WTO Rules Brazil Must Allow Retread Imports

A World Trade Organization appeals panel ruled on December 3 that Brazil did violate international commerce rules by restricting importation of retreaded tyres from Europe. Brazil claimed that the European Union was dumping millions of used tyres on its market, creating a greater risk of disease and environmental damage as the country had no means to effectively recycle the used tyres. Because Brazil allows such imports from South American countries, the WTO ruled that Brazil’s ban on the retreaded tyres was, in fact, as restriction on international trade.

The EU demonstrated that in 2001, a year before Brazil adopted the ban, Europe exported more than 7,800 tonnes of retreads to Brazil, some 95 per cent of all retreaded tyres Brazil imported. By 2004, those exports dropped to 373 tonnes, or 16 per cent of Brazil’s total. However, Brazil complained that such retreads from Europe arrive after having undergone multiple retreadings, and cannot be viably retreaded again. This creates additional tyre waste the country is ill prepared to deal with.

The 115 page WTO report into the findings of its Appellgate Body details the court’s conclusions and its request that Brazil now adhere to the rules of the General Agreement on Tariffs and Trade (GATT). Brazil’s retreading market, one in which 8.5 million tyres are retreaded annually, is the world’s second largest.