Nov 8, 1986

BRAZIL PROTESTS US MOVE OVER INFORMATICS

GENEVA, 6 (IFDA/CHAKRAVARTHI RAGHAVAN)— Brazil protested Thursday U.S. moves for unspecified unilateral actions against Brazilian imports in retaliation over the Brazilian informatics law.

The U.S. has been trying to pressure Brazil to relay its informatics law and enable U.S. enterprises to enter the Brazilian informactis market.

Last year, the U.S. started investigations against Brazil, under U.S. domestic laws and denying opportunities to U.S. enterprises, and in October this, year, the U.S. President made a determination against Brazil.

The U.S. is now apparently planning to withdraw tariff and other concessions to Brazilian imports into the U.S. in retaliation for the Brazilian policy, claiming that such a policy has impaired or nullified U.S. rights under the general agreement.

While the general agreement does envisage retaliation in the form of withdrawal or suspension of concessions by a Contracting Party to compensate itself for impairment of its rights by another Contracting Party, this can be done only after authorisation by the Contracting Parties (acting jointly) under dispute settlement procedures envisaged in article XXIII, including the prior adjudication of the dispute by a panel and recommendations.

The U.S. planned action now under section 301 of the U.S. Trade and Tariff law would thus be a violation of the GATT articles and procedures, even if its complaints against the Brazilian informatics law were well founded.

The U.S. has not notified the general agreement and the Contracting Parties (jointly), about its intended retaliation nor gives any details of what concessions to Brazil it proposes to withdraw.

However it is reported to have sent a communication to the GATT Director-General, "for the information" of Contracting Parties (individually).

In the communication the U.S. is reported to have said that it views of the Brazilian action, as one being taken under article XVIII of general. Agreement and intended to promote a particular industry or industries, and that this had substantially affected U.S. rights.

The U.S. is also reported to have said that the President Reagan in October had made a determination to this effect, and that, in the absence of satisfactory resolution of this matter, the U.S. would now suspend application to Brazil of concessions.

The general agreement uses the term "Contracting Parties", both to refer to them in their individual capacities, as well as in their collective joint capacity. The first is indicated by writing the words in lower case and the second by writing it in capital letters.

The U.S. communication, reportedly sent in only on November 5, when the Council was already in session uses the term only in lower case.

Article XVIII of GATT deals with governmental assistance to economic development, and contains also some special provisions favouring third world countries in their efforts to promote development and raise the standards of living of their peoples.

Raising the issue in the GATT Council Thursday evening the Brazilian delegate, Paulo Nogueira Batista, said Brazil would invoke GATT dispute settlement procedures in this matter, starting with a request to the U.S. for consultations under article XXII of GATT.

"The communication of the United States", Batista told the GATT Council, "does not provide the necessary information on its alleged legal basis as well as on the precise nature of measures under consideration for adoption by the Unites States".

"It is also unclear whether the measures will be enforced without, prior notification to the GATT and previous appropriate consideration of the matter by the Contracting Parties (in their joint capacity)" Batista pointed out.

Further clarifications would be needed from the U.S. to enable an adequate assessment of the implications of the U.S. communications, Batista declared.

Brazil also recalled in this connection its own communication to GATT in September 1985 over the U.S. moves to investigate Brazilian informatics law and practices, and said: "the Brazilian delegation would like to reaffirm that the Brazilian government cannot accept the claim of the U.S. government to have a right to resort to unilateral actions, based on domestic legislation, as publicly announced by high U.S. Trade Officials, without due regard to GATT rules and to specific obligations assumed by the us under such rules, nullifying or impairing benefits accruing to Brazil".

In order to deal with "this serious threat of injury", to the rights and interests of brazil by the announced intentions of the U.S., "the Brazilian government, reserving all its rights under the GATT, intends to invoke GATT dispute settlement procedures, starting with a request for consultations under the relevant provisions of the general agreement".