Brasília – Brazil’s federal government has issued a decree regulating the rules for applying safeguards for domestic producers. Bilateral safeguard measures may be applied when imports of a product subject to preferential conditions under a trade agreement increase in quantity and under such conditions that they cause or threaten to cause serious harm to the domestic industry.
The decree was signed by President Luiz Inácio Lula da Silva and published in a special edition of the Official Gazette on Wednesday (4), the same day the National Congress completed the internalization of the Mercosur–European Union trade agreement, which creates one of the largest free trade zones in the world. The regulation applies to agreements with all countries.
The measures may be adopted to protect both the industrial and agricultural sectors. According to the government, the adoption of a safeguard may, for example, lead to the temporary suspension of the negotiated tariff reduction schedule or to the reinstatement of the tariff applied before a trade agreement came into force.
A tariff quota may also be established, setting a volume of imports up to which goods continue to benefit from the agreed preferences. Once this limit is exceeded, the products become subject to the suspension of the tariff reduction schedule or the reinstatement of previously applied tariffs.
According to the decree, the foreign trade body CAMEX will be responsible for adopting safeguard measures following an investigation conducted by the Department of Trade Defense of the Foreign Trade Secretariat of the Ministry of Development, Industry, Trade and Services (DECOM/SECEX). The domestic industry may request investigations into bilateral safeguards, and in exceptional circumstances, SECEX is also authorized to open investigations on its own initiative.
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Translated by Guilherme Miranda
