EU RELEASES FIRST SUBMISSION IN TYRES DISPUTE, CIVIL SOCIETY WEIGHS IN

In the dispute over Brazil's import ban and other restrictions on the sale of retreaded tyres, the EU in its first submission -- dated 27 April but only made public after the first panel hearing on 5-7 July -- presented its arguments to counter Brazil's public health and environmental defence. Brazil's response to the EU's first submission had already been made public earlier in June (see Bridges Trade BioRes, 16 June 2006).

Meanwhile, Brazil's cause received strong backing from a number of environmental and human and animal rights groups that have submitted two 'amicus curiae' ('friends of the court') briefs.

EU refutes environment and health arguments

In its submission, the EU argued that Brazil's import restrictions on retreaded tyres constitute an illegal barrier to trade, as they are incompatible with the WTO prohibition against the use of most quantitative restrictions on imports, as well as the requirement that Member countries treat imports from trading partners no less favourably than domestically produced goods. Furthermore, the EU contested the exemption of other Mercosur countries (Argentina, Paraguay, Uruguay) from the restrictions, allowing them to sell retreaded tyres in Brazil (see BRIDGES Trade BioRes, 16 June 2006).

Brazil has accused the EU of dumping its tyres in the South American country. It argues that since retreaded tyres cannot be reprocessed for subsequent use, they have a shorter lifespan than new ones and therefore become waste more quickly.

In response, the EU argued that Brazil's association between the risks to public health and the environment and the importation of retreaded tyres was misplaced, suggesting that these risks were rather a result of mismanagement of end-of-life tyres, and that all tyres have the same externalities on the environment. It further emphasised the difference between used and retreaded tyres, underlined by the difference in tariff classifications.

Contesting Brazil's defence under Article XX of the General Agreement on Tariffs and Trade (GATT) -- which provides for exemptions to Members' trade obligations in specific situations --, the EU also argued that reasonable alternatives were available. In Brazil, legislation is already in place making it mandatory for domestic producers of new tyres and tyre importers to provide for safe disposal of waste tyres. Also, a disposal scheme which builds on voluntary discarding of used tyres has been implemented at the state level. This programme has been very successful in eliminating the waste tyre problem, the EU noted. The EU further contested the effect of the measures, arguing that they did not protect the environment since the rate of accumulation of waste tyres had not been reduced. They added that most new tyres in Brazil are not suitable for retreading after the first life cycle and therefore equally contribute to the number of waste tyres.

Additionally, the EU challenged the exemption of the Mercosur countries from the restrictions by suggesting that Brazil was applying the measures in an arbitrary and discriminatory manner by permitting the importation of retreaded tyres from the Mercosur countries. The EU argued that Brazil, by exempting certain but not all countries, was violating the principle of Most Favoured Nation, prohibiting the discrimination between trading partners.

Civil society speaks up for Brazil

The two amicus curiae briefs submitted to the WTO panel by civil society groups lay out a number of legal arguments claiming that the measures were indeed necessary, and therefore justifiable. One of the documents, submitted on 3 July, came from the Center for International Environmental Law and several Brazilian human rights and pollution control groups, including the Centre for Human Rights and the Environment (CEDHA). The other, dated 16 June, was sponsored by US-based animal rights organisation Humane Society International. Additionally, over 75 Brazilian and international organisations and networks released a statement on 5 July defending Brazil's measures and pointing out the serious risks attached to removing the measures. In case of a favourable ruling for the EU, the groups warn that Brazil would become "a large garbage dump for the developed world, as it will be obligated to accept the entry of other used commodities". They call on the EU to "assume its responsibilities and dedicate the appropriate resources and technologies towards the treatment and disposal of its waste products".

Whether the panel will take the briefs into consideration is uncertain. To date, WTO dispute authorities have maintained that they have the right to accept and consider amicus briefs, but no obligation to do so. Brazil is currently considering making the two briefs part of its submission in the case.

Meanwhile, Brazilian Environment Minister Marina Silva met with civil society representatives in Geneva on 7 July, following the first panel hearing. She suggested that an adverse ruling in the case could open the door for poor countries to become waste dumping spaces for rich ones. To avoid such a scenario, she said, the principle that waste should be managed in proximity to where it is used should be applied to retreaded tyres, even if they are not yet 'waste' per se.

The next hearing in the case is scheduled for early September.

Additional Resources

Background documents for the dispute, including Members' submissions and amicus curiae briefs.

ICTSD reporting.