EU Statement at the Trade Policy Review of Brazil, 23 November 2022

EU Statement delivered by Ambassador João Aguiar Machado

On behalf of the European Union, I am pleased to participate in the eighth trade policy review of Brazil. I would like to warmly welcome Minister Pimentel and his team to Geneva.

Brazil is a strategic partner of the European Union not just because its unique geographic and economic size on the South American continent, but also because it has consistently produced many of the world’s finest diplomats and trade negotiators. This reflects a deep commitment both to open trade and to multilateral institutions. It is no exaggeration to say that your government has played a key role in shaping the Organisation in which we are deliberating today.

Only last week we bade farewell to my friend and colleague Alexandre Parola, to whom we collectively owe a debt of gratitude, not just for the eloquence of his statements and interventions, but also for his determination and sense of purpose in calling on WTO Members to rediscover their common sense of purpose and to explore new ways of negotiating.

The EU is Brazil's second trading partner, and we are also the largest foreign investor in Brazil, with about 50% of total stock of foreign direct investment in your country. Therefore, we have a strong economic relationship and a large stake in your continued success.

As you are in transition to a new government after last month’s elections, we would like first of all to pay tribute to the current administration for the measures taken over the last years to facilitate trade and investment, to improve the business climate, to put in place new public procurement rules, and to further open the Brazilian economy to the world. There is always more work to do, but we would be remiss in not acknowledging these efforts.

Looking ahead, we welcome the opportunity to continue our engagement with the government of Brazil, and will be encouraging you as you pursue the goals of social cohesion, fiscal stability and a further opening of the economy. The EU will also encourage Brazil to address a number of environmental challenges, notably to reverse the current trend of rising deforestation, and to ensure that trade does not serve as a driver for such deforestation.

I would like to express our support for the improvements recorded in the period under review. One example are the recent measures in the field of IPR adopted in Brazil, which can be expected to reduce the current backlog of patent applications if the required resources are committed. We have also warmly welcomed the steps in the area of IPR enforcement.

At the multilateral level, I wish to convey the EU's appreciation for Brazil’s enduring support for a strong WTO, in which the Organisation is able to rediscover the art of conducting and concluding negotiations successfully.

At the regional level, the EU is fully committed to our agreement with MERCOSUR. We are hopeful that the conditions can be put in place to enable signature in coming months, and look forward to engagement with the current and incoming administrations to achieve this.  

Chair,

Notwithstanding the overall positive message I have just given, we also have some concerns and I would like to turning to these. I will single out only some, which are of particular interest to EU companies and Member States given the time constraints:

First of all, we want to encourage you to advance on the way to an effective and unified application of the import and customs procedures. European operators are frustrated by burdensome, costly and often redundant import procedures that require a disproportionately large quantity of documents. Cutting unnecessary red tape is a win-win, as it will reduce the expenses of government while at the same time making the economy more competitive.

We would like to emphasise the importance of sharing information on sanitary and phytosanitary matters and resuming our technical dialogue, which has unfortunately not taken place since 2018. This is regrettably long. Specifically we would encourage Brazil to speed up the approval of imports from the EU of products of animal and plant origin, the definitive pre-listing of establishments, and the audits to EU facilities. We also encourage Brazil to take the necessary steps to treat the EU as a single entity, as quickly and pragmatically as possible. These are our biggest concerns in this vital area.

For imported products generally, we look forward to Brazil’s full implementation of the Single Window Programme to facilitate trade. We believe this could lead to a reduction in the number of non-automatic licenses, and help to overcome some of the difficulties caused by Brazil’s unduly onerous import licensing system.

Tax discrimination is another area of concern. We would appreciate further information on Brazil’s current tax reform plan, including its timeframe. In particular, we would be interested in knowing how the government will address existing tax distortions between imported and domestic products that we believe are without justification.

In the field of services, we strongly encourage Brazil to further open up its markets to foreign enterprises, in particular in the financial and insurance sectors and the legal professions, and at the same time make progress in improving the system of mutual recognition of professional qualifications and diplomas. 

A week after the COP27 meeting and ahead of the COP on Biodiversity, we cannot fail to mention our shared aspirations in the field of the protection of biodiversity and the urgent fight against climate change. We have strongly welcomed the speech made at Sharm el Sheikh by your President-elect. Trade and investment have an important role to play. We encourage Brazil to continue to create an investment climate favourable to renewable energy and to take action to decouple agricultural production and trade from deforestation. We are ready to cooperate with you as you try to meet this challenge.

On behalf of the EU, I look forward to further exchanges of views during this Trade Policy Review, which I wish the utmost success. Thank you.