EU Statement by Ambassador Marc Vanheukelen at the Trade Policy Review of Brazil, 17 July 2017
Chair,
Let me start highlighting that Brazil is an important strategic and economic partner of the European Union.
Brazil is the largest economy of Latin America and its trade with the EU accounts for €60.3 bn corresponding to one third (30.8%) of the EU's total trade with the region. The EU is Brazil's first trading partner, accounting for 19.6% of its total trade. As regards investments, the EU is the biggest foreign investor in Brazil. About 50% of foreign direct investment, flowing into many sectors of the Brazilian economy, comes from the EU. These figures show the strength and depth of our bilateral trade and investment relationship.
With reference to Brazil's economic policy, the EU acknowledges the efforts Brazil has made to cope with one of the most severe recession in its history, implementing necessary structural reforms and fiscal consolidation. We encourage Brazil to keep up its efforts, while pursuing the goal of social cohesion and further opening up of the economy.
Focusing on Brazil's trade policy, we would like express our support for the improvements recorded in the period under review. For example:
- The EU acknowledges Brazil having adopted recent measures in the field of intellectual property rights which could help alleviate the patent and trademark application backlog and simplify procedures for IPR contracts. We look forward to the implementation of these measures and for Brazil to take further steps in the area of IPR rules and enforcement.
- The EU also appreciates the measures taken to reduce the State intervention in the energy sector.
The EU welcomes Brazil’s strong support for the multilateral trading system and its interest in regional and bilateral negotiations.
At a multilateral level, I wish to convey the EU's appreciation for the constructive approach of Brazil in the WTO negotiations. We are happy to co-sponsor together with Brazil and other WTO Members a proposal on domestic support in agriculture, which will be circulated to the WTO Members today. The EU trusts Brazil will continue to be fully engaged in the multilateral trading system and to display leadership in the negotiations of substantial outcomes in the WTO and is particularly committed to continue working together with Brazil in the pursuit of a successful 11th WTO Ministerial Conference.
At a bi-regional level, the EU is fully committed to advancing the EU-MERCOSUR negotiations as a key priority. The EU welcomes the constructive and significant progress made during the last rounds of negotiations. Both sides are pursuing an ambitious, comprehensive and balanced agreement hopefully by the end of the year that will bring important economic benefits to both sides as well as sending a strong signal in favour of rules and value-based trade liberalisation.
Chair,
Despite the positive overall trading relationship we also have a series of concerns. Turning now to these, I would like to highlight some of them which are of particular interest to EU companies:
First of all, more efforts are needed as regards effective and unified application of the import and customs procedures. EU operators are concerned with the highly burdensome and costly import procedures that often require a disproportionally high quantity of documents.
Regarding sanitary and phytosanitary matters, the EU would like to highlight the fact that Brazil is requiring but not performing audits to exporting countries. This remains the EU's biggest concern in this problematic area.
In our written questions, we have also asked Brazil to explain the rationale of its non-automatic import licensing system, which covers at least 5,460 tariff lines, that is more than half of Brazil's entire tariff list. We would like to hear about the possible reform of the system and whether Brazil intends to further develop the Single Window Programme as a means to reduce the number of non-automatic licenses.
Tax discrimination is another area of concern for the EU. We would appreciate if Brazil could elaborate more on details of this tax reform plan, including its timeframe. In particular, we would be interested to know how the government will act to eliminate tax distortions between imports and domestic products.
Then, the EU would encourage Brazil to further open up its markets to foreign enterprises in particular in the area of financial and insurance services, and legal professions, as well as the need to improve the system of mutual recognition of professional qualifications and diplomas.
Lastly, the EU is eagerly awaiting the outcome of Brazil's deliberations on whether to accede to the Government Procurement Agreement – a move which we would highly welcome and support.
On behalf of the EU, I look forward to a constructive exchange of views during this review and I wish Brazil's delegation the utmost success during its Trade Policy Review.