Thursday, March 28, 2024

Dispute between the EU and Brazil over Retreaded Tyres: Enviromental Problem, Regionalism and Developing Countries in the WTO - AFTA Related Issues

The case started when Brazil decided, on 25 September 2000 to levy a ban on the import of retreaded tyres from other countries except those in the Mercosur. Brazil claimed that the measure would limit the effect of discarded tyres on the environment while the EC was of the view that the ban violated Article XI.1 GATT on quantitative restriction on import and Article XIII GATT on most favoured nation treatment. WTO Appellate Body ruled, on 3 December 2007, that the measure was necessary in conformity with paragraph b, but did not satisfy the condition set out in the introduction to Article XX. The Body went some way to environmental friendliness without resolving how to apply the Enabling Clause. The Body also ruled that Brazil’s decision not to impose a ban MERCOSUR members cannot be considered irrational as it was already decided by the Mercosur Arbitration.

 

The case drew a great deal of attention as a measure to protect the environment by a developing country was the centre of a court case filed by a developed country, the WTO’s ruling was more environment-friendly and possible conflict existed as to the WTO Dispute Settlement Mechanism and regional arbitration.

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