NEWS RELEASES
WTO GRANTS CANADA RIGHT TO IMPOSE SANCTIONS AGAINST BRAZIL OVER AIRCRAFT SUBSIDY DISPUTE
December 12, 2000 (10:45 a.m. EST) No. 269
WTO GRANTS CANADA RIGHT TO IMPOSE SANCTIONS AGAINST
BRAZIL OVER AIRCRAFT SUBSIDY DISPUTE
Canada today formally requested and was granted authority from the World Trade
Organization's (WTO) dispute settlement body to impose economic countermeasures
against Brazil for the continued use of its illegal Proex aircraft subsidy program,
announced International Trade Minister Pierre Pettigrew.
"We have been very clear about how Brazil must reform Proex to meet WTO
requirements," said the Minister. "In the absence of necessary changes to Proex, we
are ready to exercise our WTO rights and protect Canadian companies from illegal trade
practices abroad."
The last negotiating session between Canada and Brazil took place on November 28
and 29 in Rio de Janeiro. The main stumbling block during these meetings was Brazil's
newly amended Proex subsidy program, which is not compliant with Brazil's WTO
obligations. If Brazil were to make necessary reforms to Proex, the two countries would
likely be able to agree on compensation measures for past Proex violations and a
monitoring mechanism for any future aircraft subsidy programs.
A WTO arbitration panel ruled in August that Canada can apply up to $344 million per
year in countermeasures against Brazil, confirming the Proex subsidy program has
done significant damage to the Canadian aircraft industry. The award was the largest in
WTO history. Four previous WTO panels had also ruled that the Proex subsidy violated
Brazil's WTO obligations and must be withdrawn.
Canada has yet to decide on specific retaliatory measures to be imposed against Brazil.
No future talks with Brazil have been scheduled.
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For further information, media representatives may contact:
Sylvie Bussières
Office of the Minister for International Trade
(613) 992-7332
Media Relations Office
Department of Foreign Affairs and International Trade
(613) 995-1874
For more information on the Canada-Brazil Aircraft Subsidy Trade Dispute, please
consult
http://www.dfait-maeci.gc.ca/tna-nac/dispute-e.asp#Aircraft
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