Brazil opens a lawsuit in the WTO against tariffs imposed by Donald Trump

The Brazilian government formalized on Wednesday (6) the beginning of a process of dispute resolution against the United States in the WTO (World Trade Organization), due to the 50% rates imposed by Washington on Brazilian products since Donald Trump government. The first step was the request to open consultations with the US, the mechanism provided for by the WTO rules. From now on, the two countries have 60 days to try to reach a negotiated agreement. If there is no consensus, Brazil may request the installation of a panel – a kind of court within the organization.

In the request, Brazil claims that tariffs violate two central devices of the 1947 General Agreement on Tariffs and Commerce (GATT), which gave rise to the World Trade Organization. The first is the most favored nation clause, which forces countries to grant the same tariff benefits to all WTO members. The second deals with tariff concessions, which prohibit the unilateral increase in tariffs without negotiation with other affected countries.

The measure has strong symbolic value and was taken amid a Brazilian diplomatic effort in defense of the multilateral trade system. At the last meeting of the WTO General Council in July, Brazil received the support of 40 countries by criticizing the escalation of international rates. Despite the advancement of the process, a definitive solution may face obstacles. The final stage of the WTO controversy mechanism – the appeal agency – has been paralyzed since 2019, when the United States has blocked the appointment of new judges.

As a result, more than 20 panel decisions have run out of end, as the appeals presented “in the vacuum” cannot be tried. Still, the Brazilian government bets on the political visibility of the case and the possibility of gathering international support to press the US for a negotiated exit.

Posted by Felipe Dantas

*Report produced with the aid of AI