Brazil will take commercial retaliation against members of the World Trade Organization (WTO), even when the entire process has not been completed due to the ineffectiveness of the Appellate Body.

That determination was established in a decree signed by the Brazilian president, Jair Bolsonaro, published in the official newspaper of that nation this Thursday.

In particular, the decree empowers the Chamber of Foreign Trade (Camex) to suspend concessions or other obligations of the Country, in the following cases of breach of multilateral obligations by a WTO member:

I – When the Federative Republic of Brazil is authorized by the WTO Dispute Settlement Body to suspend the application of concessions or other obligations for said member provided for in the WTO agreements.

II – When the report of the WTO special group confirms, in whole or in part, the allegations presented by the Federative Republic of Brazil, as plaintiff, provided that:

• There is an appeal by the WTO member, as defendant, in accordance with the provisions of article 17 of the Understanding on Rules and Procedures for Dispute Settlement, contained in Annex 2 of the Final Act that incorporates the Results of the Uruguay Round of Multilateral Trade Negotiations GATT, promulgated by Decree No. 1,355, of December 30, 1994;
• The appeal cannot be considered by the Appellate Body or the Appellate Body report cannot be approved by the WTO Dispute Settlement Body.
• The period of sixty days has elapsed after the Federative Republic of Brazil has notified the respondent WTO Member of its intention to suspend concessions or other obligations.

WTO

A proposal presented by Mexico and supported by 121 WTO members calls for the restoration of the operation of the Appellate Body, the last instance to resolve trade disputes and which has been inoperative since December 11, 2019.

Trade dispute settlement is one of the core activities of the WTO. A dispute arises when a Member government considers that another Member government is in violation of a WTO agreement or commitment it has made.