WTO: Brazil Retread Import Ban ‘Inconsistent’ With Trade Rule

In a 241-page decision, the WTO investigative panel ruled that, while Brazil could restrict trade in certain goods on environmental and medical grounds, this does not apply to European retreads and cannot be used to aid trade discrimination or protectionism. The Associated Press quoted Stephen Adams, a trade official for the European Commission, as saying the European Union is “strongly in favour of environmental and public health protection, but Brazil’s measures do not serve those objectives.” The dispute dates back to 2005, when Brussels filed its complaint against at the WTO, suggesting the 27-member EU was trying to dump millions of used tyres on its market, increasing the risk of tropical diseases and creating environmental havoc as Brazil would essentially be storing European waste.

Brazil had argued that since retreaded tyres have a shorter life-span than new ones, they are more strongly linked to the adverse environmental and health effects caused by all waste tyres. The panel agreed with the EU that Brazil’s policies violated prohibitions on most types of quantitative import restrictions and failed to meet the country’s national treatment and non-discrimination obligations. In a preliminary ruling the panel also rejected Brazil’s argument that it lacked sufficient capacity to safely dispose of used tyres. Brazilian Environment Minister Marina Silva argued that there was a difference in disposing of 100,000 tyres from Uruguay and 80 million tyres from the EU. Brazilian newspaper O Globo reported that while used tyres can be imported for as little as $0.20, they fetch as much as $70 once retreaded. The EU said its exports have suffered since Brazil adopted the import ban. In 2001, EU exports totalled more than 7,800 metric tonnes, or more than 95 per cent of the retreaded tyres Brazil imported (roughly 25 per cent of the total market). By 2004 EU exports had fallen to 373 tonnes, just over 16 per cent of the total.