRICTED
WORLD TRADE G/STR/Q1/BRA/4
11December 1997
ORGANIZATION(97-5417)
Original: English Working Party on
State Trading Enterprises
STATE TRADING
Replies toQuestions Posed byNEW ZEALAND1and
theUNITED STATES2Concerning theArticle XVII
Notification ofBRAZIL3
Thefollowing communication, dated 4December 1997, hasbeenreceived fromthePermanent
Mission ofBrazil.
_______________
Question from NewZealand
Brazil 'sTPRM Report ofSeptember 1992 indicated thatCONAB isresponsible for
guaranteeing minimum prices foragricultural products, andmanaging regulatory andstrategic
stocks. Given thatsuchoperations could haveanimpact onthelevelofimports ofsuchproducts,
wewould welcome clarification ofthereasons whyBrazil hasstated that"CONAB doesnotact
inimports orexports".
Question 1from theUnited States
WenotethatCompanhia Nacional deAbastecimento (CONAB) "does notactinimports
orexports. Itmaycarry onimports, under exceptional circumstances, bydecision oftheMinistry
ofAgriculture".
Could Brazil explain under what circumstances CONAB would engage intrade, andthe
general framework ofitstrading operations inthose circumstances?
Answer
Theactivities carried outbyCONAB arelimited tothemanagement ofregulatory andstrategic
stocks forpurposes offoodsecurity andsupply tothedomestic market. Itoperates through auctions,
bothforbuying andforselling products. Theorigin ofproducts isnottaken intoaccount incases
1G/STR/Q1/BRA/2
2G/STR/Q1/BRA/3
3G/STR/N/1/BRA
./.G/STR/Q1/BRA/4
Page2
ofpurchase. Thepurchase willbemade fromthebidder which offers thelowest price foritsproduct,
which canbeeither imported ordomestic.
CONAB doesnotimport norexport products. Thepossibility ofagovernment togovernment
transaction isprovided inlegislation but,sincethetradeliberalization process thatbegan inthe1990's,
CONAB hasonlyacted through auctions.
Question 2from theUnited States
WenotethatPetrobras "operates inimports andexports anditsactivities aredetermined
bythenecessities oftheBrazilian market".
Could Brazil explain thecriteria usedbyPetrobras toengage inimportation orexportation,
andthemechanisms itusestoconduct trade?
Answer
TheactivitiesofPETROBRÁSaredefinedinthejuridicalframeworkofthemonopolyestablished
inArticle 177oftheFederal Constitution. Until recently, asaresult oftheoperation ofArticle 177,
PETROBR ÁShadamonopoly intheactivities related toimports andexports ofpetroleum andits
derivatives.
Asaresult ofchanges intheConstitution, themonopoly isstillretained bytheGovernment,
butnotnecessarily withPETROBR ÁS,fortheGovernment cancontract other enterprises. Forthe
timebeing, since theconstitutional changes havenotyetbeenregulated, PETROBR ÁSremains the
soleenterprise authorized tooperate imports andexports ofpetroleum anditsderivatives. Itshould
bestressed thatthese operations have tobebased onmechanisms andcriteria ofanexclusively
commercial nature.