Docstoc

The Trials of Winning at the WTO WhatLiesbehindBrazil'sSuccess

Document Sample
The Trials of Winning at the WTO WhatLiesbehindBrazil'sSuccess Powered By Docstoc
					                                      C n i bt l s dnt ut i otu o’ prvl
                                          t    e        e h    h s
             Working Draft: 2/14/2008 [a ce u p ae o’qo wt u at r apoa]

                               The Trials of Winning at the WTO:
                                                               1
                                  a Le eid rz’S ces
                                        s
                               Wh t i bhn B ais ucs   l

               by Gregory Shaffer, Michelle Ratton Sanchez and Barbara Rosenberg


                                         TABLE OF CONTENTS

INTRODUCTION

. R ZLS H N E N R D E E O ME T O IY T E A T E R
I B A I’ C A G I T A ED V L P N P LC : H G T Y A S
      . r l C ag i D vl m n P ly
       1 z’
     1 Bais hnen ee p et o c    o          i
     1.2 Brazil in GATT Dispute Settlement
      . r l O gn ao fr A T eo aos n Ds t el n
       3 z’            zi                   ii
     1 Bais rai t n o G T N gtt n ad i u Ste etp e tm

II. THE CHALLENGES POSED BY WTO DISPUTE SETTLEMENT: THE
    CATALYZING EFFECTS OF THE EMBRAER CASE
       2.1 The Challenges of WTO Dispute Settlement
       2.2 Brazil in WTO Dispute Settlement

I T E R ZLA P R A H N R C IE B A I’ A D I G
 I
I. H B A II NA P O C I P A TC : R ZLSH N LN OF WTO
  DISPUTE SETTLEMENT
     3.1 Brazil as Complainant
1
  [Note: we are still searching for a title. Also considering: International Law and Domestic Change:
    a Le ei Bais ucsi t
           s n           l                 e O
Wht i bh d rz’Scesn h WT . Comments welcome.

  Gregory Shaffer is Wing Tat-Lee Chair of International Law, Loyola University Chicago School of Law, and
James L. Krusemark Professor of Law, University of Minnesota Law School. At the time of primary field work for
this article, he was Professor of Law at the University of Wisconsin Law School, Director of the UW European
Union Center, Co-Director of the UW Center on World Affairs and the Global Economy; Michelle Ratton Sanchez
is Professor of Law at the Law School of Sao Paulo, Getúlio Vargas Foundation (DireitoGV) and researcher of the
Brazilian Center for Planning and Analysis (CEBRAP); Barbara Rosenberg is a lawyer in São Paulo and teaches at
DireitoGV. We would like to thank participants at workshops at Northwestern University, Loyola University School
of Law, and the annual meeting of the Law and Society Association in Baltimore (2006) and Berlin (2007), as well
as participants at two workshop-dialogues organized by the International Centre on Trade and Sustainable
Development in Sao Paulo, Brazil (spring 2006) and Mombassa, Kenya (December 2006). We would also like to
thank the following individuals for their comments: Karen Alter, Chad Bown, Kevin Davis, Christine Harrington,
Jide Nzelibe, Nancy Reichman, Ben Schneider (who was particularly helpful in his comments in light of his
expertise in Brazilian business politics and the state), and Vera Thorstensen. Finally, we would like to thank the
following institutions for their financial support: the University of Wisconsin (UW) Centre on World Affairs and the
Global Economy, the UW European Union Center, UW Law School, Loyola Law School, Direito GV, and the Law
and Society Association for a grant to the International Research Collaborative Transnational Transformations of the
State. We thank, in particular, the Brazilian Ministry of Foreign Affairs in Brazil and its mission in Geneva, which
were incredibly open and helpful in providing us with documents and information. Finally, we thank Matt Bills,
Matt Fortin, Kyle Shamberg and Anna Woodworth for their valuable research assistance. All errors of course are our
own.
                                               2

       3.2 Brazil as Defendant
       3.3 Brazil as Third Party

V WH T IS E I D R ZLS S F O IP T E T E N :
I . A LE B H N B A I’ U EO WT D S U ES T L ME T
   COORDINATION OF THE PUBLIC AND PRIVATE SECTORS
     4.1 Reorganizing Government to Respond to WTO Challenges
     4.2 Initiatives of Business, Academia and Civil Society

V. THE LIMITS OF THE BRAZILIAN APPROACH FOR BRAZIL AND OTHER
   DEVELOPING COUNTRIES; SOME FUTURE CONSIDERATIONS

CONCLUSIONS


                                   List of Tables and Annexes

Table 1:   Brazil as Complainant and Respondent in WTO Cases by Year (1995-2007)
Table 2:   Brazil WTO Cases by Country (1995-2007)
Table 3:   Brazil as Third Party in WTO Cases by Year (1995-2007)
Table 4:   Brazilian Ministry of Foreign Affairs Structure

Annex I: Brazil in the GATT Dispute Settlement System
Annex II: Brazil in the WTO Dispute Settlement System – Complainant, As
                                                        As
Respondent, As Third Party
           Ba l Ma r r n a nr n e o I pr n E pr 19-2007)
              z’        o dg t s               m
Annex III: r is j Tai Pr e i T r s fm otad xot(95           s             s
Annex IV: Brazil as a Complainant or Respondent in which it Filed as a Third Party in a
Connected Case
                                                         3

Although calls for greater empirical work in international law have been gaining ground, there
remains a dearth of it.2 This Article aims to further our understanding of the impact of national
                                                y xm n g hti bh d r l ue f
                                                          i         e
and international legal regimes on each other b ea i n w als ei Bais s o then     z’
legal regime of the World Trade Organization (WTO). The Article assesses how the WTO legal
                         r l
                           z’
regime has affected Baisnational administration and broader government-business-civil
society relations as regards international trade dispute settlement. In turn, it addresses the
strategies that Brazil and private actors within it have used to attempt to affect this very
international legal process. We show how these national and international processes are
reciprocally and dynamically interrelated as part of a two-level game.3

            s i u el n ss m
                s e tm               e
The WTO’ d pt ste etyt and Brazil are particularly important sites of inquiry for
three reasons. First, the WTO affords significant opportunities to governments and private
constituencies (and, in particular, business constituencies) because of its legalized and
judicialized nature,4 catalyzing domestic initiatives to shape international law.5 Big money is at
stake and lawyers with expertise are ready for hire. The WTO, one of the most legalized of
international regimes with an active and compulsory judicial system, provides access to a dispute
settlement forum which could help to offset power asymmetries in international trade relations
  ne h at f h r e f a ” r i ot s o epn h . eod
          e       l
udrt m n e o t “ l o l , o ( cn at t dee t m Scn,WTO
                           e u          w          n       r )                 e
(international) law can have significant impacts on national economies and regulatory practices.
                                                            Oa sw
Who participates in WTO dispute settlement affects WT l ’ application and interpretation
over time and thus its effects on domestic regulation around the world. WTO law directly affects


2
                                    A e eaR as : t d n n raoaE oo iL w eer ,
                                                       i       h          e i
  See generally, Gregory Shaffer, “ N wL gl elm Me o iIt nt nl cnm c a R sa h in                           c”
International Economic Law—The State & Future of the Discipline (Colin B. Picker, Isabella Bunn & Douglas
Arner, eds.) (2008). For example, although there has been a growth in quantitative empirical work on the use of the
WTO legal system, detailed qualitative empirical studies are still lacking. Id.
3
  On two-level game theory, see Putnam 1988; Evans et al. 1993. On the recursive, reciprocal relation of
international institutions and domestic contexts, see Terence Halliday & Bruce Carruthers, The Recursivity of Law:
Global Norm-Making and National Law-Making in the Globalization of Corporate Insolvency Regimes, 112 AM. J.
SOCIOLOGY 1135 (2007).
4
   By legalized regime, we refer to the relative precision and binding nature of WTO rules, and by judicialized
regime, we refer to the use of a third party institution for dispute settlement –in this case, WTO panels whose
decisions are subject to appeal before the WTO Appellate Body. On the concept of judicialization, or third party
dispute resolution, see Alec Stone Sweet, Judicialisation and the Construction of Governance, 31 COMPARATIVE
                            84
POLITICAL STUDIES 147– (1999). On the concept of legalization, compare Kenneth Abbott et al, The Concept of
Legalization, 54:3 INT’ ORG. 385– (2000) defining legalization in terms of a spectrum of three factors: (i)
                          L            399
precision of rules; (ii) authority or bindingness of rules; and (iii) delegation to a third party decision-maker; and
                                                 te o Lgla o’ Rc r i o L w n o ts
                                                  i           i i            h      w
Martha Finnemore & Stephen Toope, Alterna v t ‘ea zt n: i e Ve s f a adP li , 55 INT’                   ic          L
                                                                                              ’ om l e n i f
                                                                                               s
ORG. 743 (2001) (taking a more sociological perspective, and critiquing Abbott et al. fr a df io o          itn
legalization).
5
 For examples of how WTO law catalyzes efforts to create parallel international regimes to create offsetting norms
 n cnt i h
         r n e O se hse a r e e e R g S ii : h T IS ge etn t e
                         a             n
ad osa t WT ’r c,e L w ec H l r“ ei e h t gT e RP A r m n ad h N w
                                               f,        m       fn                      e            e
 ya i fn lc aPoe y a m k g 9
         s     ee u           t         n”
D nm c o Itl t l rpr L w ai ,2 Yale J of International Law 1 (2004); Kal Raustiala and David
        T e ei C m l fr l G nt R suc ,
                 m        e        n       i          e”
Victor, “ h R g e o p x o Pat eec eor s 58 International Organization, 277 (2004); and
Gregory Shaffer and Mark Pollack, When Cooperation Fails: The International Law and Politics of Genetically
Modified Foods (forthcoming 2008) (Chapter 4),
                                                       4

national laws and regulations concerning the importation of goods and services,6 investment,7
intellectual property rights,8 telecommunications,9 financial services,10 government
procurement,11 industrial policy,12 agriculture,13, and customs regulations,14 and it indirectly
affects almost all national regulatory laws and regulatory practices, including environmental
law,15 consumer protection law,16 tax law,17 labor law,18 and gambling regulations.19 Thus,
understanding how countries and constituencies organize to respond to and make use of the
WTO legal system is important. Third, turning to Brazil, Brazil has arguably been the most
successful developing country in its use of WTO dispute settlement. This study should thus be of
great interest to other developing countries who wish to use the WTO legal system to defend
their interests.

More broadly, this Article aims to advance our understanding of two sets of interrelated
questions — who shapes international law through litigation and how they do so; and what
domestic effects do international law and judicialization have. It aims to show that one cannot
understand how the international legal system operates without understanding national systems
and strategies, and, reciprocally, one needs to examine the international legal system to
understand many domestic changes. The Article assesses the various mechanisms at play through

6
  General Agreement on Tariffs and Trade 1994, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade
Organization, Annex 1A, 1867 U.N.T.S. 187, 33 I.L.M. 1153 (1994); General Agreement on Trade in Services, Apr.
15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1B, 1869 U.N.T.S. 183, 33
I.L.M. 1167 (1994) [hereinafter GATS]. [Note to editors: Feel free to cut footnotes 6-19 if not deemed necessary.
7
  Agreement on Trade-Related Investment Measures, Apr. 15, 1994, Marrakesh Agreement Establishing the World
Trade Organization, Annex 1A, 1868 U.N.T.S. 186.
8
  Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement
Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994).
9
  GATS, supra note __, Annex on Telecommunications, 33 I.L.M. at 1192.
10
   GATS, supra note __, Annex on Financial Services, 33 I.L.M. at 1189.
11
   Agreement on Government Procurement, Apr. 15, 1994, Marrakesh Agreement
Establishing the World Trade Organization, Annex 4B, Article III, 1915 U.N.T.S. 103.
12
   Agreement on Subsidies and Countervailing Measures, Apr. 15, 1994, Marrakesh Agreement Establishing the
World Trade Organization, Annex 1A, 1867 U.N.T.S. 14.
13
   Agreement on Agriculture, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization,
Annex 1A, 1867 U.N.T.S. 410.
14
   See Appellate Body Report, European Communities –   Selected Customs Matters, WT/DS315/AB/R (Nov. 13,
2006); Appellate Body Report, European Communities –    Customs Classification of Certain Computer Equipment,
WT/DS62/AB/R (Jun. 5, 1998).
15
   See e.g., Appellate Body Report, United States—Import Prohibition of Certain Shrimp and Shrimp Products, ¶¶
155-59, WT/DS58/AB/R (Oct. 12, 1998); and Appellate Body Report, Brazil –      Measures Affecting Imports of
Retreaded Tyres, WT/DS332/AB/R (Dec. 3, 2007).
16
   See Appellate Body Report, Korea –  Measures Affecting Imports of Fresh, Chilled and Frozen Beef,
WT/DS161/AB/R (Dec. 11, 2000).
17
   See Appellate Body Report, Japan –  Taxes on Alcoholic Beverages, WT/DS11/AB/R (Oct. 4, 1996); and
Mutually Agreed Solution, United States — Equalizing Excise Tax Imposed by Florida on Processed Orange and
Grapefruit Products, WT/DS250/3 (Jun. 2, 2004).
18
   See e.g., Christopher McCrudden & Anne Davies, A Perspective on Trade and Labor Rights, 3 J. INT’ECON. L.
                                                                                                       L
43, 57 (2000).
19
   See Panel Report, United States — Measures Affecting the Cross-Border Supply of Gambling and Betting
Services, WT/DS285/RW (Mar. 30, 2007).
                                                      5

                 m ic t y f r l e os o h e lao n u c lao f
                     ra u               z’ s
a qualitative e p i ls d o Baisr pnet t l azt nadj iazt no    e gi i                d ii i
international trade relations. Its aim is to make more transparent the complex challenges (the
trials) for a state and its constituencies posed by international dispute settlement, in our case
those of a leading developing country — Brazil. While there have been many studies of trade
          ai n r l h A tl sh it m ic s d t u ko l e o Ba l
             n         z, i ie               e r        ra u o
policy-m k gi Bai t s rc it fse p i lt y( or nweg) f r is                           d        z’
handling of international trade dispute settlement and, in turn, its impact within Brazil.

In methodological terms, this study is based on over three years of joint empirical investigation,
drawing on a wealth of primary and secondary sources. Crucially, we have cross-checked our
findings from written sources against interviews with a wide range of Brazilian government
representatives, WTO civil servants, legal and business representatives, and other stakeholders.
In particular, the Article builds on in-depth, semi-structured elite interviews and discussions with
Brazilian officials in Brasília and Geneva, private lawyers that have worked with Brazil,
representatives of Brazilian companies, trade associations, members of the Brazilian bar,
Brazilian academics, leaders of Brazilian think tanks and consultancies, representatives of non-
governmental organizations, and members of the WTO secretariat. We have attempted, wherever
possible, to corroborate information gleaned from interviews in other sources, to minimize our
              r e sea e n o-replicable data. Throughout the book, we have attempted to
                a ’ ln
own and the edr r i c o nn
process-trace20 our hypotheses and claims at both the national and international levels,
triangulating on our subject using all available sources, whether primary or secondary, written or
interview-based, and we have documented our sources as fully as possible in the footnotes.

While earlier work has focused on the great economic powers (and in particular the United States
and European Union),21 this Article assesses the responses and strategies of a major developing
                                                          ea i n Ba l ae p t ue
                                                                 i       z’ t
country — Brazil — in respect of the WTO legal system,xm n g r is tm to s it to
         r l interests and, in the process, shape the interpretation of WTO law over time.
defend Baisz’
Reciprocally, the Article shows how these strategies of Brazil can be viewed as responses to the
WTO legal system, as well as related regional and bilateral trade negotiations. The Article thus
shows both how a large developing country can make use of the WTO legal system, and, in turn,
how that country is affected by it.

As we will see, international trade law has exercised considerable influence in the adaptation of
  r l am n t t n foe n r e n cnm c o c, n,n a i a i e s fh
    z’          ir i
Bais d i sao o fr g t d adeoo i ply ad i prcl ,nt m o t
                                i a                       i               tu r        r         e
 te n
  a’ t
s t s i eraction with Brazilian business, law firms and civil society. Changes at the
international level have helped to unleash a competition for new expertise to take advantage of

20
   On process-tracing, see Alexander L. George and Andrew Bennett, Case Studies and Theory Development in the
Social Sciences (2004), Chapter 10.
21
   See, e.g., GREGORY SHAFFER, DEFENDING INTERESTS: PUBLIC-PRIVATE PARTNERSHIPS IN WTO LITIGATION
                                 a s e n U i t el n uia z i , ul-Private Networks and
                                  ’                p e tm ? c la o
(2003); and Gregory Shaffer, Wht N wi E Dsu Ste et Jd i i t nP b c                    i
the WTO Legal Order, in THE EU AND THE NEW TRADE POLITICS (John Peterson & Alasdair Young eds.), JOURNAL
OF EUROPEAN PUBLIC POLICY (2006). There has been much greater study of the impact of the EU within EU
member states. See e.g. Maria Green Cowles, James Caporaso and Thomas Risse, eds., Europeanization and
   o et Sr t a hne 20)ad a n lr“ h E rpa L gl yt n D m sc o c: p l
         i uul                              e e
D m sc t c r C ag (01;n K r At ,T e uoen eaS s mad o et P lyS iover          e             i i          l
  r ak s, 4 3 n raoaO gn ao 49 20)
          a ”          e i
o B cl h 5: It nt nl rai t n 8 (00>     zi
                                                            6

the opportunities offered by international trade law, involving law schools, policy schools, law
                                                                                             r l
firms, consultancies, think tanks, trade associations and different government ministries. Baisz’
adaptations to the opportunities provided by the legalization and judicialization of international
trade dispute settlement have affected the traditional relationship between the Brazilian state and
private sector in international economic affairs. Brazil has diffused expertise on international
trade matters outside of the traditional foreign ministry to include broader public–        private
networks with the aim of enhancing Brazilian capacity to meet the challenges posed by the WTO
dispute settlement system. The result of these processes, in our view, has not been the weakening
of the state (as contended by some scholars),22 but rather the strengthenin o Bais aai t
                                                                                  z’
                                                                           g f r l cpcyo       t
play a more active role in response to a new international context — the more legalized and
judicialized WTO system.
This Article applies two complementary analytic frameworks to assess these processes. First, the
Article is part of a larger investigation of how changes at the international level affect domestic
institutions and government–   business–  civil society relations around the world, often involving
policy elites.23 New governance processes, whether they consist of transgovernmental (public)
networks,24 transnational (private) commodity chains,25 or mixed public–            private hybrid
           26
networks, have reflected and responded to the challenges of economic globalization and the
transnational institutions and regimes that have arisen to govern it.27 This Article examines how
22
  See, e.g., SUSAN STRANGE, THE RETREAT OF THE STATE. THE DIFFUSION OF POWER IN THE WORLD ECONOMY
(1996); and KENICHI OHMAE, THE BORDERLESS WORLD: POWER AND STRATEGY IN THE INTERLINKED ECONOMY
(1990).
23
     See e.g. GREGORY SHAFFER & DAMIAN CHALMERS, TRANSNATIONAL TRANSFORMATIONS OF THE STATE (2007).
       Project description accessible at http://www.luc.edu/law/faculty/docs/shaffer/transnatl_transf_state.pdf. For a
       fascinating study regarding changes in Latin America regarding economic development and human rights
       policies, see Yves Dezalay and Bryant Garth, The Internationalization of Palace Wars (2002). For a structural
       perspective, taking a realist international relations approach, see Richard Steinberg- get cite. See also Stephan
       Liebried and Michael Zurn, eds. Trasnsformations of the State? (2005).
24
     See, e.g., ANNE-MARIE SLAUGHTER, A NEW WORLD ORDER (2004).
25
     See, e.g., COMMODITY CHAINS AND GLOBAL CAPITALISM (Gary Gereffi & Miguel Korzeniewicz eds., 1994).
26
     See, e.g., JOHN BRAITHWAITE & PETER DRAHOS, GLOBAL BUSINESS REGULATION (2000); and GREGORY SHAFFER,
       DEFENDING INTERESTS: PUBLIC-PRIVATE PARTNERSHIPS IN WTO LITIGATION (2003). Such a framework is
       linked to other studies of networked forms of governance in domestic, regional and global contexts. See e.g.
       Mark Pollack & Gregory Shaffer, Who Governs? in TRANSATLANTIC GOVERNANCE IN THE GLOBAL ECONOMY
       (Pollack & Shaffer eds., 2001). On the increased importance of public–    private networks in public interest
       lawyering domestically within the United States, see Louise Trubek, Crossing Boundaries: Legal Education
         n h hlne fh N w ul It et a ’
               e     l         e           i e
       adt C a eg o t ‘e P b c n rsL w, 2 WIS. L. REV. 455, 461 (2005) (noting a new framework
       for public interest lawyering, involving new public– private collaborations, more flexible tools, and greater
        n r t nl w r es n nae et A Tue te “ h o aoao sn ot st l s pb c
         tn i             e                    )
       i e aoa a a ns adeggm n . s rbks t ,T iclbr i ii cn atoc s c ul
                                                             as        s l        tn            r        ai       i
                                                                                   h h gop h lm d o
                                                                                    a e
       interest lawyers who took adversarial stances toward all interests othert nt ‘ru’t yc i e t    e a
        een
         p s … doa s r o o i i ui s , oe et gni , n o rf rai t n t
                            e e          in
       r r et A vct a nw j n gwt bs essgvrm n aec sadnnpoiogn aoso
                                                 h     n e          n             e                t       zi
                               o i f r.
                                 vg f s
       collaborate in problem-sl n e ot”
27
       r e t l azt n s a rcs o wd i , epn g n pe
         f   o i i               en        n
     We e rog blao a “ poes f i n g deei adseding up of worldwide connectedness, in
       a i a n h cnm c pe .
        tu r   e          e     dp t s e n i r
                                    i itn o
      prcl i t eoo i shr ”Weaath df io f m DAVID HELD, ANTHONY MCGREW, DAVID
                                                        7

the legalization and judicialization of international trade relations have spurred institutional
change within the Brazilian government, reorganization of Brazilian business and the
development of new Brazilian public–   private partnerships for trade policy and trade litigation,
which were able to respond as they did because of particular domestic Brazilian factors.
Second, the Article is part of a larger project on the challenges that the WTO dispute settlement
system poses for developing countries, and the strategies that some of them are developing to
adapt to it, with Brazil being a leading example.28 At uht WT ’ m r l azdad
                                                           h
                                                          l og h    e O s oe e le n  gi
judicialized dispute settlement system offers significant promise for developing countries,
greater judicialization does not come without costs. The demands on human resources, legal
knowledge and experience have multiplied if a WTO member wishes to invoke its international
trading rights, putting a primacy on legal capacity.29 The legal procedures and substantive case
law have become increasingly complex and technically demanding.
Brazil is widely touted as one of the most successful users of the WTO dispute settlement system
among all countries, developing and developed.30 Its relative success before the WTO dispute
settlement system has received national and international attention and arguably has further
  o vt h oe et n r a et t nae cvl n h D h” on f O
     i e e           n              ve o
m t a dt gvrm n adpi t sc roegg at e i t “ oa rudo WT         i y        e
negotiations. For this reason, Brazil is cited as a model for other developing countries. 31 But no
 n hs nl e w als ei Ba l sces
             y           e
oe a aa zd hti bh d r is ucs    n       z’           .
This Article examines for the first time how Brazil has mobilized legal capacity in response to
the challenges posed by the WTO regime. As we will see, Brazil has developed a relatively
effective strategy of public– private coordination involving a reorganized foreign ministry that
now includes a specialized WTO dispute settlement unit, an expanded mission in Geneva
including officials dedicated to handling WTO litigation, an inter-ministerial coordinating body,

      GOLDBLATT & JONATHAN PERRATON, GLOBAL TRANSFORMATIONS: POLITICS, ECONOMICS AND CULTURE, 2
      (1999). Held et al. also have a broader, more complex definition which includes cultural as well as economic
       hnm n: A rcs (r e o poes ) h h m oi a r s m t n n h ptl rai t n f
                                                e       c        e
      peo ea “ poes o st f rcs s w i e bd s t nfr ao i t saa ogn ao o   a o i              e i             zi
      social relations and transactions –assessed in terms of their extensity, intensity, velocity and impact –
      generating transcontinental or interregional flows and networks of activity, interaction and the exercise of
       o e H l tl 991)
            ” d .
      pw r ( e ea 19,6.
28
     See, e.g., Gregory Shaffer, How to Make the WTO Dispute Settlement System Work for Developing Countries
       (ICTSD 2003), available at http://www.ictsd.org/pubs/ictsd_series/resource_papers/DSU_2003.pdf. Much of
       the analysis builds from socio-legal studies of how domestic legal frameworks operate where parties have
                                                                                       yh H vsC m O t ha:
                                                                                         e
       disparate financial resources and legal experience. See, e.g., Marc Galanter, Wh t ‘ ae’ o e u A ed
       Speculations on the Limits of Legal Change, 9 LAW & SOC’ REV. 95 (1974).
                                                                    Y

29
    e Ma uc, r e hr ad r r S a e D e L gl aai Mae xl
            c            c n d
   Se r B shEiR i a tn G eoy hf r“ os eaC pcy tr E p ining Dispute
                                          g         f,                     t     t?        a
 n ii n A t u p g cosnh
   tt n             i
Iiao ad n dm i A t n i t WT ” IT D ,vib a
                          n      i                C
                                        e O ( S )aaal t        l e
http://www9.georgetown.edu/faculty/mlb66/legal%20capacity.pdf.
30
   See, e.g., William J. Davey, The WTO Dispute Settlement System: The First Ten Years, 8 J. INT’ECON. L. 17, 24,
                                                                                                L
    4 ( r 20)nt g“
              c            i
40–2 Ma h 05 (o n,in the last few years developing countries have become more frequent users of WTO
  i u el n bt n bo tad e t ee s A og ee p g on i Ba la m d t ot
   s e tm , h                    u       li r
d ptste et o i asl e n r av t m …. m n dvl i cute, r ihs aeh m s     on          rs z                  e
                                 t el nss m )
                                  e tm
extensive use of the WTO dispu ste etyt ”       e .
31
   Confirmed in numerous interviews as well as symposia and workshops attended by Shaffer, 2003–  2007.
                                                          8

private Brazilian companies, trade associations, economic consultancies, Brazilian and foreign
private law firms, as well as Brazilian and foreign civil society organizations. The Article
    r e,n a i a Ba l s f ehn m f ul–
      s          tu r z’                          s         i
addess i prcl , r isueo m cai so pb cprivate coordination to gather
information and define and advance its interests in WTO negotiations and dispute settlement,
adapting mechanisms analogous to those that were first developed in the United States and
Europe for similar purposes.32
This shift toward the use of public–      private networks for WTO negotiations and dispute
 el n r l s h tn r l vr l ee p et t t y o r r e ea e n
   tm          fc        f
ste ete et asi i Baisoe ldvl m n sa g t a get r i c o
                                   z’         a         o         re     w d a r ln
                            v e xot g et t n e e cnm c rwh ut s r l
                              a          i       o        ca
global markets and the pri t eprn sc roi r s eoo i go t Js a Bais               .             z’
 cnm c ee p et o c hs oe i h i co f r e uprfra n e e
                o           i                  n e r i
eoo idvl m n ply a m vd“ t d et no get spoto ( di r sd              ar               n ca
r i c o) h pi t sc r33 we see a delegation of traditional government functions to
  ln            e v e o”
 ea e n t r a et ,
collaborative networks of state officials, private trade associations and companies and their
lawyers. In the case of Brazil, these networks have linked legal knowledge, which was well-
developed in the north, to southern trading interests, with Brazilian lawyers being trained in the
  rcs r l t j o io ge i e st m n dvl i cut m m e fh
        . z’ a c r                   a te
poesBaisr et ys f r tn r to ay ee p g on y e bro t WT ,        on        r         s      e O
as it shows how a developing country can mobilize legal resources to respond to and advance its
interests through the judicialized WTO regime, including against the most powerful WTO
Members, the United States and the European Communities (EC).34 As we examine at the end of
                                                                    o Ba l apoc,seil
                                                                         z’
this Article, however, there are significant limits to the transport f r is prah epc l        ay
for smaller developing countries.
Whether one views the processes, mechanisms and adaptations that we describe positively or
                            o oe                              Ba l eggm n cn e i e
                                                                   z’
negatively depends, in part,n n’ideological perspective. r is nae eta b v w d
                                    s                                                      e
as a mechanism for deepening WTO norms both internally in Brazil (through its internal
                                                                    hlni o o e cute
                                                                      l n         h
adaptations and diffusion of expertise) and externally (through its caeg g f t r on i ’     rs
policies). Going further, one can view these changes in terms of tools offered to elites within
Brazil to advance their agendas within Brazilian politics and the Brazilian economy. However,
our empirical work, as well other work on Brazilian trade policy-making, suggests that these
one-sided conclusions would be a mistake.35 Certainly international institutions can, and in the

32
     See Shaffer, Defending Interests, supra nt e
                                               o…
33
                               h ‘i h o l ea eoo i i sn h ee p gworld, in GLOBAL ECONOMIC
                                    rm           b
     See Thomas Biersteker, T e tu p’ fi rl cnmc da i t dvl i        e      e      on
       CHANGE, REGIONAL RESPONSE: THE NEW INTERNATIONAL CONTEXT OF DEVELOPMENT 178 (Barbara Stallings
       ed., 1995) 178. See also discussion of general shifts in Latin America in Augusto Varas, Latin America: Toward
       a New Reliance on the Market in GLOBAL CHANGE, supra note __, at 284; and Juan de Onis, Bais e          l
                                                                                                           rz’ N w
                                                     ue 00 …“ e nw oe e r s r t y r d t
                                                                       h
       Capitalism, FOREIGN AFFAIRS 107 (May-Jn 20)( t ‘e m dl r om c a d b Pei n      ’ f           ee          se
       Fernando Henrique Cardoso feature a political economy in which private enterprise, including foreign
        n s n ias nd n epne r os it fr cnm c ee p et .
         v m ,          i                       s
       i et et s s ge ad xadd epni ly o eoo idvl m n )bi                        o     ”
34
   For legal reasons relating to the treaty framework of the European Union (EU), the EU is officially referred to as
the European Communities in the WTO, although the term EU is most commonly used in the media, including in
EU public communications.
35
   For excellent work on civil society participation in the formation of Brazilian trade negotiating positions over
            er d Mo a e a“ r pl
                         t g            d i
time, see Pdo a t V i ,Tae o cy-making in Brazil: Changing patterns in State-civil society
 e t nh ,in
   li p
r aosi ” Mark Halle and Robert Wolfe, (ed.), Process Matters: Sustainable Development and Domestic
Trade Transparency. Geneva, IISD, at 143-182 (2007) [hereafter Veiga, Trade Policy-Making]. Veiga concludes
                                                          9

    O s ae o c a pot ie n poi t s e
                   ee         u ts            d o. ,
WT ’cs d,r topr n i ad rv eol Y tas we will see, the WTO has helped
to open up Brazilian trade policy from a closed state bureaucracy that went back to a time when
Brazil was under military rule, from 1964 to 1984, to one in which both business and other civil
society organizations have much greater access to government policy-making, which has become
much more transparent.36
Part I of the Article provides background on the export-oriented shift in trade policy in Brazil
and in Latin American countries generally during the 1990s, together with an overview of
  r l prc ao n
    z’ ti i ,
Bais a ipt ni and organization for, dispute settlement under the WT ’peeesr               d
                                                                                  O s r cs ,    o
the General Agreement on Tariffs and Trade (GATT), from 1948-1994. Part II presents an
overview of the significant challenges posed by the WTO dispute settlement system for
developing country participation in terms of legal expertise, financial cost and extra-legal power,
                        r l epr ne
                          z’        i
and then summarizes Bais xe ec under it, noting the catalyzing effect for Brazil of early
cases in which it was on the defensive. Part III examines how Brazil has attempted to meet these
challenges by deploying strategies of public-private coordination as a complainant, respondent
                                                      ht i ei r l ucs n
                                                            e       n
and third party. Part IV examines more broadly w a lsbh dBaisscesi WT       z’                   O
dispute settlement — the institutional changes and mobilization strategies that public and private
                                                    Ba l capacity to make effective use of the
actors in Brazil have developed that have enhanced r is z’
WTO legal system. Part V addresses the limitations of the Brazilian model for smaller
developing countries, as well as for Brazil itself, in light of the challenges posed by an
increasingly demanding WTO dispute settlement system, to which, paradoxically, Brazil’h i      rg
                                                                                            s in
of outside legal counsel has contributed, and draws some considerations for the future. We then
conclude.



       . R Z LS H N E N R D N E E O ME T O I Y
      1B A I ’ C A G I T A EA DD V L P N P L C : THE GATT
                             YEARS
1.1         l           o      i
          rz’C a g i ee p n P ly
         B ais h n enD vl met o c
During the 1990s, Latin American countries changed their trade and development policies, to
  a n er ,r h i otust i n sii i ” o c s fh 90 ad 90
    yg        e o e m                  i t n d r lao
vri dgesf m t “ prsbtu o i utazt n pli o t 16s n 17s            ie        e
 o oe epr i t , r e
                 -o e e ” a
t m r “xot r n d t d-liberalizing alternatives. These transformations occurred at a
time when liberalized international trade relations were further institutionalized at the
international level through the creation of the WTO and its judicialized system for dispute
settlement in 1995.




 h “ e e nh t o t d ply
   a h c          sr         a       i
t tt r et ioy fr e o c-making in Brazil reveals the growing participation of civil society in this
 r . d a19
   e” ,
a a I. t 7.
36
   This Article does not examine the question of broader societal change within Brazil, although it provides material
supportive of such inquiry. The Article rather focuses on a subset of change — the relation of international
legalization and judicialization of trade relations to national business-government-civil society relations regarding
the making, implementation and enforcement of trade policy.
                                                           10

The causal explanation for change is always difficult to pinpoint. The best explanation of the
change in Brazil toward a more outward-looking, liberalized trade policy during the 1990s, as for
Latin America generally, appears to be a combination of internal and external structural and
ideological factors involving changed economic and geopolitical contexts and the proliferation of
ideas in relation to the debt crises of the 1980s.37 Bais( d L t A e c’ i pr
                                                              z’ n an m r a ) m ot
                                                            r l a            i       i s
substitution policies of the 1950s through the 1970s were relatively successful, at least as
 e e e n rwh a sFo 95 o 91 Ba l GDP grew at an average rate of 9.4% in
  fc d                 t
r l t i go t r e. rm 15 t 16, r is                    z’
real terms.38 Its GDP continued to grow rapidly through the 1960s and 1970s, increasing from
17.2 billion USD in 1961 to around 42.6 billion USD in 1970, and 237.8 billion USD in 1980,
making for an average GDP growth rate of 6.2% during the 1960s and 8.8% during the 1970s.39
In real per capita terms, Brazil grew at a rate of 6.1% during the late 1950s, 4% during the 1960s
and around 5.5 during the 1970s.40
The oil and interest rate crises of 1979 and the ensuing debt crises of the 1980s and 1990s,
 o ee asd cnm c t nt n r ln n ht a en ae h l t eae 41
         ,                     a i           s tg
hw vrcue eoo i s gao,eu i i w a hsbe cldt “ s dcd.                      l e o                 ”
Elites in Brazil, as in other Latin American countries, became disaffected with past inward-
 o i o c s T e dvl m n eoo i h w s sd o u i m ot ust i
  on         ie               o                 s a
l k gpli . h “ee p et cnm c”t t a ue t j tyi pr sbtu o                  sf                itn
                                          42
industrialization policies was in retreat. Policy-makers noted, in particular, the success of the
37
     See discussion in GLOBAL CHANGE, REGIONAL RESPONSE: THE NEW INTERNATIONAL CONTEXT OF DEVELOPMENT
       (Barbara Stallings ed., 1995); DANIEL YERGIN & JOSEPH STANISLAW, THE COMMANDING HEIGHTS: THE
       BATTLE BETWEEN GOVERNMENT AND THE MARKETPLACE THAT IS REMAKING THE MODERN WORLD (1999); and
       JOHN WILLIAMSON, THE PROGRESS OF POLICY REFORM IN LATIN AMERICA (1990). Simmons and Elkins test for
       explanations for the liberalization of capital controls in terms of the impact of economic competition (affecting
       the demand for liberalization) and social emulation, as through transnational networks (affecting the supply of
       liberalization). They find evidence for both explanations. See Beth Simmons & Zachary Elkins, Globalization
       and Policy Diffusion: Explaining Three Decades of Liberalization, in GOVERNANCE IN A GLOBAL ECONOMY:
       POLITICAL AUTHORITY IN TRANSITION (Miles Kahler & Dave Lake, eds., 2003). As Cason points out, however,
         r l i dp “xot rm t n o c s a f ak s h 90 ad a y 90” n oj co i
           z d                   –        i
       Baid aot epr po o o pli “s a bc a t 16s n er 17s i cn nt nwt
                                                 ie           r           e                l               u i         h
       import substitution industrialization, but they were unsuccessful. See Jeffrey Cason, The state as naïve
       entrepreneur: The political economy of export promotion in Brazil and Tunisia, 26:1 POL’ STUD. J. 46 (Spring
                                                                                                   Y
       1988). For an analysis of the institutional changes in Latin America, see Andrea Bandeira & Fernando Garcia,
       Reforms and growth in Latin America, CEPAL Rev. 77, 79-95 (August 2002).
38
     See JORG MEYER-STAMER, TECHNOLOGY, COMPETITIVENESS AND RADICAL POLICY CHANGE: THE CASE OF
      BRAZIL 38 (1997).
39
      For aggregate GDP data, see the website of the Ministry of Industry, Trade and Development, at
       http://www.desenvolvimento.gov.br/arquivo/secex/evocomextbrasil/evolucaocebrasileiro.xls (January 2008).
40
   See Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.2, Center for International
Comparisons of Production, Income and Prices at the University of Pennsylvania, September 2006; data available at
http://pwt.econ.upenn.edu/php_site/pwt62/pwt62_form.php. Brazil GDP per capita figures are expressed in real
                                                                                                       ya s
                                                                                                         m
terms in 2000 constant prices. For Latin America as a whole, per capita output increased cumulatively b “l ot
                                     % h uh h 90.
                                          r      e       ”
40% through the 1970s and about 30 t og t 16s See JOHN WILLIAMSON, THE PROGRESS OF POLICY
REFORM IN LATIN AMERICA 1 (1990).
41
   See, e.g., THOMAS SKIDMORE & PETER SMITH, MODERN LATIN AMERICA 443 (6th ed. 2005).
42
     See, e.g., Albert Hirschman, The rise and decline of development economics, in ESSAYS IN TRESPASSING:
      ECONOMICS TO POLITICS AND BEYOND 1 (1981); DEEPAK LAL, THE POVERTY OF DEVELOPMENT ECONOMICS
                                                           11

more export-oriented economies of East Asia, with which their countries had been favorably
compared only two decades before. As Varas notes, in the 1970s, Latin American and East Asian
cute w r ot “ne a sces lnwy nutazd on i ( Is’ During the
 on i e f n l kd s ucs u ‘e l i sii cute N C )”
      rs e e i                        f             d r le             rs        . 43
1970s, real per capita GDP grew at relatively similar rates in the two regions –almost 6 percent
annually in Brazil, about 7 percent annually in Korea and Hong Kong, and between 8 and 8.4
percent annually in Taiwan and Singapore. However, growth rates diverged dramatically during
 h 90, ui h h r l r pr ai D r y n bu 1 e et nul ,
  e             n      c
t 18sdr gw i Bais el e cp aG Pge b ol aot pr n anay
                             z’ a              t            w        y            c          l
  h e oe s n a nse pr ai G P r y e e . n . e etnul ,
    l      a           w      a
w i K r ’adT ia’r l e cp a D ge b bten6 ad6 pr n anay
                                         t           w         w      3       6 c            l
 n H n K n’ad i pr s y e e 5 n 5 5
                          g     ’        w             7
ad og ogs n Snaoe b bten ad . annually, compounding the differences
in economic growth over the decade and ever since.44
In 1989, Fernando Collor de Mello won the presidential election and pushed for policies of
monetary stability, fiscal restraint, trade and capital liberalization, and privatization. Trade
          ae h a o “pn g
           l sl                   n          o h u i ol n usak n t cnmy45
                                                 e se
liberals hid itk f oei [Brazil] t t otd w r ad nhcl g h eoo ”   d              i e
                                                                           46
  s e e pai d e gli n r e pnes o ol a t”
                z        e ao             ar
a h “m hs e dr u t nadget oens t w r m re . Fernando Henrique   d ks
  a s, l e o “eedny h r,” h h
    d         a                       e          c
C roo a edr f dpnec t oy w i had provided the intellectual basis for import
substitution industrialization, became minister of finance in 1994 and then, in 1995, President of
the Republic for two four-year terms. Cardoso privatized more state enterprises and further
  pnd r l economy to global competition, although Brazil only gradually adhered to more
oee Bais    z’



       (1983); KATHRYN SIKKINK, IDEAS AND INSTITUTIONS: DEVELOPMENTALISM IN BRAZIL AND ARGENTINA (1991);
       and JOHN WILLIAMSON, THE PROGRESS OF POLICY REFORM IN LATIN AMERICA (1990) (in which the concept of
        Wah g n osnu”s xm n )
              no
       “ si t C ness iea i d.          e
43
     See Augusto Varas, Latin America: toward a new reliance on the market, in GLOBAL CHANGE (Stallings ed.),
       supra note __, at 273. See also JORG MEYER-STAMER, TECHNOLOGY, COMPETITIVENESS AND RADICAL POLICY
                                        3 19)“ a l i sii i l apa d o e poone cs o
                                                    B z’ d r lao n
       CHANGE: THE CASE OF BRAZIL 3 (97 ( r isnutazt n og per t b a rnucd ae f           e
       success. A country that at the beginning of the 1950s still had an agrarian character turned, in the course of 30
        er i o n o t ol s a rn si te A t n o t 90 t e a hr y n duth t
           sn              e     d
       ya , t oe fh w r ’m j i utas t . th ed fh 17shr w s a lay ob t th
                                         o d rl a s               e         e         e           d                a e
       country would close the gap separating it from the OECD countries, much in the same way that South Korea
        n T i n n a d n h 90”
              w         c d
       ad a a i f t i it 18s)      e        .
44
     See Alan Heston, Robert Summers & Bettina Aten, Penn World Table Version 6.1, Center for International
      Comparisons at the University of Pennsylvania (CICUP), (October 2002) available at
      http://pwt.econ.upenn.edu/php_site/pwt61_form.php (computations based on real GDP per capita in constant
      prices). Varas goes further, maintaining that World Bank figures show that real per capita GDP grew by about 6
      percent annually in Brazil (and about 3.7 percent in Latin America), during the 1970s, but actually fell by about
      .6 percent annually in Brazil (and about .8 percent in Latin America) during the 1980s. See, e.g., VARAS, LATIN
      AMERICA,       supra    note     __,    Table    9.1,     at   296– 297.    See     also    the     web      page
      http://www.brazil.org.uk/economy/gdp.html (accessed February 2008).
45
                                                  D cm e , 99 7 “ n h l t n a pi , h
                                                                         S c e ei
     See e.g., A Survey of Brazil, THE ECONOMIST, ee br7 19, ( i et e co cm a n t                   g     e
       osqecs fh pli l n d l i l hne o Ba ln r e o c e o l n o i ).
                        i ic            eoc
      cneune o t s o ta adi o g a cag fr r ia t d plyw r ntogi cm n”
                                                              zi a          i     e        n            g
      Williamson notes, however, that Brazil was among the last Latin American countries to liberalize. See
      WILLIAMSON, supra note __, at 26.
46
     US Library of Congress, Country Studies –Brazil, available at http://countrystudies.us/brazil/80.htm.
                                                           12

liberal economic policies.47 Bais h tn o c r l t a s wm v o t oi o o l a
                                  z’ f           i fc d
                                r l si i ply e e e “l                            e nn
                                                                  o oe fh p i fo l             c
                                                                                o c, si t
                                                                                  i ”
elites toward deregulation –especially in the sphere of trade and industrial ply a h tht    f a
included not only government leaders, but also business people and academics.48 Although the
political left won the election of 2002, the government of President Luiz Inacio Lula da Silva has
  a tnd r l eoo i pli o geater budgetary discipline and relatively liberalized
     ni          z’
m i a e Bais cnm c o c s f r        ie
trade.
  x ra f o cm l et n r l o et ep nt n fr r l cag i r e n
    e       cr
E t nlat s o p m n di e a dm sc xl aos o Bais hne nt d ad
                        e e tn                  i     a i               z’                  a
development policies. The World Bank and International Monetary Fund, as well as the US
Treasury, strongly advocated Brazilian trade liberalization while Brazil negotiated new and
restructured loans. Their leverage increased on account of debt crises, facilitating their demands
for structural adjustment policies as loan conditions.49 Moreover, as other Latin American
countries liberalized their economies, Brazil, competing with them for investment and foreign
market access, followed suit.50
The United States offered not only carrots in the form of facilitating new loans, but also wielded
sticks in the form of trade sanctions. For example, during the 1980s and early 1990s, the Office
 f h n e te r
      e      t      t
o t U id Sa sTae R peeti ( S R t gt Baist d,i uta ad
                            d er n t e U T ) a e d r l r e n si n
                                      s av                 r e         z’ a           d rl
intellectual property policies six times under Section 301 of the 1974 US Trade Act.51 In 1989,
47
     MONICA HIRST, THE UNITED STATES AND BRAZIL: A LONG ROAD OF UNMET EXPECTATIONS 20 (2005). See also
      Andrew Hurrell, The United States and Brazil: Comparative Reflections (2005), in HIRST, supra note __, at 74
       Ba l m vd o r cnm c i r i t n bth rc
          z            w d               b az i           e
      (r i“ oe t a eoo i l e lao; u t poess of economic reform domestically remained
       oe o p x n cekr t e e hr )
                e              e a s
      m r cm l ad hce d hn l w e ”             e.
48
   Winston Fritsch & Gustavo Franco, Brazil and the World Economy in the 1990s, in LATIN AMERICA’
                                                                                                S
INTEGRATION INTO THE WORLD ECONOMY 9 (Winston Fritsch ed., 1991). See Veiga, Trade Policy Making, supra
  o …,t 4 ( f r go t cag o pr i m r ti r i t n r e n d o eoo iaet i i
    e            e rn
nt a13 r e i t “ e hne f a d m[ a el e lao]er et fr cnm c gn wt n
                            h                ag        k b az i           ps e                    s h
   r l.
Bai)z”
49
   See, e.g., ROBERT GILPIN, GLOBAL POLITICAL ECONOMY: UNDERSTANDING THE INTERNATIONAL ECONOMIC
              7 (02 (o n t “ oe br19]h MF f r r l l g as t c pcae f vr
                           i a n                          e        ed z
     ORDER 20 20)nt g hti N vm e [98 t I of e Baiaa e s s ne akg o oe              r     ia
      4 b l n n aahd pe nio h t r ln cnm b s n i t r m e”
           lo        t          c t n a e zi
     $0 ii ad tce a r od i t th Baia eoo y e i icn y ea pd)              g fa l v             .
50
     See Marcelo de Paiva Abreu, Trade liberalization and the political economy of protection in Brazil since 1987,
                                                                                        ei e pai o r l
                                                                                            a
       INTAL-ITD Working Paper- SITI –08 at 8 (April 2004). De Paiva Abreu gives pc l m hs t Bais      s       z’
       competition with Argentina, Chile and Mexico.
51
      ne sco 0,h S R ol i et a ” oe n r i so e r i fh e n i ao f n
               i           e             d n i e
     U dr et n31 t U T w u “ vsgt fr g pate t dt m n it yw r i v li o a
                                                              i       cc          e e        e      e      o tn
       i e aoal li t r ur oal ( e nd yh tu ) o o i h h h n e Sa s ol
        nr i           g g”
      “ t nt nlear h o “nesnb ” a df e b t s t e fl wn w i t U id te cu
                                          a       e s i               e a t, l g c e t                         t       d
      apply (or threaten to apply) a variety of trade sanctions. In 1982, for example, the US footwear trade association
      and unions filed a petition to the United States Trade Representative challenging import practices of a number
       f on i i u n r l m oti ni yt . n el n r l ge o i a u b
               r s c d g z’                        c n         e
      o cute,nl i Baisi pr les gss m I aste etBaiar dt lt nm er of           tm , z              e       f
       e r t n o fo a al te oa l” h U id te Ta R pe n t e on t Ba l a a
        sii               w ,         a m
      r tcos n oter“test pr i .T e n e Sa s r e er eti fud ht r ihd
                                                   ry            t      t      d        s av             a z
      strong defense at the time on balance of payments grounds on account of the debt crisis and did not pursue the
      case before the GATT, although Brazil nonetheless lifted some restrictions. See THOMAS BAYARD & KIMBERLY
      ANN ELLIOTT, RECIPROCITY AND RETALIATION IN US TRADE POLICY 410-411 (1994). In 1985, the United
                                                                                           Ba l i si o c s
                                                                                               z’ d r l i e
      States Trade Representative self-initiated a Section 301 proceeding to investigate r isnutapli in
                   n n r ac n sy i u n r l o c n ot r oyi t rt t n O r l
                        f     i d r c d g z’ i
      support of a i om tsi ut ,nl i Baisplyo sf a cpr h po co. nBais            w e        g       ei              z’
      industrial policy toward developing an informatics industry, see Peter Evans, STATE, CAPITAL, AND THE
      TRANSFORMATION OF DEPENDENCE: THE BRAZILIAN COMPUTER CASE, 14: 7 WORLD DEVELOPMENT (1986);
                                                          13

 h S R idd ht a ko n s S pr 0” gi t r l ei an r l i pr
   e           l
t U T we e w a w s nw a “ue 31 aa sBai ds nt gBaism ot     n     z, g i               z’
                                                                                       52
 i ni e m s pi i r i , o t r i r i s f ni n aa.
  c n g                     o t cc ” g h
les gr i ea a“r rypate t e e wt pate o Id adJpn The US   h cc             a
filed a GATT complaint that it settled when Brazil agreed to relax its import restrictions as part
of a general liberalization initiative under the Collor government.53 The USTR again initiated a
 et n 0 n sgt n f r l n lc a rpr o c s n y 93 h h t
    i           v i i                z’ tl u
sco 31 i et ao o Baisi eet lpoe y pli i Ma 19,w i i          t    ie                        c
terminated in February 1994 in light of the creation of the WTO and the new Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPs), as well as Brazilian assurances.54
In sum, there was a general shift in trade and development policy in Brazil and throughout Latin
America in the 1990s. Although some South American countries have changed course in recent
        sc s eeul n o v , r l oe et ne Pe d t u a a e
                          a         ia
years, uha V nze adB l i Baisgvrm n udr r i n L l hsl gl
                                             z’         n                 se        a      r y
retained its general international trade and macroeconomic orientations. Moreover, the
liberalization of transnational trade has now been institutionalized through the WTO and its
dispute settlement system, as well as through a growing, complex web of bilateral and regional
trade agreements, including Mercosur, which was set up pursuant to the 1991 Treaty of Asuncion
and the 1994 Ouro Preto Protocol.55 While Bais   z’
                                                r l policies can change, they must now do so
within changed international and transnational institutional contexts.56 We now turn to Baisz’
                                                                                          r l
experience in, and organization for, trade litigation before the dispute settlement system under
the GATT, the predecessor to the WTO.


       and Peter Evans, Declining Hegemony and Assertive Industrialization: U.S.-Brazil Conflicts in the Computer
       Industry, 43: 2 INT’ORG. 207 (1989).
                          L

52
     The Brazilian import licensing system had been used to help allocate scarce foreign reserves. BAYARD & ELLIOT,
                             164
      supra note __, at 149– (noting that the US action was, once again, criticized by many GATT members).
53
     The Collor government also agreed to renounce use of article 18(B) of the GATT which provided special
      treatment of developing countries when implementing trade restrictions on balance of payment grounds.
      BAYARD & ELLIOT, supra note __, at 155.
54
     The USTR also targeted other key developing countries in its push for the TRIPs Agreement, including Argentina,
       India, South Korea, Thailand, and India. It applied sanctions against Thailand (in 1989) and India (in 1992), as
         e s ret a i 97, i da n a f ee t udrt G nr S s m f r e ne” rga
          l          i n               h w g rf
       w la A gn n ( 19)wt r i t i bnfs ne i “ ee l yt o Pe r cs por .
                                                              i          s         a      e        fe               m
       BAYARD & ELLIOT, supra note __, at 189, 195. On US strategies, see generally PETER DRAHOS, INFORMATION
       FEUDALISM: WHO OWNS THE KNOWLEDGE ECONOMY (2002) at 86; Susan Sell, PRIVATE POWER, PUBLIC LAW:
       THE GLOBALIZATION OF INTELLECTUAL PROPERTY RIGHTS (2003); Susan Sell, POWER AND IDEAS: NORTH-
       SOUTH POLITICS OF INTELLECTUAL PROPERTY AND ANTITRUST (1998); and MICHAEL RYAN, KNOWLEDGE
       DIPLOMACY: GLOBAL COMPETITION AND THE POLITICS OF INTELLECTUAL PROPERTY (1998).
55
     Mercosur is the Mercado Común del Sur. In 1991 Brazil signed the Asuncion Treaty for the establishment of
         r srad n 94 h uo r o rt o fr h s b sm n o Me ou’ n i t nl t c r
          c                      e           t
      Me ou, n i 19 t O r Pe Po cl o t et lh et f r sr i tu oa sut e
                                                     o           e ai                     c   s st i   r u,
      n u n t er a a ad h a i cm i n t pr a o m n a to Me ou’ or e br
        c d g s e rt                 e ts               m
      i l i i sc t i,n t pre’ o m t eto use cm o m refr r sr fu m m eu                  k      c  s          s
      –Argentina, Brazil, Paraguay and Uruguay. In December 2005, Venezuela was accepted as a new member of
      Mercosur, subject to specific conditions, officially joining the group on July 4, 2006.
56
     Brazilian officials maintain that Brazil retains a focus on the multilateral trading system for negotiations and
      dispute settlement (i.e. the WTO), consistent with its traditional approach. Comments to authors from Brazilian
      officials (2007).
                                                         14

1.2        Brazil in GATT Dispute Settlement
Brazil was one of the 23 original GATT contracting parties.57 Although it was not a frequent user
of GATT dispute settlement in the early years, Brazil became more active as the GATT system
became more judicialized in the 1980s, and particularly so during the last years of the Uruguay
Round negotiations, which took place between 1986-1994.58 Brazil filed 16 complaints during
the nearly 48 years that it was a member of the GATT, with 12 of them being initiated during the
Uruguay Round negotiations.. It was a respondent in six cases during these 48 years.59 Overall,
and in particular on account of its activity during the Uruguay Round negotiations, Brazil was
the fifth most active user of the GATT dispute settlement system.60 Annex I contains a complete
list of all GATT cases involving Brazil.
  ui h A Ts
     n e
D r g t G T ’ first three decades, Brazil was an infrequent participant in dispute
settlement.61 Although it was a respondent in one of the first GATT cases –Brazilian internal
taxes –a case brought by France in 1949,62 it was not until 1962 that Brazil brought its first
complaint, one against the United Kingdom (UK) in response to a proposed tariff that would
have increased the margin of preferences that the UK provided to Commonwealth countries for
bananas.63 Brazil did not participate again for another 15 years, when it brought a complaint
against EC sugar export subsidies in 1978, which resulted in a panel decision against the EC in
1980, but no significant change in EC policy.64 Interestingly, these earlier GATT cases
prefigured cases that were to come before the more judicialized WTO system decades later, as
we will see in Part II.

57
     Brazil formally joined the GATT on 30 July 1948.
58
     According to a Brazilian government source, Brazil always identified dispute settlement as an important issue,
      although it placed more attention on negotiations in the early years. Seven rounds of trade negotiations were
      completed between 1949 and 1979. Interviews with Brazilian foreign officials of the Brazilian Mission in
                   24
      Geneva, 20– September 2006.
59
                ( a lnh A T i t el n S s m )
                 B z    e     p e tm     e .
     See Annex I“ r ii t G T Dsu Ste et yt ”
60
     From the data base of Eric Reinhardt and Marc Busch, provided to us, and confirmed in email from Eric
      Reinhardt, 1 November 2006. The four most active members during the GATT, were, in order, the United
      States, the EC, Canada and Australia.
61
     See case tables in ROBERT HUDEC, ENFORCING INTERNATIONAL TRADE LAW: THE EVOLUTION OF THE MODERN
       GATT LEGAL SYSTEM (1993); and ERNST-ULRICH PETERSMANN, THE GATT/WTO DISPUTE SETTLEMENT
       SYSTEM: INTERNATIONAL LAW, INTERNATIONAL ORGANIZATIONS AND DISPUTE SETTLEMENT (1997). All cases
       involving Brazil during the GATT period are listed in Annex I.
62
     Brazil: Internal Taxes, 25 April 1949, GATT/CP.3/SR.9. The working party recommended that Brazil liberalize
       its discriminatory internal taxes, which Brazil was reported to have done ten years later in 1958.
63
     UK: Increase in Margin of Preferences on Bananas, 9 December 1961, SR.19/12. The UK abandoned its
       rpsd a f n e e f
                rf c a        w ot a e t ae se r
                                     h t e
      pooe t i i r s ae m n s f rh pnl r ot        ’ p .
64
     EC: Refunds on Exports of Sugar, 14 Nov. 1978, L/4722.
                                                          15

Brazil significantly increased its use of GATT dispute settlement after the reforms to the GATT
system in 1979 at the end of the Tokyo Round of trade negotiations, following which (in 1981),
the GATT established a specialized legal division within its secretariat to assist the three-
member panels that heard GATT complaints.65 Since the GATT panelists were largely diplomats
                           ai t G T er a a se l i s n ea e fn o ko l e
                              sh               e rt g v i
designated on an ad hoc bs , e A Tsc t i’l ad io bcm a ot f nweg                               d
of GATT precedent, working to create a jurisprudence that was more legally rigorous, and less
diplomatically oriented. In this way, the post-1979 reforms were a foretaste of the more intensive
judicialization that was to come with the establishment of the WTO and its Appellate Body.
Under the revised GATT system, Brazil initiated seven complaints in the 1980s, four of them
between November 1987 and August 1988. In 1980, Brazil brought a case against Spain
 ocr n t a f r t n o urat of , i h ae f d g h S a ’ m aues
       n g s rf e m                        e     e
cne i i t i t a et f nos dcf ewt t pnli i t t pi s esr  h e          nn a            n
were not in conformity with GATT Article I, the most-favored-nation clause.66 In 1982, Brazil
joined eight other sugar-producing countries in a second complaint against EC sugar subsidies,
with the United States filing separately. This complaint again resulted in no change in EC
policy.67 In 1986, Brazil brought a complaint against the United States in response to a tariff
increase and production subsidies for non-beverage ethyl alcohol, but did not pursue it, allegedly
because of the limited amount of relevant Brazilian exports.68
  w f r l cm ln dr g h 90 w r
             z’          at       n e                e
T oo Bais o p i s ui t 18s e in response to US unilateral trade measures
                                                                            bt r l cm ln
under Section 301 of the US 1974 Trade Act (that we discussed above), u Bais o p i sz’         at
                                           a d A T o p i n e os o S h a t
                                            t                   at
were to little avail. In 1987, Brazil initie aG T cm ln i r pnet U t et “ s                 r s o
 m oe e lt y a f n e e o 70 ii f r ln xot eas f r ln
           tio rf c a                             ln
i ps r aa r t i i r ss n$0 m lo o Baia epr”bcueo Baia        zi            s                   zi
restrictions affecting the informatics sector. The case was settled after Brazil agreed to a number
of legislative and administrative changes.69 In 1988, Brazil filed a complaint in response to US
retaliatory tariffs of 39 million USD in a Section 301 case concerning pharmaceutical patent
 rt t n I t a el t s i n h ot t f r l
     ei           o          td i m               e     e
po co. t o w sste,h t ei t cn x o Baisacceptance of the TRIPs       z’
                                     70
agreement as part of the new WTO.

65
                                     57,  138
     See HUDEC, supra note __, at 53– 137– (noting the Agreed Description of Customary Practice, and the
        ne t i n i t el n h h e et e crf d h oj t e h d
           sn n           p e tm , c s i y ti a e i i
       U drad go Dsu Ste etw i r pcvl “e ie t t b cv t r-party adjudication was
        s b se A T r i , n o m td o ae h r i m r f cv n h u r ” n u n
         ai                cc ”           t           i cc
       et lhdG T pate adcm ie t m k t spate“ oee et ei t ft e i l i      f i        e u, cd g
       h uh a e n i f rcdr or
        r          itn                 s
       t og “ df io o poeue f creating panels, and some rule-of-thumb time limits for the various
        hss fh vr l rcdr .
                 e a               ”
       pae o t oe lpoeue)See HUDEC, supra note __, at 42.
66
     Spain: Tariff Treatment of Unroasted Coffee, 29 Feb. 1980, L/4948. Spain then equalized the tariff rates for all
       coffee. See HUDEC, supra note __, at 484.
67
     EC: Sugar Regime, 8 April 1982, L/5309.
68
     United States: Measures on Imports of Non-Beverage Ethyl Alcohol, 13 May 1986, L/5993. See HUDEC, supra
      note __, at 530.
69
     United States: Tariff Increase and Import Prohibition on Brazilian Products [Informatics Dispute], 27 Nov. 1987,
      L/6274. See discussion in HUDEC, supra note __, at 552–  553.
70
                                                                        “ a cu cl e lt n] 1 uut
                                                                         P m   i s aao ,
     United States: Import Restrictions on Certain Products from Brazil [ hr aeta R tii ” 3 A gs
      1988, SCM/89. .
                                                           16

Brazil also brought unsuccessful complaints against the United States for violation of most-
favored-nation treatment in US countervailing duty proceedings involving rubber footwear
(which it followed with a similar complaint in 1992),71 and for an export subsidy program
benefiting soybean oil.72 The panel decided against Brazil in one case, and Brazil did not request
the formation of a panel in the other. The United States, in turn, brought two complaints against
Brazil during the decade, one in 1983 against Brazilian export subsidies on poultry,73 and the
other in 1989 against the Brazilian import licensing regime following the Super 301 listing, both
of which were settled.74
                                      e eh
                                       o e O s r t n, r l ruh svn oe ae
                                                        ei          z
In the first half of the 1990s (just bfr t WT ’ c ao)Baibogtee m r css
and was a respondent in one, four of them resulting in a panel report.75 Five of Bais   z’
                                                                                     r l seven
complaints were again against the United States and EC, and two were against Mexico. They
largely involved import relief measures and were of a low political profile. They were:

        a complaint against EC anti-dumping measures involving cotton yarn;76

        a complaint concerning US quantitative restrictions on wool suits;77

        a complaint against anti-dumping measures imposed by the US on steel products;78

        a complaint against the EC in respect of the concession compensation provided to the US
         following the US GATT complaint against EC protection of oilseed producers;79

71
     United States: Collection of Countervailing Duty on Non-Rubber Footwear, 31 May 1988, SCM/M/38. See
      Hudec, R. (1993): 565–   566. The panel found against Brazil, but Brazil blocked adoption of the report. A
      separate GATT panel in a subsequent 1992 Brazilian case against the same countervailing duty order found
      against the United States. See Brazil v United States: Countervailing duties on non-rubber footwear (1988). No
       el n hw vr per o ae en e hd o r l stf t nSee
         tm ,             ,       s                a           z’ ia i
      ste et o ee apa t hv be r ce t Baisas co. HUDEC, supra note __, at 566.
72
     United States: Export Enhancement Program (EEP) Subsidy, 31 August 1988, SCM/89. Brazil, however, never
      requested formation of a panel.
73
     Brazil: Subsidies on the Export and Production of Poultry, 27 Sep. 1983, SCM/Spec/19. The US complaint
       o o e a i l oe gi th C T e o p i s lgd e el f rh m j epr rr hd
         l         ma           n e                 a t l y e td t e
      fl w d s ir n aa st E . h cm ln aeel w r ste a e t “ a r xot sece                   o      e a
       n ne t i aot u ar r n n xotus i ”
               sn n              u sa t                  ds
      a udrad g bu m t let i o eprsbi e.HUDEC, supra note __, at 514.
74
     Brazil: Restrictions on Imports of Certain Agricultural and Manufactured Products, 11 Oct. 1990, DS8/1. It was
       el hn h o o gvr eti ic t l e le Ba l i prpli .
         td            e l          n        g f a l b az
       ste w e t C l r oe m n s n i n yi r i d r ism ot o c s        z’            ie
75
     The only complaint brought against Brazil, during the 1990s, listed in Annex I, was the EC complaint brought in
      1992 under the Subsidies Code in response to Brazilian countervailing duties on milk powder. See Brazil –
      Imposition of Provisional and Definitive Countervailing Duties on Milk Powder and Certain Types of Milk
      From the European Economic Community (1994).
76
     EC –Imposition of Anti-Dumping Duties on Imports of Cotton Yarn from Brazil (1995).
77
     US: Quantitative restrictions on wool suits (1992).
78
     US: Antidumping actions on steel products (1992).
                                                         17

        a complaint brought with ten other countries against US internal measures favoring US
         tobacco;80 and

        two complaints against Mexico concerning anti-dumping measures on textiles and
         electric power transformers respectively, neither of which resulted in the formation of a
         panel.81


This spurt of Brazilian complaints under the GATT was a response to the opportunities offered
                                                                     ol n c a r l cv
                                                                        d ip e z’ i
by the judicialization of GATT dispute settlement and it w u ati t Baisat e
engagement under the WTO system. However, although Brazil was relatively active during the
last years of the GATT and the run-up to the WTO in terms of filing complaints, only a few of
these cases resulted in the formation of a panel (and thus of full litigation) and, more importantly,
most of these cases did not result in any change in the tare dcut ’ pli . Moreover,
                                                               gt on ys o c s
                                                                 e          r       ie 82
these cases were of a low political profile. As a result, the GATT complaints involving Brazil
received little public attention, and involved little to no engagement of the private sector (except
for some back-up support in import relief cases where the company already had hired a lawyer
for the domestic proceeding behind the complaint). As we will see, WTO dispute settlement has
since gained a much higher profile in Brazilian government, industry, the private bar, and the
media.


 . rz’O gnz i o G T
 3   l      ao
1 B ais ra i t nfr A TNegotiations and Dispute Settlement
  r li
   z’
Baismport substitution policies affected the structure of trade policy-making within the state
bureaucracy and led to a relatively passive and fragmented role of the private sector and civil
society regarding international trade negotiations and the enforcement of international trade
law.83 B fr t si i Baia plyn h er 19sBais
          o e f             zi       i       e l              z’
        e eh h tn r ln o c i t a y 90, r l state bureaucracy for trade-
79
     EC: Oilseed concession compensation (1993).
80
     United States –Measures Affecting the Importation, Internal Sale and Use of Tobacco (1994). The US measures
      were challenged as a violation of GATT Article III.
81
     Brazil brought two complaints against Mexico concerning anti-dumping measures on textiles and electric power
      transformers, but neither of them resulted in the formation of a panel. Mexico: Antidumping proceeding on
      Brazilian textiles (1992); and Mexico: Antidumping actions on electric power transformer (1991).
82
    n a , e i le l f r l complaints against the US strategic use of Section 301 actually resulted in
       c t n st
   I f t h f ar u o Bais        z’
significant changes in Brazilian domestic law and practice because of the threat of US trade sanctions. The Brazilian
practices that the US challenged under Section 301 were further constrained respectively by the new WTO TRIPS
Agreement and the Agreement on Import Licensing Procedures. In turn, the new WTO dispute settlement system
somewhat constrained US unilateral measures against Brazil under Section 301.
83
                           Ta -P ly k gn r l r io a s [e a e Ta io a s n
                               d    i        n        z: n t n h
   Pedro da Motta Veiga, “ r e o c Mai iBai Tasi Pt ” hr f r r si Pt ]i IDB–      et       n tn h ,
INTAL/ITD/STA, The trade policy-making process: level one of the two level game: country studies in the Western
Hemisphere, Occasional Paper 13 (2002), at 56, available at
http://www.thedialogue.org/publications/program_reports/trade/trade_policy1.pdf.
                                                         18

related matters was centralized within two entities, one for trade negotiations, and the other for
 h m l eti f r l m ot ust i o c.
  e      e ao               z’                 itn i
t i p m n t no Baisi pr sbtu o ply The Brazilian Ministry of Foreign
Affairs (commonly known as Itamaraty after the palace in which the ministry was located in Rio
de Janeiro until 1970) centralized all decisions regarding trade negotiations. The implementation
 f r l m ot ust i o c s
       z’                  i t n ie
o Baisi pr sbtu o pli , in contrast, was undertaken by the Department of
Foreign Trade, known as CACEX (or Carteira de Comércio Exterior do Brasil), within the
Ministry of Development, Industry, and Trade. Until CACEX was eliminated at the start of the
                                           s
1990s as part of the Collor government’ reforms, it was responsible for the trade aspects of
       s
Brazil’industrial policies, pursuant to which it oversaw export promotion, including through the
provision of grants and tax and credit incentives, and import protection, including through
administrative requirements for import licenses over which it operated with considerable
discretion.84 In reflection of Baisi prsbtu o pr i , CACEX took a dirigiste,
                                   z’
                                 r l m ot ust i a d m itn a g
protectionist orientation.

  h r aos e e A E n h r a et udr r l i prsbtu o o c
       li        w                      e ve o
T e e t n btenC C X adt pi t sc r ne Baism otust i ply             z’                itn i
were organized on a sectoral basis, as opposed to a horizontal one involving an encompassing,
peak organization to represent business.85 A V i nt ,“g      e
                                                s e a o s CACEX was itself structured
alongside sectoral divisions. Hence the dialogue and consultations between public sector and
                                                                  tu t n 86
                                                                 rc ao ”
private agents… were almost entirely restricted to [a sectoral] a i li . This sectoral focus
                      r l prah o
                        z’
also characterized Bais apoc t international trade negotiations, a model which
predominated until the end of the military dictatorship and the election of the Collor government
in 1989.87 In the process, civil society representatives were largely shut out of trade policy-
making, and neither the Brazilian legislature nor Brazilian media paid much attention to it.
   A E ’organizational and import substitution approach led the private sector to become both
 C C Xs
more fragmented and passive on trade matters negotiated at the international level, and in
particular international legal matters. Government-business relations were generally non-
transparent, characteristics of “ authoritarian State, [whose] economic policy instruments
                                an


84
    e a re,C C X c d s pb c gny e om n e li ad
      g      t                 e           i            f     g g ao
   V i w is“ A E at a a ul aec pr r i r u t n n operational functions, providing
financial resources to the private sector, managing tax and credit incentives, promoting exports, directly trading
                                                                       a f a i s e a r P ly
                                                                        rf r r” g
export products and controlling imports through a wide array of non-t i bre .V i Tae o c-Making,d      i
 ur nt a13Se l Rex A. Hudson, ed. Brazil: A Country Study. (Washington: GPO for the Library of
          e
spa o …,t 5. e a o           s
Congress, 1997) (chapter on Trade Policy).
85
   Schneider likewise finds that Brazilian cross-sectoral (encompassing) business associations, while relatively
                   t f , e e t e eks t “cnm c n pli lle e l l i u vn d h .
                   ae         e li y                  a
wealthy and well-s f dw r r avl w a,o hteoo iad o taet r u r c cm et t m”  ic is g a y r                    e e
Ben Ross Schneider, Business Politics and the State in Twentieth-Century Latin America 93-94 (2004). He finds
               s “ ay a o et a s ii s e o a r w i cneun y nor d a ipt n
                ,           r       o l o ao
that, in contrat m n nr wsc r asc t n w r s f oe, h h osqet ecuae prc ao
                                                           e    v d       c              l         g        ti i
 nh e s ii sa e t iecm as g ns d a9.
     o      o ao t            a
it s asc t n r hrhnn no ps n oe.I. t 7         i         ” ,
86
                           k gspa o …,t 5 (noting t ta e a alca c r of this model is that
                             n
   Veiga, Trade Policy-Mai ,ur nt a13      e                    a     m k e ae
                                                               h “ r r b hr t istic
                                                                            ) e a l nt t m at fh
                                                                             . g s e e
both design and management of these instruments were essentially sectoral” V i a o o sh i pco t                  e
          cnm c re it a 18s h h l t a r adt i ao fh et a ehn m o
                   i         e t
macro-eoo ic ssn h le 90 w i “ d o gaul e r r i o t sc r m cai s f
                                              c e             d     eo tn          e ol                s
consultation and negotiation between State and business actors typical of industry and trade-focused policy-making
                   ust i I pr d d a11
                        itn S i ” ,
during the import-sbtu o ( ) e o.I. t7.
87
    e V i , r io a sspa o …,t 3
           g     n tn h
   Se e aTasi Pt ,ur nt a1.               e
                                                         19
                                                                  88
[were] under the control of a strong techno-bureaucracy.” Private businesses and trade
associations relied on their informal connections with the government for export promotion and
import protection.89 At times, specific industrial sectors could become activated over
negotiations that affected them, such as the textiles sector over the Multi-Fibre Agreement or the
 t l et oe t eo ao f S V l t y xot et i s 90
  e       o          e      ii                 ua
s e sc r vrh ngtt no U “ o n r E prR sa t” Overall, however, the     rn .
private sector did not coordinate to lobby the government over trade positions in the GATT.
                                t go
                                 h
Thus, Veiga finds, although “ ear-industrial sectors closely monitored the progress of the
Uruguay Round, [they] rarely participated in the definition of Brazilian positions.91
                                                                                   ”
             fc to e ro r l ogn ao fr A T i u el n bcue
              fu         p          z’           zi
It is more dii lt r ot nBais rai t n o G T d ptste et eas there      s e tm
are few records and little has been written about it. The Ministry of Foreign Affairs generally
                              r l apoc oGATT dispute settlement, receiving little to no
                                 z’
monopolized control over Bais praht
proactive input from the private sector. The one exception is that the government did receive
                             h r a o pn s US
                              e ve                e
[occasional] support from t pi t cm ai ’ and EC-based lawyers the few times that
Brazil challenged US and EC import relief measures (such as anti-dumping and countervailing
duty determinations) before the GATT, where the attorneys had already worked in contesting the
                                                           T e r a et ’ ee l prah
                                                                   ve os
agency decisions respectively within the US and EC. h pi t sc r gnr apoc,           a
however, was to defer to the ministry on such matters, so that the government assumed the costs
                                                         t a nt n lh r t n fh
                                                                       i e ei
of representing Brazilian interests before the system. Iw s o ut t c ao o t WT ’       e Os
more judicialized (and significantly more costly) system that the government realized that it
  edd h r a et ’ s s neto
          e v e o s ia
nee t pi t sc r as t c fund outside attorneys, and the private sector became
more engaged, in part on account of the relatively greater legal certainty provided by the WTO
dispute settlement system.92 As we will see, both the new WTO legal regime and Brazilian state
actors need for legal assistance have provided incentives for business to organize for
international trade dispute settlement.93 [need to follow-up further re GATT years]

88
   Veiga, Trade Policy Making, supra note…,t 5.a13
89
   In terms of broader business-government relations, see Ben Ross Schneider, Business Politics and the State in
                                          0 (04 (     Whr ue c t i spr nle nt rs
                                                            e a ac n
Twentieth-Century Latin America 108-19 20)“ e br ur ir g (e oazd e ok)               s i           w
                                      t e t i si as ii s s r l “ st i le canl o
                                       i        v          o ao ”
predominated, firms had fewer incen vso netn s c t n.A a eu ,i tu oazd hne frs t n itn i                     s
  a ipt n y s ii sn o c m k g ea en e i l a iBa l .
    ti i            o ao           i         n
prc ao b asc t n i ply ai … bcm i r s g r en r i)            c an y r              z”
90
     e aTa io a sspa o …,t 4
       g      n tn h
   V i , r si Pt ,ur nt a1.          e
91
     e aTa io a sspa o …,t
       g      n tn h
   V i , r si Pt ,ur nt a14.         e
92
   Karen Alter provides an example of the differences between GATT and WTO dispute settlement for Brazil in
 e t no r l “ n-rni d pt i h U e r n t E ’ r t no sl l of . h w is
   li          z’ o
r ao t Bais l g un g i u wt t E r a i [ e U st a et fo b cf e S e re,
                                n s e h e                 gdg h             ]em                u e e”               t
 Ba la nt us d c
      z              u
“ r ihd o pr e a omplaint under the old GATT system because it knew the complaint would be blocked.
Negotiations under the new system got nowhere until Brazil notified the EU that it would request formal
consultations at the next Dispute Settlement Body meeting—the first step in initiating the dispute resolution process.
  he asa r h U f r ocs osta pe o l a e m os l ad h i u a r l d
      e       t, e           ed
T r dy le t E of e cnes n ihd r i s si w r i ps b ,n t d ptw seo e.
                                          i             v uy d e                  ie          e s e            sv ”
   a n lr“ eo i r xcr t g i u sT e O s e i u e l i ss m” 9 n raoa
     e e             vg            bi s e
K r At ,R sl n o eae an d pt : h WT ’nwd ptr o t n yt ,7: It nt nl      s e s uo             e        4 e i
Affairs (July 2003) (based on an interview with a Geneva-based diplomat).
93
   Similarly, Schneider examines state-provided incentives for business to organize in Latin America, and Shaffer
examines state incentives in the US and EU in the specific context of WTO dispute settlement. Cf. Schneider,
   ui sP li ,ur nt a1 ( r a m n r ()h s tat n bsep ivr t n n ui s
     n        ic            e            c
B s es o tsspa o …,t 5 “oe ru eta :1 t tte cos etxln a ao i bs es
                                                g       s e        a a        i              a     ii             n
organization in Latin America; (2) that state actors help organize business in order to reduce their own
vulnerabilities and advance their policy agendas; and (3) that the diverse kinds of selective incentives states provide
 o ui s hv s n i t d f etf c n ui sogn ao”ad hf r e ni It e
        n          g fa l f r             f s           n          zi
t bs es ae i icn y ie ne eto bs es rai t n;n S a e D f d g n r ts, supra             f, e n e s
                                                       20

Brazil had, however, two attributes that would later facilitate its engaged participation in WTO
dispute settlement. First, it had a professionalized Ministry of Foreign Affairs with a strong
esprit de corps, where selection and advancement of officials was largely based on merit. The
ministry is known for its relative advantage over other organs within the Brazilian state in terms
of its unified institutional structure, relative autonomy, professionalism, and ability to adjust to
outside developments when necessary.94 Zairo Cheibub, for example, points to the changes the
ministry made in its structure in 1961 and in 1973 in response to the intensification of
multilateral trade negotiations.95 These adaptations foresaw the mi syscagsdr gt
                                                                         ir
                                                                       n t ’ hne ui h        n e
                                                                   a ngtt n ad h
                                                                    d       ii
1990s and 2000s in response to the Uruguay Round and Doha tr e eo aos n t WT ’            e Os
judicialized dispute settlement system.96 The Foreign Affairs Ministry has long had a strong
interest in international economic affairs and has developed corresponding expertise. Because of
its relative advantages over other organs within the Brazilian state, the Ministry of Foreign
                                                         e r i n Ba l i e t nl
                                                          e i           z’ t n i
Affairs has been able to retain its central position in dt m n g r isn raoatrade and
economic policy, although other ministries have become increasingly involved as access to
Brazilian trade-policy making has broadened.97
Second, Brazil had relatively well-funded and well-staffed trade associations that have been
relatively better able to overcome collective action problems than businesses in other developing
countries. Brazilian legislation long included a compulsory tax that went to all business
                                                                s e She ew is“vri
                                                                           d
associations, which often used it to hire economic expertise. A B n cni r re,oe t et          m
the statutory provisions for financing compulsory associations bankrolled some of the wealthiest
business associations in Latin America,w i w r alt acm le eom u r or s 98
                                              c      e e             a
                                         ” h h e b o cu u t“nr ose uc .                c e”
Moreover, as elites circulated between government and business, whether as employees or as
consultants, relatively close relations have been developed in many cases. These human and
financial resources could be tapped, as we will see in Part IV.99
In sum, before the creation of the WTO and the launching of negotiations to establish a Free
Trade Agreement of the Americas, foreign trade was not an issue which mobilized Brazilian civil


  o … e m n g S n E oe et r aos i ui si WT i u el n ir ao t bt
   e x          i                      n
nt ( a i n U ad Ugvrm n ’e t n wt bs esn Od ptste etn e t no o
                                             s li            h n                  s e tm                 li     h
the increasing need of state actors for business assistance, mediated by differences in traditional business-
government relations in the US and EU concerning international trade policy and litigation).
94
    fPt E ascnet fe bde at o y n h h ue c thv tso h r a et bte i
         e                                     o       ”
   C. e r vn’ocp o “m edd u nm ,i w i br ur s aei t t pi tsc r ur a
                                                               c      a a            e       e ve o           tn
                         ai , h h e ot d w s t kyo h ee p et s t s f cvns” e r
                            n       c         e
autonomous decision-m k gw i h cn ns a “ e e t t dvl m n lte e et ees Pt
                                                          h           e      o       a a’ f i               . e
Evans, Embedded Autonomy: States & Industrial Transformation (1989).
95
           . hi b “ a e a i o ta o r l rcs e uor i ço o t a t”v. 23, n. 2,
                 b            rr p m i                   s:
   Zairo B C e u, A cr i d l ac n Bai opoes d brc taã d I m r i       o            az             a a,
Revista de Administração Pública 97-128 (1989), at 125.
96
                                           A n i c nl ae a o ta r lr e o é i x r r n
                                                st o i               íc       se a
   See also P.M. Veigaand R.M. Iglesias, “ i tui add d pli baii d cm r oet i ” i             c       eo ,
Pinheiro, A.C, Markwald R., Pereira, L.V. (ed), O desafio das exportações, at 51-96 (Rio de Janeiro, BNDES)
(2002).
97
                            k gspa o …. 16 ad hi bspa o …,t 2.
                              n            e a            b
   See Veiga, Trade Policy-Mai ,ur nt ,t 7;n C e u,ur nt a17   e
98
    cni r ui sP li ,ur nt a1113Weh k e She e fr m hs i h pi i h
          d, n            ic
   She e B s es o tsspa o …,t 0,2. t n B n cni ro e pain t s o tn i
                                       e                a     d      zg i n s
comments on our paper at a workshop at Northwestern.
99
             cni r ui s P li ,ur nt a9 ( er n t e o bs es seil n syn a
                  d, n           ic           e        r s av    n , ay d r
   See also She e B s es o tsspa o …,t 6 “ peeti s f ui s epc l i ut i So
  al r l l i r rm n t i t oio i a ot f oe et )
     o g ay g d              el        p tn
Pu ,eu r f ue po i n yno psi sn lsr o gvrm n ”       l s    n s.
                                                         21

                  n e e i f r l i prsbtu o o c sBrazilian industry did not
                       f co            z’
society. Rather, i r l t no Baism otust i pli ,         i t n ie
organize for foreign trade policy and dedicated little lobbying to it until the early 2000s, in part
because industry primarily targeted the large internal Brazilian market, in part because even for
 oe n r ei sys ou was on its relations with CACEX for ad hoc support and import
     i a         d r
fr g t d,nut ’ fcs
relief at the national level (for which the GATT did not pose a significant risk), and in part
because of a corporate culture which viewed external economic affairs as predominantly a
 oe et ae s r l o c s h t o oe pn
      n           t.            z’       ie       fd
gvrm n m tr A Baispli sie t m r oe-market and export-oriented
alternatives, especially after this policy shift was accompanied by extensive legal commitments
under a new judicialized international trade law regime, Brazilian industry and government
began to devote more attention to international trade law and practice, respectively exploring
                                                        r l m r t hr ei d n, vr l
                                                          z’      k          e r
strategies to increase exports, retain protection for Bais a e w e dse ad oe l                   a,
increase economic output.


                II. THE CHALLENGES POSED BY WTO DISPUTE SETTLEMENT:
               THE CATALYZING EFFECTS OF THE EMBRAER CASE FOR BRAZIL

2.1       The Challenges of WTO Dispute Settlement
The WTO expanded the scope of the 1948 General Agreement on Tariffs and Trade (GATT) to
include 19 agreements under a single framework and a vastly expanded membership, consisting
of 151 members today. Most countries have significantly reduced tariff rates,100 and the WTO
has legally constrained the use of other barriers to trade. Centrally important for our story, the
WTO created a judicialized dispute settlement system with compulsory jurisdiction and an
appellate process to enforce these undertakings, unlike under the former GATT regime where a




100
      Since the 1980s, tariff rates have been significantly reduced around the world. Within Brazil, average tariffs
      dropped from nearly 50 percent in 1985 to 12 percent in 1995, and 10.4 percent by the start of 2005. For 2004
      figures, see Peter Hakim, Two Ways to Go Global, FOREIGN AFFAIRS 148 (Jan.–        Feb. 2002). See also Pinelopi
      K. Goldberg & Nina Pavcnik, The Response of the Informal Sector to Trade Liberalization, JOURNAL OF
                                     2 43 43 20)nt g h “ e vr ea f el e f
                                                            i a h
      DEVELOPMENT ECONOMICS 7: 6,7 (03 (o n t tt ae g t i dcnd rm 5. i 18 t  a rf i                      8
                                                                                                  o 8 % n 97 o
                                                  ) n h w a et a t o Ba l epr,h n e te
                                                   .     e
      15.4% in 1998 in Brazilian manufacturing” I t tol gsm re fr r is xot t U idSa s
                                                                 r          ks          z’         s e t           t
      and the European Communities, average tariff rates declined from 8 percent in the EC and 6.5 percent in the US
      in 1990, to 6.1 percent in the EC and 5.8 percent in the US in 1995, to 4.3 percent in the EC and 4.2 percent in
      the US in 2000, and to 4.2 percent in the EC and 3.8 percent in the US in 2005. UNCTAD, 4.3: Average applied
      import tariff rates on non-agricultural and non-fuel products, UNCTAD HANDBOOK OF STATISTICS, available
      at http://www.unctad.org/Templates/Page.asp?intItemID=1890&lang=1. Tariff peaks, however, continue to
       f c pout f xotn r t o ea p , r l a tnd h “i r
        f            s             te .
      a et rdc o epri e s F r xm l Baim i a e t td ce z          ni         a s iminatory [US] measures have led
      to the application of an average tariff of 45.6 percent on the fifteen top Brazilian exports to the U.S. market.
        hs ie rdc e e n 3. e et f h r ln o l xot”
               fe            s ps            4 c            e zi t
      T eeft npout r r et 6 pr n o t Baia t a epr. MONICA HIRST, THE UNITED         s
                                                                         t 7 20)ci US B re o Ba ln
      STATES AND BRAZIL: A LONG ROAD OF UNMET EXPECTATIONS a2 (05,in “ .. a i s n r ia tg            rr          zi
        od ad e c ” R prpe r b t r ln m as n si t DC, vm e 20.
                     ve                pe          e zi
      G os n Sri s. eot r a d yh Baia E bs iWah g n .. oe br 00        y         no           N
                                                     22

defendant could block the creation of a panel or the adoption of its report, or under the
International Court of Justice.101
  l og t
    h
At uh h WT ’m rl azd n j iazd i u ste etyt of s i icn
             e O s oee le ad u c le d pt el n ss m f rs n i t
                               gi           d ii       s e tm           e      e g fa
promise for developing countries, it does not come without costs. The legal procedures and
substantive case law have become increasingly complex and technically demanding. For
example, the Consultative Board to the WTO Director General reported in December 2004 that
 h it8 cs
  er
t fs“1 aes for which reports are adopted, and reports whose adoption is pending, amount
t m r t n 7 0 pgs fui rdne 102 The 2006 WTO panel decision in the European
            a 0
 o oeh 2, 0 ae o j s uec.         rp         ”
Communities-Biotech case alone was 1,087 pages in text, contained 2,187 footnotes, and was
over 2,400 pages when including annexes.103 Most developing countries have not participated at
all in the system. In fact, only 25 of the WTO's 120 non-OECD members have filed a complaint
                                                                       ui h
                                                                         n e O s it
before the WTO, and 62 of 120 did not even file once as a third party dr gt WT ’ fs        r
twelve years.104 We now examine the general challenges posed by the WTO dispute settlement
 yt e e xm n g r l epr ne n w als ei i105
     e      o
ss m bfr ea i n Bais xe ec ad hti bh d t
                       i       z’         i             e    n .
Developing countries vary significantly in terms of the size of their economies and the role of
law and legal institutions in their domestic systems, but they generally face four primary
challenges if they are to participate effectively in the WTO dispute settlement system. These
challenges are: (i) the capacity to organize information concerning trade barriers and
opportunities to challenge them, and a relative lack of legal expertise in WTO law, with its
lengthy and increasingly factually contextualized jurisprudence; (ii) constrained financial
resources, including for the hiring of outside legal counsel to effectively use the WTO legal
system, in light of its costly demands; (iii) fear of political and economic pressure from the
United States and European Communities, undermining their ability to bring WTO claims; and
(iv) their own internal governance systems. We can roughly categorize these challenges as




101
      See PHILLIPE SANDS & PIERRE KLEIN, BOWETT’ LAW OF INTERNATIONAL INSTITUTIONS 356– (2001):
                                               S                                       361
       nt g h e i m n o “osn f on i o h C ’ u s co us n t a compromis,ad hi
         i e qr                    ”
      (o n t r u e et f cneto cute t t IJ j i ii pr ato “
                                            rs    e s rd t n         u                      e
                                                                                        ”n t r
       s o “ sr t n” hr h ae cet h C ’ cm u oy j s co us n t rc 62
              e vi          e e             e e
      ue f r e aos w e t yhv acp dt IJ “o pl r” ui ii pr atoA tl 3(),
                                                    s       s      rd t n      u        ie
      h ot nl l e fh C ’ tu .
       e i           u ”
      t “p oaCas,o t IJ Sa t e s te
102
      See The Future of the WTO: Addressing institutional challenges in the new millennium, Report of the
       Consultative Board to the Director-General Supachai Panitchpakdi 51 (World Trade Organization, 2004).
103
    See Panel Report, European Communities—Measures Affecting the Approval and Marketing of Biotech Products,
WT/DS291/R (Sept. 29, 2006).
104
    These figures are as of Dec. 31, 2007. This represents a considerable improvement of 20 additional non-OECD
     countries filing as third parties since June 2005. Cf. Gregory Shaffer, Developing Country Use of the WTO
                                                                                                  ppro “ O
     Dispute Settlement System: Why it Matters, the Barriers Posed, and its Impact on Bargaining (ae fr WT
       pea oy t 0 cne neC i )
           le
     A pltB d a1” of ec, a o.     r          r
105
                                             f ,T e hlne o WT a : t t e o D vl i C ut
                                              e        l           ags       on     r
      This sub-section draws from Gregory Shaf r“ h C aegs f OL w Sr ei fr ee p g on y
         dp t n :
             ao ” 2
       A ati ,5 World Trade Review 177 (2006).
                                                          23

constraints of legal knowledge, financial endowment, political power, and internal governance,
or, more simply, of law, money, power and governance.106
In order for a WTO member to use the WTO system successfully, it must develop cost-effective
mechanisms to perceive injuries to its trading prospects, identify who is responsible, and
mobilize resources to bring a legal claim or negotiate a favorable settlement. In the domestic
socio-legal literature, these stages of dispute resolution are referred to as naming, blaming and
claiming.107 I t WT cn x am m e sprc ao i t ss m wlb,npr a
               nh   e O ot t                    ’ ti i
                                 e , e br a ipt n n h yt              e e i e i a, l           t
function of its ability to process knowledge of trade injuries, their causes, and their relation to
WTO rights. Hiring lawyers to defend WTO claims is of little help if countries lack cost-
effective mechanisms to identify and prioritize claims in the first place.108 Even where countries
become aware of actionable injuries, this awareness will not be transformed into legal claims if,
based on experience, officials lack confidence that a claim is worth pursuing in light of high
litigation costs, relatively weak remedies and political risks.
Many developing country missions suffer from a lack of national legal expertise in WTO
matters, both within government and in the private bar. Diplomatic postings have generally been
filled by non-lawyers. Often developing country members have no lawyers (or at most one or
two) to address WTO matters, whether in Geneva or in the home capital.109 There are, moreover,
likely to be few (or no) private lawyers in the country knowledgeable about WTO law. WTO
 a a poe o r io l pb c n r t nla ” a o t d i l en a
  w                   a tn           i tn i
l , sopsdt t d i a “ul i e aoa l , hsntr ioaybe t      w             a tn l             ught in



106
   The focus on these issues results from information provided in an ongoing book project of Gregory Shaffer
involving over 100 interviews with key participants in, and observers of, the WTO dispute settlement system in
Geneva, Switzerland, as well as in a number of national capitals. Those interviewed include representatives from
over 40 developed and developing country missions to the WTO, private lawyers and trade association
representatives, over a dozen members of the WTO secretariat, six members of the Advisory Centre on WTO Law,
and multiple representatives from the United Nations Conference on Trade and Development (UNCTAD) and other
Geneva-based organizations.
107
      See William Felstiner et al., The Emergence and Transformation of Disputes: Naming, Blaming and Claiming, 15
       LAW & SOC’ REV. 631 (1980-81).
                   Y

108
                                                                    te n T e di r et n
                                                                     tm ,
      As Hoekman and Kostecki write regarding WTO dispute sel et“ h A v oyC n eo WT L w s           r          O a
        oue ol n h dw sem d ni o efr et o o t usem clco o i r ao.
                   y      e         r       m o
       fcss n o t ‘o nt a ’ i es n f nocm n nt n h ‘pt a ’ o et n fnom t n
                                                             e ,            e      r         l i           f      i ”
       BERNARD HOEKMAN & MICHAEL KOSTECKI, THE POLITICAL ECONOMY OF THE WORLD TRADING SYSTEM: THE
                                5 20)a o o n t “ n ot n o el i h n r ao pol so t
                                            l      i a
       WTO AND BEYOND 94-9 (01 ( s nt g htO e p o t da wt t i om t n rb m ifrh
                                                                  i             h e f          i         e           e
       private sector to co-operate and to create mechanisms through which data on trade... barriers are collected and
        nl e”
           y
       aa zd)     .
109
                                            s n m e s t “ a h n a e hr I ad l S ae ,
                                              a            ad            e y w
      As a representative from a Southeast A i Me brte,I mt ol l yr e . hnla D Um tr        e        e l           ts
         s e s ae e e t r O o m te. S e r o h
              l       ts o h
       a w la m trbfr o e WT cm ies D Ur e t t WT Dsu Ste et ne t d g
                                                    t ”           fs                   p e tm
                                                                           e O i t el n U dra i .             sn n
       Interview with official, in Geneva, Switzerland (Sept. 2002). Of course, there are situations where non-lawyers
         at WT e l ae o e a e et eig i t ,s a t ae i h om r ed f r l
            e           g
       m s r Ol a m trt l d n f cv li t n em a w sh cs wt t fr e ha o Bais
                               ts a            f i t ao a                      e          h e                      z’
       unit for WTO dispute settlement, Roberto Carvalho de Azevêdo (from 2001–       2005). However, this situation is
       likely atypical.
                                                          24

developing countries, although this is changing in some (but by no means most) countries.110
Many developing countries have, as a result, become dependent on education at law schools in
the United States and Europe to develop local talent, provided that they have the funding to
attend these schools and, if they do, that they return home.111
In addition, most developing country officials must work in a foreign language in WTO judicial
  rcei s i i h “ nl hn rai t n 112
         n      h i            o              zi ”
poed g wt nt s A g poeogn ao. Although English, French and Spanish
are the three official languages of the WTO, English predominates, so that even French and
Spanish-speaking delegates are at a linguistic disadvantage.113 Delegates speaking non-official
languages are even worse off. Moreover, the legal culture of the WTO dispute settlement system
poses a greater challenge for lawyers and diplomats raised in a civil law setting where dispute
settlement is less factually contextualized and legal submissions require less parsing of prior
                      o h aat g o h
                          a       i        e O s a u l n e l o p x u s uec
                                                      c ay
court jurisprudence, s t t dp n t t WT ’ f t l adl aycm l j i rdne  gl          e rp
is more time consuming, and thus costly, for them.
A second major challenge that developing countries face is that they have fewer resources to
spend on legal assistance to defend their WTO rights. Their government budgets are constrained,
often compounded by debt obligations, and there are high opportunity costs to investing in WTO
litigation as opposed to other social needs. Compared to larger, wealthier members, developing
countries face much higher relative and absolute costs in WTO litigation. The relative costs of
litigation are much higher for them in relation to the size of their economies and government
budgets. Investing in WTO legal expertise thus makes less sense for them in relation to other

110
      Shaffer has obtained survey data from WTO members regarding the number of lawyers handling WTO matters in
       their Geneva mission and their relevant government departments in the capital. See Marc Busch, Eric Reinhard
       and Gregory Shaffer, Does Legal Capacity Matter? Explaining Patterns of Protectionism in the Shadow of
       WTO Litigation, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1091435. To give just one
       example, a member of the Ministry of Foreign Relations of Paraguay complained that no course in international
       trade law was offered in the country as of June 2006, and that no professors were prepared to offer such a
       course. Discussion with Shaffer, 21 June 2006.
111
      Confirmed in interviews of Shaffer with developing country representatives in Geneva, Switzerland (September
       2002, February and June 2003, July 2005); and at regional WTO dispute settlement workshops in Brazil,
       Indonesia and Kenya in 2006.
112
      Interview of Shaffer with Esperanza Duran, Director of the Agency for International Trade Information and
       Cooperation (AITIC), in Geneva, Switzerland (20 June 2002). AITIC works with least developed organizations
       from Francophone Africa.
113
     s n ret e e e n t e e t :I sin n t cnu i o a o t r
                i p s av le t r g
   A a A gn n r r eti r a s“ iti ad i e osm n t w ifrh t       m             g       t      e anslation in hearings. But
more relevantly, translation of documents may take ten days, so that panelists turn up without time to read them.
This is a disadvantage vis-à-vis documents submitted promptly in English by the defendant. Panelists know where
    r r m n r edd h e h ae o l bu or n h i a r hni p
        g      s e               l e
theia u et a hae w i t yhv n c eaot usadt s s get ad a.u             ,       i          a      c ”Interview cited in
Diana Tussie and Valentina Delich, Dispute settlement between developing countries: Argentina and Chile Price
Bans, in MANAGING THE CHALLENGES OF WTO PARTICIPATION, 45 CASE STUDIES 23, 33 (Peter Gallagher, Patrick
  o       nr t e d. 05. hy l nt h a e f nlh t aeha ns“es n cu e n ay
              w l          ,
L w& A de So es 20)T e a o o t vl o E g s apnl er g:ss os ol t hi l
                                            s e e u                     i               i        i         d c cl
be held in any official language; but, after the initial presentations in Spanish led to a member of the panel yawning
 n dz g f dc i a t no wt t E g s.
         n ,          sn
ad oi ofa eio w sae t s iho nlh  k            c           i ”
                                                          25

budgetary needs. In addition, developing countries can face higher absolute costs to identify and
litigate an individual case unless their representation is partially subsidized, as through use of the
Advisory Centre on WTO Law.114 Since most developing countries participate less frequently in
WTO dispute settlement, they do not benefit from economies of scope. The US and EC, for
example, have respectively participated as a party or third party in around 99% and 85% of WTO
cases that resulted in an adopted decision.115 Because of their prior and ongoing litigation
experience, the US and the EC face fewer start-up costs for an individual case. Put in other
words, the US and the EC can spread the fixed costs of developing internal legal expertise over
more cases than developing countries.
The third major challenge is that developing countries face extra-legal pressure from powerful
countries, undermining the goal of objective trade dispute resolution through law.116 The
powerful can exploit power imbalances and rhetorically rationalize their actions in non-power-
based terms. There may be little that a small developing country can do to counter threats to
withdraw preferential tariff benefits or foreign aid –even food aid –were the country to
challenge a trade measure. Such political tactics can undermine developing country faith in the
efficacy of the legal system.
                                                     h h f c cut ’gnr s b i n
                                                        c f s             r
The fourth challenge is good internal governance, w i a eta on ys ee lt it ad        a a ly
                                            vr ne yt s f c a on y ait o ces
                                               n          e       f
thus the role of law within it. Internal goe ac ss m a et cut ’ b i t acs     r       ly
knowledge and expertise from its private sector, as well as from local lawyers, academics, and
civil society generally. Although this particular challenge is largely external to the operation of
the WTO dispute settlement system itself, our study of Brazil clearly points to the key role of
national governance systems.117
In light of these considerable challenges, understanding the steps taken by Brazil in response to
the legalization and judicialization of the WTO regime is not just of academic interest. As we
      e, r l gvr et n r a et hv r odd o h hlne psd y h
              z’        n              ve o
will seBais oe m n adpi t sc r ae epne t t caegs oe b t  s             e l                      e
WTO legal system through a series of ad hoc but interrelated initiatives that are of interest to
other WTO members. Before we turn to them, however, we provide a statistical overview of

114
      Regarding the ACWL and its role, see Gregory Shaffer, The Challenges of WTO Law, Strategies for Developing
                                                              1 8 20 ) s e s h C ’ e i t
                                                                                l
       Country Adaptation, 5: 2 WORLD TRADE REV. 177–9 (06;a w l a t A WLsw b se a     e                   t
       http://www.acwl.ch/e/index_e.aspx.
115
      This calculation is based on an update (through Dec. 31, 3007) of Tables 6.1 and 7.1 of Gregory Shaffer,
       Defending Interests, supra note __, at 132, 157 (noting 97 percent and 81 percent participation rates as of 17
       January 2003).
116
      Guzman and Simmons find that statistical evidence concerning the selection of defendants suggests that
      developing country selection is more likely to be explained by capacity factors than power-based ones. See
      Andrew Guzman & Beth Simmons, Power Plays and Capacity Constraints: The Selection of Defendants in
                                              5 20) N nt l s hf r n r e
                                                                  he,
      WTO Disputes, 34 J. LEGAL STUD. 57(05. oe e s S a e si e i scni e t t m lr                r     a
                                                                                 f ’ t v w ofm d h s ae       l
      developing countries frequently face political constraints in initiating a WTO complaint.
117
   o a o pr i qatav nl i fh m ot c o t sa o se rt a ai “ o is
          av     it e y s    e
  F r cm a t e un ti aa s o t i pr ne fh f t ,e Cii D v ,Wh Fl ?
                                  a     i cr     sn    s     e
 ee p g on y a ipt nn O d d ao” wt a h l e e o (on
    on      r ti i           u ci    h a     d t m
D vl i C ut Prc ao iWT A j i t n ( i Sr BogtB r e) file).
                                                           26

 r l epr nen r eig i i h
  z’        i          a t ao             e O
Bais xe ec i t d li t n nt WT , followed in Part III by an examination of the
mechanisms Brazil has used in particular cases as a complainant, respondent and third party.


2.2        Brazil in WTO Dispute Settlement: The Catalyzing Effects of the Embraer Case
During the Uruguay Round and throughout most of the GATT period, Brazil supported a
stronger dispute settlement system, both to help to defend itself against US unilateralism and to
                                                n h od o Ba l dl ao n 98 “ e
                                                     e              z’ e i
secure better access for its exports generally. I t w rs f r is e gt ni 18, t                  h
 i u el n poeue r e m ot t n n ga a fh A T n
  s e tm                      s e       y
d pt ste et rcdr a avr i pr n adi er pro t G T ad… t y
                                                 a         t l t           e                  he
play a decisive role in securing reciprocity and a proper balance of rights and obligations
 e e cn at g a i ”
   w          r i       ts 118                      a oe cv,rsct i
                                                             i
bten ot cn pre. Brazil supported “ m rat epoeu r l role for the GATT      oa
             119
Secretariat,” and special and differential treatment procedures and remedies for developing
countries.120 However, since developing countries generally were unsuccessful in these efforts,121
Brazil would have to develop strategies of its own.
Brazil became one of the first users of the WTO dispute settlement system both as a complainant
and respondent. In January and April 1995, Venezuela and Brazil brought complaints against the
United States regarding its discriminatory requirements for domestic and foreign reformulated
and conventional gasoline, resulting in the adoption of an Appellate Body decision in May
1996.122 Brazil also became a respondent i t WT ’ fs ya in a Philippine complaint
                                             nh  e O s it er  r

118
      Brazil, Communication from Brazil at the Negotiating Group on Dispute Settlement, MTN.GNG/NG13/W/24,
       available at http://www.worldtradelaw.net/history/urdsu/w24.pdf.
119
      See HUDEC, supra note __, at 42 (also citing similar proposals made in 1966).
120
      Brazil stressed, in particular, that a system of remedies based on retaliation favors large developed countries
        xr s g a t o e n h eo aosh l o h 99 A T e r sfr xm l “ ]e r ln
           ci          k          . e
       ee in m re pw rI t ngtt n t te t t 17 G T r om ,o ea p ,[h Baia
                                               ii       a d        e               f                e t        zi
        e gt n a e rpsl f ] r ger
          e i bd                    s o …so
       dl ao t l pooa [ r t n remedies for developing country complaints, such as collective
        e lt n r oe a ae.
         tii                           ”
       r aao o m nydm gs See HUDEC, supra note __, at 42 (also citing similar proposals made in 1966).
       These issues have again been raised by developing countries (although not Brazil) in new proposals in the
       current review of the WTO dispute settlement understanding (DSU). For examples of more recent proposals for
       collective retaliation, see TN/DS/W/15 –   Proposal by the African Group (2002); TN/DS/W/17 –  Proposal by the
       LDC Group (2002); TN/DS/W/19 –Proposal by Cuba, Honduras, India, Indonesia, Malaysia, Pakistan, Sri
       Lanka, Tanzania and Zimbabwe (2002); TN/DS/W/42 –Communication from Kenya (2003). As for proposals
       for money damages, see TN/DS/W/9 –Communication from Ecuador (2002); TN/DS/W/33 –Proposal by
       Ecuador (2003); and TN/DS/W/17 –Proposal by the LDC Group (2002). For a detailed analysis of such
       proposals, regarding the perspective of developing countries, see A. AMARAL ET AL., A REFORMA DO SISTEMA
       DE SOLUÇÃO DE CONTROVÉRSIAS DA OMC E OS PAÍSES EM DESENVOLVIMENTO (2006).

121
    See Hakan Nordstrom and Gregory Shaffer, Access to Justice in the WTO: The Case for a Small Claims
Procedure, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=983586 (2008) (noting the limited use of
the GATT Decision of 5 April 1966 providing for accelerated procedures for developing country complainants
under Article XXIII (BISD 14S/18).
122
    The case involved a prototypical national treatment complaint (GATT article III) and an article XX defense on
     alleged environmental grounds. The Appellate Body upheld the result but reversed the panel in its reasoning.
     See Report of the Panel, United States –Standards for Reformulated and Conventional Gasoline, WT/DS2/R,
                                                        27

against Brazilian measures affecting the import of desiccated coconut. The case again went
through the appellate process and Brazil again emerged victorious, although on technical
grounds.123 While Bais igt napoce i t s tocss i ntno es n i n
                      z’ t ao                        e
                    r l li i prahs n h e w ae d o i l i ic t          d        v v g fa
coordination with the private sector, and were largely similar to those used under the GATT,
  r l oe n f i
    z’       i       a s n t u ky a ed
                              ir       c       n
BaisF r g A f r Mi syqi l gi experience under the new WTO Dispute
Settlement Understanding (DSU), involving tighter timelines and appellate review.
It was at the end of 1996 and the start of 1997 that Brazil faced a controversy that was to receive
widespread attention in Brazilian internal politics, the private sector and the media and that was
 o hne h oe et prah o
              e       n    ’                     O i u el n h ae a ruh b
t cag t gvrm n sapoc t WT d pt ste etT ecs w sbogt y  s e tm .
  aaa ocr n r l us i i f h r ln i r t aua u r m r ,n
                n g z’              d ao           e zi r a
C nd cne i Baissbi zt no t Baia a c f m nf t e E bar i                          cr            e
                       o f m r ’ aai i l o br e T e r ln oe et
                        n           es          a v,
response to the petiti o E bar C nd nr a B m a i . h Baia gvrm n   dr            zi          n
soon followed suit with its own case against Canada on behalf of Embraer, resulting in a
complex series of decisions in which both Brazil and Canada were found to have violated




       29 January 1996; and Report of the Appellate Body, United States –Standards for Reformulated and
       Conventional Gasoline, WT/DS2/AB/R, 29 April 1996.
123
      Report of the Panel, Brazil –Measures Affecting Desiccated Coconut WT/DS22/R, 17 October 1996; Report of
       the Appellate Body, Brazil –Measures Affecting Desiccated Coconut, WT/DS22/AB/R, 21 February 1997
       (finding that that the Brazilian measures were not covered by the new WTO regime, but rather by the former
       GATT).
                                                         28

provisions of the WTO agreement on subsidies.124 Brazilian media coverage of these parallel
cases brought WTO proceedings to the broader Brazilian public for the first time.125
  h caeg aa sBa l sbi z i o E ba w s y blay m ot to Ba l
          l        n      z’
T e hlne gi t r is us i t n f m r r a sm o cl i pr n fr r is
                                   d ao              e            i l         a         z’
identity as an emerging economic power. Not only is Embraer among the largest companies and
 a et xot s n r l m r ’ cnm c ucs upr r l lm h i cn
  r            e         z,        es
l gs epr r i Bai E bar eoo i scesspot Baisc i t t t a            s z’ a            a
compete in international markets in high tech and high value-added sectors –in this case, jet
aircraft for commercial, corporate and military use. The rise of Embraer exemplified, in the
                                     w o a api e n 07 o eo e r l Mi s r f
                                                   nd
words of Roberto Mangabeira Unger ( h w s po t i 20 t bcm Bais n t o        z’       ie
                         sut n i h h relatively more backward country may be able to
                          t i n c
Long-Term Planning), a i ao “ w i a
 n r n i s f ui s i h h r avl oe dacd n seii s
   e       t n           n          c     li y
et … i ol e o bs esnw i a e t e m r avne oe pc le,that is, one            az ”
in which Brazil (much less economically developed than Canada in per capita terms) was not
ol “ si n d t c, bt c aycompeted.126 Embraer was created as a government
    y n ri          sn ”
 n i tk g ia e u at l              ul
owned enterprise in 1969, aiming to become the domestic supplier to the Brazilian Air Force
 ui Ba l m la rl btt a pi te in
    n       z’ ir e                      vi
dr g r is it y u , u iw s r azd December 1994 as part of the liberalization




124
      The Canada–   Brazil, Bombardier–  Embraer cases were complex, involving the full range of WTO procedures,
       including requests and authorizations for retaliation on account of non-compliance with the ruling. The first
       complaint was filed in 1996 and the most recent decision was issued in 2003, although the case could flare up
       again. The main decisions ensuing from the initial complaints (WT/DS46 and WT/DS70) were: WT/DS46,
       Brazil –Export Financing Programme for Aircraft –Report of the Panel, 14 April 1999; WT/DS46/AB/R,
       Brazil –Export Financing Programme for Aircraft – Report of the Appellate Body, 2 August 1999;
       WT/DS46/RW, Brazil –Export Financing Programme for Aircraft, Recourse by Canada to Article 21.5 of the
       DSU –Report of the Panel, 9 May 2000; WT/DS46/ARB, Brazil –Export Financing Programme for Aircraft,
       Recourse to Arbitration by Brazil under Article 22.6 of the DSU and Article 4.11 of the SCM Agreement –
       Decision by the Arbitrators, 28 August 2000; WT/DS46/AB/R, Brazil –Export Financing Programme for
       Aircraft, Recourse by Canada to Article 21.5 of the DSU –Report of the Appellate Body, 21 July 2001;
       WT/DS46/RW/2, Brazil –Export Financing Programme for Aircraft, Second Recourse by Canada to Article
       21.5 of the DSU –   Report of the Panel, 26 July 2001; WT/DS70/R, Canada –   Measures Affecting the Export of
       Civilian Aircraft –Report of the Panel, 14 April 1999; WT/DS70/AB/R, Canada –Measures Affecting the
       Export of Civilian Aircraft –AB-1999-2 –Report of the Appellate Body, 2 August 1999; WT/DS70/RW,
       Canada –   Measures Affecting the Export of Civilian Aircraft –Recourse by Brazil to Article 21.5 of the DSU –
       Report of the Panel, 9 May 2000; WT/DS70/AB/RW, Canada –Measures Affecting the Export of Civilian
       Aircraft – Recourse by Brazil to Article 21.5 of the DSU – AB-2000-4 –  Report of the Appellate Body, 21 July
       2000. The following decisions for complaint WT/DS222 are also related to this dispute, WT/DS222/R, Canada
       –Export Credits and Loan Guarantees for Regional Aircraft –Report of the Panel, 22 January 2002;
       WT/DS222/ARB, Canada –        Export Credits and Loan Guarantees for Regional Aircraft –  Recourse by Canada
       to Article 22.6 of the DSU and Article 4.11 of the SCM Agreement –Decision by the Arbitrator, 17 February
       2003.
125
                  X ME “                                            , 4 ee br 02 F L A E Ã
      See, e.g., E A ,OMC autoriza sanções do Brasil contra o Canadá”2 D cm e 20, O H D S O
        A L ,E ba f e dc ã d O
                      e sj    s             ot C nd”2 D cm e 20.
                                               r
       P U O “ m r reta ei o a MCcn a aaá,3 ee br 02
126
     ne pt ow r t r o “ li dat e i w i h a e frh ed o al i er e e m
              s       d e            e te
   U gr u fr a ahoy fr av avn g”n h h e ruso t ne fr f x lt d r i e
                                                   a           c       g          e             eb a g
that permits countries such as Brazil to develop innovative policies and practices, and thus do not preclude
protection used for these purposes. Roberto Mangabeira Unger, Free Trade Reimagined: The World Division of
Labor and the Method of Economics (2007), at 114-115.
                                                          29

  f r l eoo y f rh on ys e r o e or i oe et n s n o w r ’
      z’                 t e         r
o Bais cnm a e t cut ’ r unt dm c t gvrm n adioe f ol s
                                             t          ac n , d
                                                    127
leading sellers of small and mid-size jet aircraft.
The Embraer case was followed by an even more controversial one brought against Brazil that
rallied civil society organizations in Brazil and around the world, once more generating
significant Brazilian media coverage. In 2000, the United States challenged a Brazilian patent
law provision permitting for compulsory licensing at a time when civil society organizations
were calling for the provision of lower cost drugs (such as through compulsory licensing) to
respond to the HIV pandemic and other public health concerns. The US complaint rallied
domestic and international NGOs behind the Brazilian government.128 Until these cases, the
government had been developing ad hoc, case-by-case strategies to handle WTO cases, and
Brazilian industry and civil society had not devoted much attention to the substance of WTO
rules.
After being placed on the defensive in these cases, Brazil developed new dispute settlement
strategies (examined in Parts III and IV), which led to its most highly touted successes in WTO
              rub , aaa n h n e te’ hlne o r ln n si n
                    y           s       e t          t
litigation. A gal C nd’ adt U idSa s caegst Baia i uta ad     l              zi d r l
public health policies in the Embraer and patent cases spurred the Brazilian government to
devote greater resources to making use of the WTO dispute settlement system offensively. In
total, Brazil participated in 86 of the 369 cases filed before the WTO through December 31,
2007, as complainant, respondent or third party, constituting a 23% participation rate.129
Similarly, it has been a complainant in 11, a respondent in 3, and a third party in 35 of the 136
cases that have resulted in an adopted WTO report, constituting about a 36% participation rate.130
127
       m r ’ hr w r itie n h ã
             es e           e r sd           e
      E bar sa s e fslt i t SoPaulo stock market in 2000 and are now also quoted on the New
      York stock exchange. Following its privatization, Embraer became Bais    z’
                                                                             r l largest exporter in 1999 and 2001,
      the second largest in 2002 (after Petrobrás) and the third in 2004 (after Petrobrás and Companhia Vale do Rio
      Doce). See Embraer website, http://www.embraer.com.br/portugues/content/empresa/profile.asp (accessed
      September 2005) and Agência Brasil, Petrobras é a maior exportadora do país, available at
                                                                                              120
      http://www.idbrasil.gov.br/noticias/News_Item.2004-01-27.3216. In the market for 30– seat commercial jet
      aircraft, its share of the global market has risen. Transportation consultant Ray Jawarowski, of Forecast
      International estimated that over the next decade, Embraer will produce 1426 regional jets, resulting in a 38.8
      percent global share of the regional jet market, while Bombardier will make 1210, constituting a 32.5 percent
      share. Raymond Jaworowski, Regionals Faring Better Than the Majors, press release, FINANCIAL POST,
      September 1, 2004.
128
        See, e.g., Tina Rosenberg, Look at Brazil, THE NEW YORK TIMES, available at
       <http://www.nytimes.com/library/magazine/home/20010128mag-aids.html>, (January 28th, 2001), noting the
       relatively successful Brazilian strategy to fight the AIDS epidemic, compared to what has transpired in other
       developing countries).
129
              This      information         was        obtained        from         the       WTO     website
       (http://www.wto.org/english/thewto_e/countries_e/brazil_e.htm, February 2008), The Ministry of Foreign
       Affairs’ s   w bi
                      ese t       (t :w wm e o. / r ge/ i s r /t ssc t
                                     t/
                                  h p /w .r gv r ot us n t i si _er aria/cgc/contenciosos.doc,
                                                   . bp u           m ie o io           e
       September 2007), and the website at http://www.worldtradelaw.net (accessed February 2008)..
130
      Some of the cases in which Brazil is involved were still in consultations or before a panel at the beginning of
       2008. See details in Annex II. For the adopted reports, see http://www.worldtradelaw.net database (accessed
       February 2008). We do not include article 21.5 compliance decisions in our calculations.
                                                           30

Table 1 depicts Brazilian participation as a complainant and respondent on an annual basis,
based on the date that the complaint was filed.


      Table 1: Brazil as a Complainant and Respondent in WTO Cases by Year (1995-2007)*


                        8
                        7
                        6
                        5
                        4                                                                         Respondent
                        3                                                                         Complainant
                        2
                        1
                        0
                            1995 1996 1997 1998 1999 2000 2001 2002 2005 2006 2007


Source: Authors, as per the WTO database (January 2008). See also Annex II.
* This chart notes the date of filing of the case, and not of the adoption of the ruling by the WTO Dispute Settlement
Body, which typically occurs about a year or year and a half after filing, depending on the complexity of the case
and whether the panel decision was appealed.


Following the Embraer case, Brazil filed a flurry of complaints from 2000 to 2002, and was
actually the most active WTO complainant in 2001. Many of these cases were particularly
factually and legally complex, such as the US cotton and the EC sugar cases examined in Part
III. Although Table 1 indicates that Brazil was less active between 2003 and 2007, it was in fact
litigating and bargaining over compliance in the cases that it had filed earlier. In addition, Brazil
became increasingly engaged in the Doha Round of negotiations, which appears to have caused a
decline in overall WTO dispute settlement activity during these years.131
Overall, Brazil has been the fourth most active complainant after the US, European Communities
and Canada s c t WT ’c ao.132 Brazil has largely prevailed in each of its complaints, ,
              n e Os r tn
             i eh               ei


131
      In the last three years, Brazil has been a party in three new WTO cases, two of them as a respondent and one as a
       complainant against US agricultural subsidies. WT/DS332, Brazil –Measures Affecting Imports of Retreaded
       Tyres (Complainant: EC) and WT/DS355; Brazil –          Anti-Dumping Measures on Imports of Certain Resins from
       Argentina (Complainant: Argentina); Request for Consultations by Brazil, United States Domestic Support and
       Export Credit Guarantees for Agricultural Products, WT/DS365/1 (July 11, 2007).. See Annex II for details.
132
      A large gap separated Canada and Brazil from the two most active members, the US and the EC (US, 88 cases as
       complainant, and 258 cases as either a party or third party; EC 76 cases as complainant, and 214 cases as either
       a party or third party). See the World Trade Law database, available for registered users at
       http://www.worldtradelaw.net (accessed January 2008).
                                                           31

a point highlighted by the Foreign Affairs Ministry.133 Of the 23 complaints filed by Brazil, 10
were settled during consultations, and 11 resulted in panel decisions, 10 of which were appealed,
                                                                         O Ba l o p i s 21
and one (against US agricultural subsidies) was ongoing in 2008. f r iscm ln ,  z’          at
involved specific sectors, the most important being agricultural products (10), steel or iron
products (5) and vehicles (aircraft and bus, 4), and two were of a more systemic nature.134 Brazil
was also a respondent in 14 cases, but only 4 of these resulted in the establishment of a panel, of
which Brazil lost two, at least in part.135 Annex II lists all cases in which Brazil has participated
in WTO dispute settlement system, indicating the status of the case, the products covered, the
industry affected, and any private law firms used.
  r l ue f
    z’
Bais s o the dispute settlement system roughly reflected its trade flows, and thus primarily
 n l d ae aa st
  vv
i o e css gi th WT ’ m s pw r l e br t U adt E . r is a
                     n e O s ot o e u m m e ,h S n h C Ba l m i
                                                f       s e            e          z’       n
                                                 i eh
                                                  n e O s ei i i 19 were the EU
                                                                 nn
trading partners in terms of imports and exports s c t WT ’bg n gn 95
and US, followed by Argentina, as depicted in the bar charts in Annex III. In rough
                               e et f r l cm ln w re
                                c          z’        at
correspondence, around 39 pr n o Bais o p i s e against the US, and around 26

133
      In the 23 cases where Brazil acted as a complainant, 11 cases resulted in an adopted ruling, and all of these
       rulings were in favor of Brazil. The Brazilian government maintains that it obtained positive results in 17 of
                      h     n t f oe n f i’information may be found in its public report available at
                             ir
       these cases. T eMi syo F r g A f r i       as
       http://www.mre.gov.br/portugues/ministerio/sitios_secretaria/cgc/contenciosos.doc (accessed January 2008).
134
      Agricultural products: WT/DS 269, EC –Customs classification of frozen boneless chicken; WT/DS267,
       United States –Subsidies on upland Cotton; WT/DS266, EC –Export subsidies on sugar; WT/DS250, United
       States –Equalizing excise tax imposed by Florida on processed orange and grapefruit Products; WT/DS241,
       Argentina –Definitive Anti-Dumping Duties on Poultry from Brazil; WT/DS209, EC –Measures affecting
       soluble coffee; WT/DS154, EC –Measures affecting differential and favorable treatment of coffee; WT/DS69,
       EC –Measures affecting importation of certain poultry products. Steel products: WT/DS259, United States –
       Definitive safeguard measures on imports of certain steel products; WT/DS219, EC –Anti-dumping duties on
       malleable cast iron tube or pipe fittings from Brazil; WT/DS218, United States –Countervailing duties on
       certain carbon steel products from Brazil; WT/DS208, Turkey –Anti-dumping duty on steel and iron pipe
       fittings. Vehicles: WT/DS222, Canada –Export credits & loan guarantees for regional aircraft; WT/DS112,
       Peru –   Countervailing duty investigation against imports of buses from Brazil; WT/DS71, Canada –     Measures
       affecting the export of civilian aircraft; WT/DS70, Canada –   Measures affecting the export of civilian aircraft.
       Cases relating to other economic sectors: WT/DS216, Mexico –Provisional anti-dumping measure on
       electric transformers; WT/DS190, Argentina –Transitional safeguard measures on certain imports of woven
       fabrics of cotton and cotton mixtures originating in Brazil; WT/DS4, United States – Standards for
       reformulated and conventional gasoline. Systemic Cases: See WT/DS239, United States –Certain Measures
       Regarding Anti-Dumping Methodology; WT/DS217, United States –          Continued Dumping & Subsidy Offset Act
       of 2000 (although this directly implicated the steel industry). The third case, WT/DS224, United States –US
       Patents Code, was a tit-for-tat maneuver in response to a US challenge to the compulsory licensing provisions
        n r l hr cu cl a n l i h h o o p i s e rpe s a f el n s
               z’       m       i       e w
       i Baispa aeta pt ta ,nw i bt cm ln w r dopda pr o aste eta
                                                       c      h        at       e                t           tm ,
       discussed below. For details, see Annex II (        “Brazil in the WTO Dispute Settlement System – As
         o p i t.
               aa”
       C m lnn )
135
      In the 14 cases where Brazil was a respondent, it was found to be in non-compliance in only two of the cases (the
       first Canada-Aircraft case and the tyres case brought by the EC, discussed in Part IV). Most of these cases (10)
       concerned Brazilian regulatory measures affecting specific product sectors, as opposed to systemic cases.
       Consultations under the case WT/DS355, Anti-Dumping Measures on Imports of Certain Resins from Argentina
       started in December 2006 (the establishment of a panel was not requested until end of March 2007).
                                                           32

percent against the EU, constituting, in total, 65 percent of its complaints. Table 2 contains a
breakdown by county of WTO cases where Brazil was a claimant or a respondent.


                          Table 2: Brazil WTO Cases by Country (1995–2007)

                    WTO            Brazilian complaints               Complaints against
                   Member                 (country)                    Brazil (country)
                  US               9                               4
                  EC               6                               4
                  Canada           3                               1
                  Other            2 Argentina                     1 Argentina
                                   1 Mexico                        1 India
                                   1 Peru                          1 Japan
                                   1 Turkey                        1 Sri Lanka
                                                                   1 Philippines

Source: Authors, based on the WTO database at http://docsonline.wto.org (accessed January 2008). See also Annex
II.


WTO members can also participate as a third party in WTO cases, which they primarily do when
they have only a systemic interest in a dispute, although some smaller and poorer countries may
do so because they lack the resources to bring a complaint on their own. Brazil has been the
seventh most active participant as a third party in WTO cases, filing 49 times, following Japan
(88), the EC (79), US (71), Canada (64), China (61), and India (50).136 Most of the cases in
which Brazil requested third party rights related to agricultural and steel products (around 21 of
                 rl i
                   f cn r l n e i l o pti n xot
                                z’ c a n y
the 49 cases), e et g Baisi r s g cm et ead epr            iv               -oriented agribusiness
sector.137 Table 3 bek dw Baisins s t r pr o a anabs , and Annex IV
                      a             z’ l g             i
                    r s o n r l fi a ah d a y n n nul ai      t                   s
(in order to provide a complete picture) lists the cases in which Brazil was a complainant and
participated as a third party in a parallel case (or filed separately as a third party in parallel
cases), which is standard practice until cases are consolidated.138


136
                                                        07 e ah
      These figures are as of December 31, 20. Se ec Me br pg a t WT w bi           ’
                                                                              m e s ae t h            e       O ese  t
                                                                                         h Me br i l m n i
                                                                                          a
      (http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm) for details of t t m e s no e etn’ vv
      disputes as a third party. China has been proportionally more active as a third party since it joined in December
      2001.
137
    Brazil is listed as a third party 7 times in the 2002 parallel complaints against US safeguard measures on steel
imports, inflating the number of third party participation in cases involving the steel industry. [to break down
between agriculture and steel]
138
    In 13 of the cases in which Brazil participated as a third party, it filed its own separate parallel complaint. In
     addition, Brazil filed separately as a third party in [__] parallel cases. If one does not count these parallel cases
     multiple times, then Brazil acted solely as a third party in [35] distinct cases. Four of these parallel cases gave
     rise to [separate] adopted decisions. Members normally participate as a third party in cases filed in parallel to
                                                           33



               Table 3: Brazil as Third Party in WTO Cases by Year (1995-2007)139

                  12
                  10
                   8
                   6
                   4
                   2
                   0
                       1996 1997    1998 1999 2000 2001 2002 2003            2004 2005 2006 2007


Source: Authors, based on Annex II (As Third Party) and information accessed on the WTO database at
http://docsonline.wto.org (January 2008).
The cases are apportioned in the chart according to the year Brazil filed its request to participate as a third party.


                  n xm n i f r l seic xe ecs s o p i t e odn ad
                           ao          z’        f        i
We now turn to a ea i t no Bais pc iepr ne a cm lnn r pnet n              aa, s
third party in WTO cases, assessing the various mechanisms and strategies used by Brazil to
enhance its legal capacity in these cases, before turning in Part IV to a broader assessment of
  hti bh d r l active engagement and highly touted success.
       e
w als ei Bais n     z’


      T E R ZLA P R A H N R C I E B A I’ A D I G F
  III. H B A I I NA P O C I P A T C : R Z LSH N L N O WTO
                           DISPUTES

      h r w n re t b i n r ao r h t r cs,n u n h e l n a u a m n sd
       e                     a f       i o e h’                  cdg e g
      t io ni odrootni om t nf m t o e s aei l i t l a adf t l ru etue.           ca g       s
      The four cases resulting is separate adopted decisions are: WT/DS286, WT/DS244, WT/DS234, and
      WT/DS212. Annexes II and IV provide further details.
139
    The list of cases in Annex II, and their compiling in Table 3, reflects information found in documents accessible
to the public that we checked in interviews with Brazilian foreign ministry representatives. The various reports
contained inconsistencies regarding the number of third party requests by Brazil. For example, the WTO web page
for Brazil (http://www.wto.org/english/thewto_e/countries_e/brazil_e.htm, accessed January 2008) lists 48 cases in
which Brazil requested third party rights. This calculation includes participation in the WT/DS89 –    United States –
anti-dumping duties on imports of color television receivers from Korea, but no evidence of participation in
     /S 9 a fud yh u os h WT e se l de ntos e Ba l prc ao i
                            e h .                         t s
WTD 8 w son b t at r T e Ow b i a o os o cni r r is a ipt nn                    d      z’ ti i
WT/DS27/RW/ECU, EC –        Regime for the Importation, Sale and Distribution of Bananas, nor the request for
consultations in WT/DS324, United States –     Provisional Anti-Dumping Measures on Shrimp from Thailand, though
documents of such requests may be found on the WTO database (accessed January 2008). In contrast, the Brazilian
Foreign Ministry lists 17 cases in which Brazil was third party
(http://www.mre.gov.br/portugues/ministerio/sitios_secretaria/cgc/contenciosos.doc, accessed January 2008). In this
 n m lei, ad Ba l prc ao a t r pr in
  c      e si               z’ ti i                 i       t
i o p tlt tds r is a ipt n sh d a y the case WT/DS56, Argentina –                                 measures affecting
imports of footwear, textiles, apparel and other items. However, no evidence of such participation was found. Our
calculation of Brazilian participation as a third party in 49 cases reflects what we were able to verify.
                                                         34

  l og r l
    h          z’
At uhBais relatively active use of the WTO dispute settlement system has led to some
institutionalization of its handling of cases, the strategy pursued in each case has varied,
including as a function of whether Brazil was a complainant, respondent or third party, which in
turn reflected whether the private sector was able (or willing) to fund a foreign or Brazilian law
firm to assist the Dispute Settlement Unit at the Ministry of Foreign Affairs in its preparation of
    z’
  r l oio n e l um s o .
              tn           g          s n 140
Baispsi sadl a sb i i s When Brazil was a complainant, the government
relied on private sector-funded legal assistance increasingly over time, as we now examine.


3.1        Brazil as Complainant
Following Bais  z’
              r l complaints against the US cotton and EC sugar subsidy regimes in 2002,
commentators have highlighted how a developing country, like Brazil, can make effective use of
the WTO legal system. Yet it took a while for Brazil, one of the largest developing countries, to
build the confidence and capacity to bring these cases. Brazil approached its first cases before the
more judicialized WTO dispute settlement system much as it had approached GATT cases,
changing neither the structure of its mission in Geneva nor that of its Ministry of Foreign Affairs.
It had no specialized bureaucratic unit to work on dispute settlement issues, and had developed
no reflex to seek complementary assistance from the private sector to fund private law firm
support. Its first case as a complainant, the US – Reformulated Gasoline case (WT/DS4) in 1995
involved different US regulatory requirements for foreign and domestic reformulated gasoline.
  h S e li s f c d n f r l a et xot s h te
             g ao          f e
T e U r u t n a et oe o Baisl gs epr r t s t   z’ r                e , e a -owned company
Petrobras, so its initiation was easy to justify. Petrobras had hired a Washington DC-based law
firm (Mudge Rose) to advise it on the US regulations and its WTO options, and to work with
Brazilian diplomats in the economic department of the Ministry of Foreign Affairs, and the
Brazilian mission based in Geneva in the preparation of written submissions and
communications to the panel and Appellate Body, including statements for the oral hearings.141
Even though Petrobras funded the preparation of the case, its attorneys had to do much less than
those funded by Embraer in the aircraft litigation and by the Brazilian cotton and sugar trade
associations in the US—Cotton and EC—Sugar cases.
The Embraer case was a landmark one in terms of the intensity with which Brazilian officials
worked with law firms hired by the private sector in a public–    private partnership for preparing
written submissions and oral pleadings before WTO panels and the Appellate Body. Embraer,
with its large international market share for medium-size civil aircraft, represented a crown jewel
 o Ba l i si o c.t
        z’ d r l i s
fr r is nuta ply I experience in international markets and its close ties with the
government favored the formation of a public–    private partnership between it and the Brazilian
government, both as respondent and complainant in the WTO litigation.142 Embraer had the
140
      For a description of the creation of the Dispute Settlement Unit in 2001, see Part IV.
141
      According to interviews with Brazilian diplomats, in Brasília (April 2006) and Geneva (June 2006), who worked
       at the time on the case.
142
      Embraer was a state-owned company until 1994. Former Brazilian Foreign Minister and WTO ambassador
        a pe bcm a e br ft or f i c ri20 (m r ’ 01 nul eot
             i                     s    d       eo
       L m r a ea e m m e o i B a o Dr t sn 01 E bar 20 A naR pr.   es                    )
                                                         35

                                              e lxe i o e od o aaa e lhlne
                                               g      te       s
financial capacity to hire US and Canadian l aeprs t r pn t C nd’l acaeg      sg l
                                                                          143
against Brazil, including by building a parallel WTO case against Canada.
Embraer engaged three law firms (Graham & James and Powell Goldstein in the US, and Strathy
& Henderson in Canada) to help build different components of the case and prepare the legal
submissions.144 Their work was overseen by a diplomat Roberto Carvalho de Azevêdo, who was
in turn supervised by the Ambassador at the Geneva Mission, Celso Lafer, who is also a
professor of law at the premier University of São Paulo. It was arguably this highly technical,
time-demanding experience that spurred much greater public–    private coordination initiatives in
                        oe et creation of a specialized Dispute Settlement Unit in its capital
                             n
Brazil, including the gvrm n s     ’
                                                                                  r l
                                                                                    z’
Brasília, the internship program for private Brazilian attorneys organized at BaisGeneva
mission, and many of the dispute settlement research groups and networks organized in major
cities in Brazil, forming a trade law epistemic community that we examine in Part IV.
By the time Brazil brought the cotton and sugar complaints in September 2002, respectively
against the US and EU, it had developed significant dispute settlement experience, but these two
cases were considerably more factually intensive than anything it had prepared before. Without
 h r a et ’ n ii n upr ts n kl h Ba l ol ae ruh the
  e v e o s iav                           ,
t pi t sc r i tt eadspotii ul e t t r iw u hv bogt   i y a           z      d
complaints. The cases gained Brazil acclaim as a leading voice against US and EC trade policies
in the WTO and helped focus considerable international political and media attention on the
adverse impacts of US and European agricultural subsidy programs on agriculture in developing
countries. The cases created leverage in the Doha Round negotiations, and provided tools for
opponents of these subsidies in US and EU internal political debates. In this way, they could
contribute to the reduction of European and US agricultural subsidies (and the elimination of
export subsidies) over time.145 The cases exemplify how a country can work with its private
sector and with lawyers hired by it to bring, and prevail in, an extremely complex and
strategically important WTO case, with significant political implications.
The major challenge in the US—Cotton case was to gather the factual evidence and economic
and legal expertise required. The government could not do so on its own, and the Brazilian
cotton sector consisted of many producers, of varying size, with limited capacity to address
international trade issues. Therefore, the producers had to be convinced to coordinate and pool
their resources through a trade association in order to help pay for outside legal and economic
consultants. A former secretary of agriculture policy in the Brazilian Ministry of Agriculture,
Pedro de Camargo Neto, played an important role in the case, working as a consultant to the
cotton sector, among others, after he left the government. Private attorneys assured the producers
and the government of the legal merits of the case, and together they were able to collect the



143
                                                                                                     aaas
      The law firms assisted Brazil in its complaint against Canada (WT/DS70) and in its defense in C nd’
       complaint against Brazil (WT/DS46).
144
    The international trade practice group in Powell Goldstein would later join Sidley & Austin, which has
represented Brazil in many cases, as indicated in Annex II.
145
    Add cite to Hong Kong ministerial proposal
                                                            36

financial resources required.146 With this funding, the government hired a US law firm (Sidley &
Austin) to prepare the legal submissions and to attend the hearings and help it respond to
questions posed by the panel and the Appellate Body.147 Daniel Sumner, a US economist at the
University of California at Davis who had previously worked for the US Department of
Agriculture, worked with Sidley & Austin to provide the economic analysis and explanations of
                                                                                   u nr study
the formula that the US government used to subsidize its cotton farmers. Mr. S m e s     ’
                                                                                148
showed the severe impact of US subsidies on international agricultural trade. Although the
case was extremely costly, the public-private coordination worked. The bulk of the work was
done by the US law firm and Mr Sumner, this time overseen by the Dispute Settlement Unit in
Brasília, now that Brazil had a dedicated group in its capital.149
In the EC—Sugar case, Sidley & Austin was again hired as the external law firm, but it worked
this time with the Brazilian economic consulting firm DATAGRO.150 It was the first time that a
Brazilian consulting firm was used for a WTO dispute. The law firm and economic consultants
again worked for the government, but were funded by the private sector, this time by the São
Paulo-based sugar cane association UNICA. As the cotton association, UNICA was assisted by
former government officials, once again by Mr de Camargo Neto, as well as by the economist
Elisabeth Serodio, who alternated working for UNICA and in government agriculture-related




146
      The actual amount of the costs may have exceeded US$ 2 million USD. Interview, 20 July 2005 (noting a figure
       of US$ 2 million). See also Elizabeth Becker, Lawmakers Voice Doom and Gloom on W.T.O. Ruling, NEW
                                                  “ e ig i a a ed ot 1 ii ) n Ba ln e sae
                                                   t t ao             r
       YORK TIMES, April 28, 2004, at C1, 7 ( h li t nhs l aycs$ m lo” O e r ia nw ppr   ln .            zi
       reported, at one point, that funding of the law firm was collected from: (i) the cotton producers, in the amount of
       R$300 000 (US$ 130 000); (ii) the Export Promotion Agency (Agência de Promoção de Exportações), in the
       amount of R$200 000 (US$ 86 000); and (iii) amounts collected from a lottery sale, in the amount of R$1.2
       million (US$ 522 000). Produtores de algodão fazem rifa para bancar painel na OMC, ESTADO DE SÃO PAULO,
       September 18, 2003, available at http://www.comexnet.com.br/noticom.asp?paNumero=4215.
147
       i e’t
         l      a a cm f
      Sd ysemhd o e rmP w lG l tn h h a hl d o igtt E bar ae
                             o o e o s i w i hd e e t li eh m r cs.
                                       l de        c         p      ta e            e
148
       u nr s d hw d h wt u t us i t S w u ae h ped about 41 percent less cotton
             ’ u               a h        e     ds e
      S m e s t yso e t t i oth sbi e,h U “ ol hv si              d        p
        bod [ h h w u ae a e t ol r e bu 1. e et See
                  c       d        i     e   d c             6 c .
       ara;w i ] ol hv r sd h w r pi aot 2 pr n” Paul Blustein, In U.S.: Cotton Cries
       Betrayal, WASHINGTON POST, May 12, 2004, at E01. Sumner was considered a traitor by US cotton interests.
           “ e o e oc wt h nm o u t er u o or a rga ’ a o a e , i
            ‘     i       e      h e
       Id. ( H j ndfr s i t ee yt cth ha ot f u f m por ,si D nC m rn v e
                                                    e     t            r         m       d            o c
       chairman of the California Cotton Growers Association and chairman of the California Tomato Growers
         s ii n. e a uh n c w s ue i ’ ea
           o ao              d                     ha
       A sc t nIc H si sc a at a ‘nt clbcuse Sumner is an employee of California's public
        n e i yt . hr r e a h rj t h h' en n l d i n h at h w ' d et
          v sy      e         e e s c
       ui rt ss m ’T e a r er po c t t e be i o e wt i t ps t t el i c
                                                es a s              vv        h        e       a      l r
        l w e …. I t sw sgvrm n lo m la r a d i m gtb cld t ao ad cutm r
         s
       e e hr        f i
               e ‘ h a oe et r it y e t , t i
                                      n a          ir le                       l e
                                                                       h e ae r sn n or a ial              t
        rcei s ol en re ’ a . la , r d t fh afri o o G o e s ii , a
               n       d
       poed g w u b i odr E rP Wii spei n o t C lon C t n rw r A sc t n w s
                                   , l        lm       se        e i a t                    s o ao
        ut a sy gn h
           e       n      e s r Fr r . .
       qo d sai it Wet n a Pes ) e      m s”
149
      The work of the legal interns at the Brazilian mission was reportedly also helpful in providing backup support for
       Brazilian officials in Geneva, as they helped to collect, process and organize information in Geneva. Interview
       with Brazilian diplomats (Brasilia, April 2006). On the internship program, see Part IV.__.
150
      Interview with Brazilian diplomats (Brasilia, April 2006). For more on DATARGO, see Part IV.__.
                                                            37

agencies.151 The resulting public-private partnership was composed of the Ministry of Foreign
Affairs’Dispute Settlement Unit in Brasília, the Brazilian mission in Geneva, the team of
                                         AAG ’
lawyers from Sidley & Austin, and D T R O steam of economic consultants, the latter
  ai i
    n e ii h     h      e n t f gi l r n A X r l n r
                                ir            ct
hv g ts wt n t Mi sy o A r u ue ad C ME ,Bais i e                       z’ t -ministerial
coordinating body for trade.152
Brazil also became the first developing country (and to our knowledge remains the only one) in
which the government has worked with a domestic law firm in a litigated WTO dispute.153 The
Brazilian Ministry of Foreign Affairs worked with a lawyer in a São Paulo-based law firm
(Veirano Advogados) in two successful WTO cases involving Brazilian exports of poultry,
respectively brought against Argentina (WT/DS241) and the EC (WT/DS269).154 In these cases,
the Brazilian Poultry Association (Associação Brasileira dos Produtores e Exportadores de
Frango, or ABEF) funded Veirano Advogados (in São Paulo) to help the Ministry of Foreign
   fr e n t n r l
   as e            s            z’
Af i df d i ad Baisinterests. The lead lawyer, Ana Caetano, had worked in
Washington DC for a law firm in which she had gained expertise in trade matters.155 Brazilian
law firms are relatively less experienced than US international ones, and as a result the
                                                                                     e i ’ fees,
government likely needs to attend to the legal submissions to a greater extent. Th fm s r
                            156
                                                       ae ad pea oy u d n r l
however, are much lower. Importantly, the WTO pnl n A plt B d rl i Baisle            e        z’
favor in both cases in 2003 and 2005. In addition, Veirano Advogados was hired by ABICS,
  r l sl l of i sy s ii ,
    z’ u e e d r o ao
Bais o b cf e nut asc t n in 2000 to provide advice in relation to a Brazilian
complaint against EC measures affecting soluble coffee imports. The case was settled
successfully for ABICS just days after Brazil filed its complaint.157 These examples show how
Brazil has broadened its internal expertise so that Brazilian private parties can obtain domestic
WTO-related legal assistance at a lower cost, whether for actual litigation or for preparation of a
complaint to facilitate a favorable settlement.
Brazil, as many other WTO members, has also challenged US and EU countervailing duty and
antidumping measures. In these cases, the government typically works with the law firm that
assisted the industry in the domestic proceeding. Thus, the government worked with the
    si t
       no C a i     w r         le a
                                 k
Wah g n D l fm Wi i Fr & G lge i Bais cm ln aa s U
                                         r         l             z’
                                                 aahr n r l o p i s gi t S   at       n
countervailing duties and safeguards on steel products, and against the US Continued Dumping
and Subsidy Offset Act of 2000 (see Annex 2). [to follow-up]

151
    Ms Serodio had been the manager of the CAMEX export program for sugar and alcohol in 2000. She joined
UNICA as a consultant in 2003, returned to the government in 2005 as the secretary for international relations of the
Ministry of Agriculture and then rejoined UNICA in 2006.
152
    Because of the four-fold nature of the collaboration, some Brazilian officials refer to this development as a
  sur g o w at cl r l “ r ia oe o WT i u el n i l n h oe et
       i               e l z’ h e lr                       ”
“qa n” f hthy a Bais t e p l m dlfr Od ptste et no i t gvrm n s        s e tm , v v g e                       n   ’
Dispute Settlement Unit in Brasília, the Brazilian mission in Geneva, and the private sector and lawyers funded by
                          oe et “ r ia m dl
                               n     ’ h e lr
it. See discussion of the gvrm n s t e p l ” oeand of CAMEX in Part IV.1.
153
      n xet n a b C i . e i a o …
               i
    A ecp o m y y h aSenr nt  n         f      e
154
    For details, see Annex II
155
       hf rn r e
         f tv w
      S a ei e i …
156
      Confirmed in interviews conducted by Shaffer, 2006.
157
       e At ,ur nt
          e      e
      Se lrspa o …
                                                         38

The private sector is not always willing to fund a case that the Foreign Ministry believes Brazil
should pursue or that it must defend as a respondent, and, in particular, cases of a systemic nature
for which the ministry believes it needs outside legal assistance. Thus, in 2005, the Ministry of
Foreign Affairs called for bids from international law firms to propose terms for assisting Brazil
in these cases.158 It chose Sidley & Austin. The first case in which Brazil hired the firm to assist
                                                                    r l
                                                                      z’
it as a complainant without private sector funding was in Bais2007 challenge to US
agricultural subsidies in the case United States - Domestic Support and Export Credit
Guarantees for Agricultural Products (WT/DS365). Brazil identified the case as of systemic
importance, in particular in light of developments in the Doha Round negotiations, and brought it
alongside Canada, which had filed first.159
Brazil, as other countries, often successfully settles complaints that it brings without litigation. It
did so in ten of its first twenty-three WTO complaints.160 In each of these ten cases, the Foreign
Ministry largely handled the case without the assistance of an outside law firm, although law
                                                             Ba l sces i
                                                                 z’
firms advised the affected private sector in some of them. r is ucs wt WT li t n   h O ig i   t ao
using a public–                                                  z’
                                                               r l
                  private partnership model has enhanced Baiscredibility in WTO circles,
which, in turn, has strengthened its hand in settlement negotiations conducted in the shadow of
potential litigation.


3.2.     Brazil as a Respondent
As of December 31, 2007, WTO members have filed requests for consultations 14 times against
Brazil, but only three of these complaints have been fully litigated – early desiccated coconut
                                                                      the
case, the Embraer aircraft case and the retreaded tires case, with a fourth now in litigation
(regarding Brazilian antidumping duties imposed on resins from Argentina).161 Brazil won the
desiccated coconut case on technical grounds (and then settled), came to a draw in the Embraer
case (winning as a complainant, losing as a respondent, and then settling), and lost the tires case
on appeal. The Brazilian government worked with private law firms in each of the three cases in
which a panel was formed (see Annex II).


158
                                                                            ett t s ae e i a o …
                                                                                  h r
    The call for bids was triggered by a case in which Brazil was a respondn( eye cs)Senr nt    .     f      e
159
     e “ r l r r C nd-Lk hlneo .. a us i n O” 5 9 ni US Ta ( y 0
             z      pe               e
    Se BaiPea s aaa i C aeg t US Fr S bi e iWT ,2: Is e .. r eJl2,
                                            l                m       ds                  2      d         d u
2007).
160
    See Annex II concerning Peru — Countervailing Duty Investigation against Imports of Buses from Brazil,
WT/DS112; EC — Measures Affecting Differential and Favourable Treatment of Coffee, WT/DS154; Argentina —
Transitional Safeguard Measures on Certain Imports of Woven Fabric Products of Cotton and Cotton Mixtures
Originating in Brazil, WT/DS190; Turkey — Anti-Dumping Duty on Steel and Iron Pipe Fittings, WT/DS208; EC
— Measures Affecting Soluble Coffee, WT/DS209; Mexico — Provisional Anti-Dumping Measure on Electric
Transformers, WT/DS216; US — Countervailing Duties on Certain Carbon Steel Products from Brazil, WT/DS218;
US — US Patents Code, WT/DS224; US — Anti-Dumping Duties on Silicon Metal from Brazil, WT/DS239; US —
Equalizing Excise Tax Imposed by Florida on Processed Orange and Grapefruit Products, WT/DS250.
161
    Nine of the fourteen cases involved policies targeted at specific sectors (five involving the automobile industry),
     and four involved regulations of a general nature (three regarding minimum import prices for customs purposes,
     and one regarding patents).
                                                         39

Civil society organizations have been helpful for Brazil as a respondent in WTO cases that raise
                               Ba l e os o h S hlne o t a n l n 00
                                  z’ s                 e
broader social implications. r isr pnet t U caeg t i pt ta i 20   l         s e w
(WT/DS199) exemplifies both the role that civil society organizations can play in WTO dispute
settlement, as well as the link between WTO dispute settlement and broader trade negotiations.
The US brought the complaint under the TRIPs Agreement against Article 68 (paragraph 1) of
                            rpr L w w i r i sh l aw ri ” f pt t that is,
                                 t             c qr e o
the Brazilian Intellectual Poe y a , h h eu e t “ cl ok g o a a n –       n          e
the local production of a patented invention as a condition for the recognition of an exclusive
                                                               h Ba l i eet l r
                                                                a z’ tl u
patent right. The Ministry of Foreign Affairs, maintaining t t r isn lc a poperty law
was TRIPS-compliant, devised and implemented a strategic response.162 NGO reactions to the
case were quite helpful to Brazil in its settlement negotiations with the US, as advocacy groups
maintained that the US government was placing corporate interests above life-and-death medical
concerns.163 This NGO pressure was complemented by prodding from international health
organizations.164 In June 2001, the Bush administration withdrew the US complaint. The
international response spurred by the case helped shift the terms of debate over the protection of
                            t nt n g r l n t r ee p g on i
                             r h n             z’
pharmaceutical patents,seg ei Baisad o e dvl i cute’ngtt g h        on           r s eo an  ii
position that intellectual property rules must be interpreted and applied (and, where necessary,
modified) so that they grant developing countries “  flexibility” address public health issues.165
                                                                 to
These debates ultimately gave rise to a modification of Article 31 of the TRIPs agreement in
2005, just before the WTO Ministerial Meeting in Hong Kong.166
  r l e os o h Cs 05 o p i gi t r ln a n h m oti f
    z’ s               e                    at n
Baisr pnet t E ’ 20 cm ln aa s aBaia bno t i pr t no          zi              e        ao
retreaded tires (WT/DS332) provides a second example where NGOs supported Brazil in a
complaint.167 The case is also of particular interest because it was the first time that the
                                 a i ’ s s ne i ot r a et ud g h
                                  w r            ia        h
government hired an outside l fm s as t c wt u pi t sc rfni .T e     ve      o        n
                                  e a h n r l df s o a o n a cm ln
                                   s c           z’ e
government began to coordinate r er o Bais e ne f pt tl o p i when theei          at
EC initiated informal consultations in 2003. It worked with interns from Brazilian law firms in
Brasília and former interns who had returned to Brazilian law firm practice from the Geneva
162
    The ministry worked without the assistance of an outside law firm, which was not needed at least in part because
the case was settled before litigation commenced.
163
    The point is further developed in Shaffer, The Challenges of WTO Law, supra note __.
164
                                                  U id aos o m s o nos r l I S o c n
                                                     t       i              sn
      For example, 52 countries of a 53 member n e N t n C m i i edr dBaisA D plyad   e      z’           i
       backed a resolution sponsored by Brazil that called on all states to promote access to AIDS drugs. See UN
       Rights Body Backs Brazil on AIDS Drugs, NEWS24.COM, Apr. 24, 2001, available at
       http://www.news24.com/contentDisplay/level4Article/0,1113,2-1134_1014970.00.html.
165
    WTO, Ministerial Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/2 (Dec. 20,
2001).
166
    WTO General Council, Amendment of the TRIPS Agreement, WT/L/641 (Dec. 8, 2005).
167
    See Brazil –Measures Affecting Imports of Retreaded Tyres, 20 June 2005, WT/DS332; Panel Report, Brazil –
Measures Affecting Imports of Retreaded Tyres, WT/DS332/R (June 12, 2007); and Appellate Body Report, Brazil
–  Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R (Dec. 3, 2007). See details in Annex II. The
case WT/DS332, Brazil, Measures Affecting Imports of Retreaded Tyres, 20 June 2005, brought by the EC, directly
affected two Brazilian industries –that producing new tires and that selling and importing used and/or retreaded
tires. The Ministry maintained that the case was of systemic importance, since it implicated environmental and
health concerns, and thus the defense should not be based on the partial, commercial points of view of affected
industries.
                                                          40

mission. The government decided not to settle the case and rather to defend the Brazilian
regulations on social policy grounds, and in particular environmental and health grounds. Since
the private sector did not hire a law firm to assist the government in the case, the Ministry of
Foreign Affairs issued a call for tender in December 2005, hiring Sidley & Austin on account of
its experience and its offices in the US and Europe, on a fixed cost basis. The US firm could thus
support the Foreign Affairs Ministry with its defense in the case, as well as others in the future,
as determined by the government.168 The government was further supported by Brazilian NGOs
who, for the first time, filed an amicus curiae brief before a WTO panel, together with a US-
based NGO.169 The NGOs helped to spur media coverage of the case from an environmental and
  el pr et ei upro t oe et psi 170
     t s i n
hah e pcv, spotfh gvrm n s oio.      e     n     ’      tn


3.3        Brazil as a Third Party
When Brazil files as a third party in a WTO case, the government typically has not worked with
an outside law firm, although even here there have been some developments as noted below.
Rather, the dispute settlement personnel in the Geneva mission have typically done most of the
work on their own. The Geneva mission communicates with and obtains the approval of the
Dispute Settlement Unit in Brasília before filing the third party submission, but it can act with
much more autonomy than when Brazil is a complainant or respondent, largely because the
stakes are much lower. In addition, third party participation is not as costly to the government in
terms of expertise, since a third party is not required to file a formal submission, and when it
does, the submission can be short and non-technical in nature. This situation has changed
somewhat since Brazil hired Sidley & Austin pursuant to its 2005 call for tenders noted above.
As can be seen in Annex II, the firm has been available to assist Brazil in its third party
submissions since 2005. [to follow-up]
The mission in Geneva often has used its interns for research support for its third party filings.
Since the cases last longer than the four-month internship, former interns have often continued to

168
     h l i okd i h i sys i t el n U i n
          w r                h e ir            p e tm            t
    T ea fm w re wt t m n t ’Dsu Ste et n i Brasília and the Geneva mission, which is
now standard practice when Brazil is a party.
169
    See supra note __ and __ and accompanying texts. The amicus curiae brief was filed by: Associação de Combate
     aos Poluentes (ACPO), Associação de Proteção ao Meio Ambiente de Cianorte (APROMAC), Center for
     International Environmental Law (CIEL), Centro de Derechos Humanos y Ambiente (CEDHA), Conectas
     Direitos Humanos, Justiça Global, Instituto O Direito por Um Planeta Verde Planeta Verde. Another amicus
     brief was filed by the American NGO Humane Society of the United States. Both briefs supported Braz’    l
                                                                                                             is
     defense of environmental and health concerns. They are available at: http://www.ciel.org and
     www.hsus.org/web-files/PDF/Brazil-Retreaded-Tyres-Submission-of-Non-Party-Humane-Society-
     International.pdf (accessed February 2008).
170
      See, e.g., Juana Kweitel, Folha de São Paulo, TENDÊNCIAS E DEBATES, August 7, 2006. Other declarations may
       be found at: http://www.mma.gov.br/ascom/ultimas/index.cfm?id=2830, and http://www.ciel.org (accessed
       February 2008), as well as http://www.justicaambiental.org.br/ (accessed September 2006). For these and other
       documents        regarding        the      case,     see         ICTSD        website:     http://www.trade-
       environment.org/page/theme/tewto/tyrescase.htm (February 2008).
                                                           41

assist the government with the matter on a pro bono basis after they have returned to legal
practice in Brazil.171 In this way, they can continue to gather experience for marketing in the
                                                                              z’ prc ao s
                                                                               l
future. The interns have reportedly made important contributions to Brais a ipt na a ti i
third party, including after they returned to their firms in Brazil. To our knowledge, this program
is unique among WTO members, although China also works with private firms for its third party
submissions.172
The government typically does not develop partnerships with the private sector when Brazil
participates as a third party, except when it files a complaint of its own in a parallel case.173
When Brazil files as a third party, it does so because the country has more of a systemic interest
in the dispute, rather than a direct commercial one. The Brazilian private sector is thus less
interested in funding the hiring of a law firm. Some of these cases nonetheless can have
important implications for the private sector which thus may become involved. A Brazilian
company funded an outside law firm to assist the government as a third party for the first time in
the huge US-EU dispute over the subsidization of Boeing and Airbus. Embraer funded the law
firm King & Spalding to assist it in following the case and to work with the government in
Baisins s t r pr , in which Brazil assumed an engaged role.174
    z’ l g
  r l fi a ah d a y    i     t


             A I S E I D R Z LS S F         O IP T E T E N :
       IV. WH TL E B H N B A I ’ U EO WT D S U ES T L ME T
      COORDINATION OF THE PUBLIC AND PRIVATE SECTORS [still to be edited by
                                  GCS]
To respond to the challenges and opportunities of WTO dispute settlement, Brazil has developed
                                                    a “ r ia sut e o WT i u
                                                     l h e lr r u
what officials in the Ministry of Foreign Affairs cla t e p l ” t c r fr O d pt             s e
settlement. The structure consists of a specialized WTO dispute settlement division located in the

171
      See Part IV on the internship program.
172
      China participates as a third party in most WTO cases. It solicits bids from Chinese law firms in Beijing to
       provide assistance in the drafting of the legal brief in these cases. Discussion of Gregory Shaffer with member
        f h a is
             ns i
       o C i ’m n try responsible for WTO matters, February 2006.
173
      The major exception would be where Brazil files as a third party as well as a complainant in a related case. See
                      n acm ay g e . r l cm ln e r n o b of ,o ea p , a i
                                      n x        z’         at gdg ue e
       supra note __ ad co pni t tBais o p i r a i sl lcf efr xm l w smplicated                       e
         y ni s o p i n h Cs ee l r e ne ss m T e ul–
              a         at       e            a fe              e             i
       b Id ’cm lno t E ’gnr pe r cs yt . h pb cprivate coordination developed for the
       complaint of the soluble coffee case was extended to the drafting process of third party submissions to the panel
       and Appellate Body in the EC —Tariff Preferences case brought by India. ABICS (Associação Brasileira das
       Indústrias de Café Solúvel) was the private trade association representing the coffee producers and it hired the
       Brazilian law firm Veirano Advogados. See Annexes II and IV, as well as supra note __ and accompanying
       text.
174
          ., s e .. r ,Ba l i wt U n ru et e e O oi Pnl 1 (e.,08.
          gI d               d
   See e . ni US Tae“ r iSds i E i A gm n B fr WT B e g ae” 7 Fb120)
                                   z     e h                  s o                n       ,
The cases are European Communities and certain member States — Large Civil Aircraft (WT/DS316); United
States - Large Civil Aircraft (WT/DS317); European Communities — Measures Affecting Trade in Large Civil
Aircraft (Second Complaint) (WT/DS347); United States — Measures Affecting Trade in Large Civil Aircraft —
Second Complaint (WT/DS353).
                                                           42

 ail r l t it ia , ori t n e e h ui n r l WT
    t      si h r lr                     ni
cp a Baía( efs p l )cod ao btent s n adBais O m s o i
                                                   w       i t             z’               sn
                                                                                          ii n
  eea t scn p l )ad ori t n e e bt fh e n ts i r l pi t
          h            lr
G nv ( e eod ia ,n cod ao bten o o t s eti wt Bais r a
                                       ni        w        h      e      ie h z’ v e
sector and, in particular, law firms and economic consultants funded by the private sector (the
 h d ia . h ori t n i t e n r l i m d t n r t n n v ul O
  i lr           s
t r p l )T i cod ao a sodf dBaism eiei e s i i i da WT
                          ni m              e       z’           a te s             di
cases while facilitating the development of local Brazilian capacity that can supplement
constrained governmental resources for time-sensitive, costly WTO disputes. The Ministry of
Foreign Affairs created the specialized Dispute Settlement Unit in 2001, which increased its staff
during the following years. It consisted of six professionals based in the capital, Brasília, at the
end of [2006].
  h Ds t el n U i ori t wt r l WT i i n eeaw i i u s
        p e tm                t        n e h z’
T e i u Ste et n cod a s i Bais Om s o i G nv, h h nl e               sn                 c cd
around three professionals dedicated (in whole or part) to WTO dispute settlement. This unit
works closely with the affected private sector and any outside legal counsel hired by it. As an
important part of this third pillar, the Brazilian mission started a program in 2003 to facilitate the
training in WTO law and dispute settlement of young attorneys from Brazilian law firms by
inviting them as interns to the Brazilian mission in Geneva, supported financially by the law
firms. There, they can supplement constrained governmental resources and develop expertise for
when they return to Brazil and work with the Brazilian private sector.175 This mission also
included interns from other government agencies (i.e. other than from the Ministry of Foreign
Affairs) and from private business associations. As one Brazilian representative notes, through
                      n r l m s o n eea “ e r r n o pe nwe e fh
                             z’        sn
creating internships i Bais i i i G nv, w a t i t sr dko l g o te yg           a          d          e
                                            176
 yt n retc a c tam s”
    e                e e ic
ss m iodro r ta ri l as                   .
This Part is in two sections. The first section assesses the organizational moves made by the
Ministry of Foreign Affairs to strengthen governmental capacity; and the second the initiatives
taken by private persons and entities to develop their own capacity and collaborate with the
government where practicable, resulting in the formation of Brazilian public– private networks
for WTO matters, and, in particular, dispute settlement.


4.1        Reorganizing Government to Respond to WTO Challenges
 h itw ia f r l ori t t t y o WT i u el n i l
      r          lr         z’        n e re
T efs top l so Baiscod a dsa g fr O d pt ste et no ea        s e tm             vv
specialized dispute settlement unit –mainly working on WTO cases –located in its capital
  r l, n flt e br f h i s n n r l
   si           fie             s
Baía ada ia dm m e o t sd io i BaisWT m s o i G nv. h
                                     i vi             z’          sn
                                                            O i i n eea T i            s
 et n rv e n vr e f r l oe et t c r o i u el n n
   i         d
sco poi sa oe i o Baisgvrm n lsut efrd pt ste eto
                          vw         z’        n    a r u          s e tm


175
      Interviews with Brazilian officials and private sector representatives in São Paulo, Brasilia, and Geneva, April
       and June 2004, as part of a project on the Brazilian model for WTO dispute settlement. Confirmed in
                                                        s e le e n te tC S ’ e i o
                                                            g p s av
       presentation of Celso de Tarso Pereira, Brazil’ l a r r eti a IT D ssm nr nWT d pt          a        O iu s e
       settlement, 7 Feb. 2003 (Geneva). The internship program was created when the Brazilian mission was headed
       by Ambassador Felipe Seixas Correa.
176
      Shaffer discussion with Brazil representative, 1 Feb. 2005, Geneva.
                                                           43

international trade matters, including changes implemented in response to the challenges of, and
opportunities provided by, the judicialized WTO system.
The Ministry of Foreign Affairs is responsible for advising the President of Brazil on the
formulation and implementation of Brazilian foreign policy and for maintaining relations with
foreign governments and with international organizations.177 During the almost two centuries
since the creation of the ministry of foreign affairs, the ministry, under the direction of the
                                        z’ fr g o c,n u n e e n r t nl n
                                          l        i      i     c d g o tn i
President, has set and implemented Brais oe nply i l i bfr i e aoa ad
regional bodies, such as the United Nations, the WTO, the Organization of American States
(OAS), and Mercosur. The Foreign Ministry is divided into secretariats (sub-secretarias), which
in turn are split into departments (departamentos) and units (coordenações), together with
separate coordinating, advisory and support bodies, such as the Rio Branco Institute (Instituto
Rio Branco) responsible for the selection and training of diplomats. The Foreign Ministry
comprises the Department of State, operating within Brazil, and the Overseas Departments,
which consist of the Multilateral and Bilateral Diplomatic Missions and the Career Consular
  ea m n . s r l fr g o c r ri ae hne,
      t s             z’      i       i      o ts
D pr et A Bais oe nplypi ie hv cagd the Ministry has adapted its
organizational structure and diplomatic activities to the challenges posed. Since the Brazilian
economy began to liberalize and integrate regionally and globally at the end of the 1980s,
Ministry of Foreign Affairs restructured itself in order to meet the needs of the new Brazilian
foreign policy.178
Since the end of the 1990s, the Ministry has granted increasing importance to WTO issues. In
 a , r f r l psa bs oso h A T n t
  ct e           z’
f t he o Bais atm asdrt t G T ad h WT , u Fl e a pe , e
                                  a          e                          z i
                                                           e O L i ep Lm r aC lso       i
  a r n e o m r bcm h on ys oe n i s rm eie o o i h r
    e         s         m
L f adC l A oi , ea et cut ’ fr g m n t i m d tyfl wn t i
                                       e      r       i       ie            al l g e
Geneva posting. As a result, for more than thirteen years, from 1995 to the present, the foreign
minister himself has had considerable expertise in WTO affairs. In August 2005, the
Undersecretary General for Matters of Integration, Economics and Foreign Trade in Brazil,
  l a o uuny i o bcm r l nw
    d d                  h
Cool H gee Fl , ea eBais e WT a bs drm i a i ah hl e
                                          z’                     a         n in
                                                       O m as o, a tn g i e l            g v
foreign ministry presence in Geneva to address trade issues. In addition, after Celso Lafer
 ea e r l fr g i s rt i sy et bu hl fh r ln i o t h
             z’      i        ie e ir
bcm Bais oe nm n t ,h m n t sn aot a o t Baia d l a t t        f      e zi p m s a
graduated in 2001 (around 20 among the 40 graduated) to the Brazilian Mission in Geneva for
their three-month foreign internship.179 These assignments (especially those at the highest level)
 ae e e t poi Ba l m s o n eea i e spotn h ail o pr o
         p           d     z’ s n                     h
hv hl d o rv e r is i i i G nv wt ky upri t cp a C m a dt                 e t.               e

177
      The formulation and implementation of Brazilian foreign policy is to be done by the President (Article 84.VIII of
       the Brazilian Federal Constitution dated as of 1988), normally represented by the Foreign Ministry (Decree N.
       99.578/90 and the Provisional Measure N. 813/95). The Brazilian Congress has the power only to approve or
       disapprove, in whole or part, the commitments undertaken by the Executive Branch (Article 49.I of the
       Brazilian Federal Constitution). In the case of dispute settlement, the Congress does not play any formal role.
178
               See       Ministério         das           Relações           Exteriores,         accessible          at
       http://www.mre.gov.br/portugues/ministerio/estrutura/papel/index.asp.
179
      Telephone interview with member of Brazilian mission, Oct. 2006. However, in 2003, a new person took charge
       of the Rio Branco Institute (for training new diplomats) and once more, graduates were sent to other Latin
       American countries, reflecting more of a south–south orientation in trade policy.
                                                           44

other developing countries, the ministry has allocated significant resources for handling WTO-
related issues, including for dispute settlement.
Until 2001, however, there was only one unit in the Ministry –named the Investment Goods
Department –that handled all trade-related matters at the ministry, including all major trade
negotiations relating to the WTO, the proposed Free Trade Area of the Americas (FTAA),180 EC-
Mercosur Free Trade Agreement (FTA), and the Latin American Integration Association
(ALADI).181 At uht WT w si r s g bcm n a i pr n i u o Bais
                    h
                  l og h                    c an y
                             e O a n e i l eo i n m ot ts e n r lg           a s              z’
foreign policy agenda, the institutional structure of the state was not yet adapted to address the
demands of these negotiations and the increasing number of complex dispute settlement cases
involving Brazil. The Brazilian mission in Geneva, headed by Ambassador Lafer (1995–       1998),
felt the need for increased support from the capital.
In 2001, after Lafer returned to Brasília as foreign minister, the ministry split the Investment
Goods Department into six specialized departments, and allocated more human and budgetary
resources to them. WTO matters are now handled within the General Under-Secretariat for
   tr fn gao E oo i n F r g Ta ,r
    ts        e tn                  s
Mae o It r i , cnm c ad oe n r ef m w i Bais ur tm asdro
                                            i                  c     z’
                                                   d o h h r l cr n a bs o t  e           a
the WTO, Hugueney, came. This Under-Secretariat is responsible for overseeing all WTO issues,
as well as all trade negotiations other than those involving only Latin America.182 The Under-
Secretariat for Matters of Integration, Economics and Foreign Trade thus handles FTAA
negotiations and negotiations for free trade agreements with the European Communities and
other countries, in addition to all WTO matters.
As part of these institutional changes, the Ministry created a unit for dispute settlement within
the Under-Secretariat for Matters of Integration, Economics and Foreign Trade in October 2001,
named the General Dispute Settlement Unit (Coordenação Geral de Contenciosos).183 Through
this unit, the Ministry aimed to respond more effectively to the growing demands of WTO
dispute settlement, as well as to manage disputes within Mercosur and to negotiate dispute

180
      In 1994, the Clinton administration pushed for the creation and institutionalization of Summits of America,
       bringing together the heads of state from the region to address a wide array of issues, from democratization and
       human rights to trade and investment. The first Summit of the Americas was held in Miami in December 1994.
       There the US pushed for the creation of a Free Trade Area of the Americas. Since November 2002, Brazil has
       been co-chair of the FTAA negotiations, together with the United States, to help coordinate the work program.
181
      ALADI was created in 1980, replacing the Latin American Free Trade Association, founded in 1960. ALADI
       aims to foster economic co-operation among its 11 members –Argentina, Bolivia, Brazil, Chile, Colombia,
       Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela, and is less ambitious than its predecessor which
       sought to create a common market.
182
      Inter-Latin American trade negotiations, such as pursuant to Mercosur, the OAS and ALADI, are the
       responsibility of the Latin American Under-Secretariat.
183
      The dispute settlement unit was created pursuant to Decree N. 3.959, dated as of 10 October 2001, which
       regulates the internal organization of the ministry of foreign affairs. This Decree was replaced by Decree N.
       4.749, as of 21 June 2003, and then by Decree N. 5.032, as of 5 April 2004. The latter was in force in May
       2006.
                                                                   45

settlement chapters in existing and proposed trade agreements, such as the FTAA, EC–Mercosur,
and the review of the WTO Dispute Settlement Understanding. The Dispute Settlement Unit is
currently placed within the structure of the Ministry of Foreign Affairs for international
economic issues as follows:



                         B aia
                            l n ns y f oe n f r Structure (2007)
                                 t       g   as
                 Table 4: rzi Miir o F ri A fi ’

                                                        Ministry of Foreign Affairs


                      Foreign Relations Secretariat        Diplomatic Missions Abroad   Office


                             Sub-Secretariat
                     for Economic and Technological
                                Issues
                                (SGET)

                  Main Office          Unit of Support for
                                       Regional Integration
                                          Negotiation
                                             (UNIR)


                 Department for      Economic Department
                 Scientific and
                 Technological
                 Issues (DCT)

                           Dispute Settlement         Unit for Economic
                               Unit (CGC)              Organizations
                                                           (CORG)


                                         Specific-Issues
                                           Sub-Units



Source: Prepared by the authors, according to detailed charts available at www.mre.gov.br (April 2007).


From 1999 until 2001, Roberto Carvalho de Azevêdo was responsible for handling the dispute
settlement cases from the Brazilian mission in Geneva (and, in particular, the Embraer case),
from where he moved to head the new unit in Brasília, holding this post from 2001 to December
2005. As of [June 2006], the unit consisted of five professionals in Brasília, led by Flavio
Marega, and three professionals in Geneva (although only one of these Geneva-based diplomats
handles dispute settlement on a full-time basis).
The dispute settlement unit is responsible for analyzing the legal and factual grounds for a
complainant before the WTO, defining strategies, preparing and (if applicable) overseeing
 u i a e s r r i f e l um s o , n a i
   s e w ’ p ao                   g
otd l yr pea t no l a sb i i s adprc          sn              tipating in hearings before WTO
panels and the Appellate Body. The unit has so far worked largely on its own at the pre-panel
stage. When Brazil is a complainant before a panel, the unit has usually counted on the assistance
of a law firm that works for the government but is funded by the affected private sector.
                                                          46

However, in some cases, the private sector is unwilling to support the costs of outside legal
assistance, whether because the case is of a systemic nature (with no particular private interests
affected), or because of the amount of legal costs. As a result, the Ministry issued an
international call for bids in 2005 in order to hire an international law firm to assist it with trade
disputes, as needed. The Ministry maintained that it needed an international law firm for these
purposes (as opposed to a Brazilian one) since it would need the support of practitioners that are
familiar with foreign law regimes, and can pursue discovery abroad. In December 2005, the
Ministry hired a US law firm (Sidley & Austin), with offices in the United States and Europe
(and including Geneva), to render these services to it. As noted above, Brazil first used the firm
in the EC-tires complaint (WT/DS332), in which the Brazilian government raised a defense
based on environmental and health concerns.184
The unit works in coordination with other governmental departments and the private sector to
gather data and analyses in its identification and assessment of potential cases. These cases may
be identified by sectoral ministries (e.g. agriculture or commerce), or by private parties. In the
cotton and sugar cases, the Ministry of Agriculture together with the affected sector referred the
matters to the ministry of foreign affairs, while Embraer referred a claim against Canada directly
 o h n t fl wn aaa n i WT o p i gi t r l
     e ir l g                      s ia
tt Mi sy o o i C nd’i tl Ocm lnaa sBai                  at n            z.
Brazil has created an inter-ministerial process for the investigation, preparation and approval of
the filing of a WTO complaint.185 The unit identifies potential cases based on preliminary
information provided to it by the affected private sector or other government officials. The
dispute settlement unit then takes this information to the unit within the Ministry of Foreign
Affairs that handles the substantive issues relating to the claim. This unit then provides the
information to the relevant Ministry, such as the Ministry of Development, Industry and Trade
(for industrial matters) or the Ministry of Agriculture (for agricultural matters), in order for it to
pursue a preliminary investigation and collect data. The collected data and information is then
taken to the Inter-Ministerial Foreign Trade Chamber known as CAMEX (Câmara de Comércio
          , n f r l gvr et onen hm e Conselho de Governo). CAMEX
                       z’         n
Exterior)oeo Bais oe m n cusl gca br (            i            s
consists of around seven ministers and is responsible for formulating, adopting, implementing
and coordinating policies and activities related to foreign trade of goods and services. As regards
WTO disputes, it is CAMEX that decides whether Brazil will formally file a request for
consultations before the WTO Dispute Settlement Body, whether a Brazilian regulation or
practice should be modified if a complaint has been brought against Brazil, and whether a




184
      See supra note ___, and Annex II.
185
     s e a o s“ l i h i atn fh C cx oe f aae et h n i t nl rai t n
           g e oo g e s lg                            e
    A V i nt ,fl wn t d m n i o t ‘ae m dlo m ngm n t i tu oaogn ao   ’                , e st i                 zi
of the State in the trade policy filed has been gradually reshaped. Since then, trade policy is dealt with through many
ministries—Finance for tariffs and incentives; Development and Industry for public credits, anti-dumping and
export promotion; and Foreign Affairs for coordinating trade negotiations, etc. Veiga, Trade Policy Making, supra
 o …,t 5.
    e
nt a14
                                                         47

foreign party has implemented a WTO decision in favor of Brazil and, if not, what retaliatory
measures, if any, Brazil should impose.186
Once CAMEX decides that Brazil should file a request for consultations, then the Dispute
Settlement Unit assumes responsibility for pursuing the case, even though other ministries and
units may continue to provide information, discuss strategies and generally follow the case. In all
 ae i h h r ls cm ln t e nat rh d a y t n ’ of is r r o
             c      z
cssnw i Baiia o p i n df dn o t r pr ,h uis fc lpea , r
                                  aa, e                   i       t e t          ia       pe
oversee the preparation of, submissions and participate in the hearings before WTO panels and
the Appellate Body in Geneva. However, where Brazil participates only as a third party, it is
usually the Ministry of Foreign Affairs alone (and not CAMEX) that decides whether to
intervene, possibly because the stakes are less high for Brazil in these cases.
The unit also coordinates bilateral settlement negotiations over WTO complaints, which may
occur before, during, and/or after the formal DSU proceeding. The unit, where relevant, may
organize meetings over the settlement terms with the affected sector and other governmental
  i si n n s F r xm l i h el n f h S o p i gi t r l
     ir s          t
m n te ad ui. o ea p , n t ste eto t U cm ln aa s Bais
                                  e        e tm              e            at n              z’
compulsory licensing provisions (DS199), the unit reviewed and discussed the proposed
settlement terms with the intellectual property unit within the ministry of foreign affairs, the
Ministry of Development, Industry and Commerce, and the Ministry of Health, all three of
whose policy domains were implicated by the dispute.
The second pillar consists of the Brazilian mission in Geneva and, in particular, the diplomats
assigned to follow and report on dispute settlement developments from Geneva, and formally
submit all filings. The lead representative in Geneva for dispute settlement typically is
responsible for representing Brazil as a third party in those WTO cases in which Brazil
participates in this capacity, drafting the submission (subject to review and amendment in
Brasília) and attending the panel and Appellate Body meetings. This representative also attends
the bimonthly meetings of the Dispute Settlement Body, all meetings on the review of the
Dispute Settlement Understanding, and (where relevant) meetings of other WTO bodies in which
matters relating to a dispute may be raised, such as the Agriculture Committee for agricultural
disputes. The position of this point person can be extremely demanding in light of the number of
cases in which Brazil has been a party or third party. For this reason, The Ministry of Foreign
Affairs has periodically assigned some additional personnel to address dispute settlement issues
in Geneva, with currently three persons being available at the Geneva mission on a full-time or
part-time basis for dispute-related matters.




186
      CAMEX consists of the minister of development, industry and trade, who presides over it, and the ministers of
       foreign affairs, finance, agriculture, planning, budget and civil house. See Decree No. 4.732/2003. Veiga,
        o ee i s h “ e rb m f n i i a cod ao e i . e a Ta o c-Making, supra
               ,n         a h          e
       hw vrf d t t t pol o i t t nl ori t nr a s V i , r eP ly
                                                 su o           ni       m n” g           d     i
        o …,t 5.
          e
       nt a14
                                                           48

4.2        Initiatives of Business, Academia and Civil Society
Until very recently, most knowledge of WTO-related matters in Brazil, from negotiations to
dispute settlement, was limited to government representatives. Few law firms or economic
consultants dealt with trade issues, except for a few internal anti-dumping or countervailing duty
cases, which were largely viewed as any other domestic legal procedure. A division of the
Brazilian Ministry of Development, Industry and Trade handled the investigations, and it
allegedly was not very concerned with their relation to international legal constraints, since
Baisn raam n t t n w rl s w ro i e aoat d l t noa.
  r l i e ld i saos e e a a fn r t nlr ea h t y
    z’ t n              ir i          e s        e     tn i          a w a d 187
                    s et llm it t u c lao o t n r t nlr e e m hs
                          r a            a e d ii i
One of this Article’cn ac i sshth j iazt n fh i e aoat d r i e a    e tn i           a g
spurred the Brazilian state and private sector to reorganize themselves and work more closely
together on international trade matters than they have ever done before. Our claim is that the
Brazilian state has strengthened its ability to participate at the international level, including
through the use of the international legal system for trade, through a diffusion of expertise.
  r l a dvl e hth oe et as t r ia fr i u el n m tr
    z            o             e
Baihs ee pdw a t gvrm n cl a“ i p l ” o d pt ste et ae ,
                                       n         l      h d lr          s e tm               ts
which enhances its ability to assess and respond to trade-related legal matters. This third pillar
consists of the private sector, which broadly includes business, academia and civil society,
                                                        Sn h
                                                           c e O s r t n pi t et
                                                                          ei
informed through different informational networks. i et WT ’ c ao, r a sc r           ve o
initiatives have deepened knowledge about international trade issues among a broader array of
persons, who can be viewed as forming a Brazilian epistemic network, in turn linked to
international ones.188 This section traces developments in academia, trade associations, think
tanks, consultancies and elite law firms in Brazil since 1995.


4.2.1 The Brazilian Media and Information Networks
Over time, the Brazilian media has played an important role in increasing broader Brazilian
public awareness of WTO rules and their impact on the Brazilian economy and society. Before
the Embraer dispute, WTO matters were rarely covered in the Brazilian press. Due to the
importance of the Embraer case, two leadings newspapers in Brazil decided to base full-time
journalists to follow WTO issues in Geneva.189 Today, major Brazilian newspapers report on a
 e l bs . vn h g a u br f o et gop sr ul riz r l fr g t d
  ga         s        o                      i          i y ic e z’
r u r ai E e t uh nm e o dm sc rus e os c ti Baisoe n r e                          i a

187
      Brazil first adopted an anti-dumping law in 1986, but did not take its first anti-dumping measures until 1988. It
       revised its legislation to implement the Uruguay Round Antidumping Agreement in 1995. See Welber Barral &
       Gilvan Brogini, section on Brazil, in Sweden National Board of Trade, The Use of Antidumping in Brazil,
       China,       India     and     South    Africa   – Rules,        Trends       and     Causes    available     at
       http://www.tralac.org/pdf/Antidumping_in_4_Developing_Countries.pdf.
188
      On epistemic communities, see Peter Haas, Introduction: Epistemic Communities and International Policy
      Coordination, 46 INT’ORG. 1, 3 (1992).
                          L

189
      The newspapers were Gazeta at the time and O Estado de São Paulo. Interviews with a Brazilian mission official
       and one of the journalists based in Geneva in September 2006.
                                                           49

 o c, oto m n t hv t n r en r l scesn O i u el n n,
   i                    ar           k      d
plym scm etos aeae pi i Bais ucs i WT d ptste etad   z’                       s e tm ,
in particular, the cotton and sugar cases brought against the United States and Europe. Extensive
 oiv oe g o o e r l 05 io e n h C
    te          a       l          z’           c rs         e
psi cvr efl w dBais20 v t i i t E -sugar (WT/DS266), US-cotton
(WT/DS267) and EC-poultry (WT/DS269) cases, as well as in the arbitration in the EC-bananas
case (WT/DS27).190 The Brazilian media also examined how these cases implicated the
negotiations on agriculture in the Doha Round, thus highlighting their potential systemic
importance, as Brazil pressed for a ban on all agricultural export subsidies (primarily used by the
United States and European Communities), tighter limits on domestic subsidies, and a significant
reduction in agricultural tariffs, particularly in Europe. Brazilian journalists have, as a result,
sought further training on WTO matters. The São Paulo American Chamber of Commerce and
the agricultural think tank Institute of Studies on Trade and International Negotiations (ICONE)
                t d o o nlt or
                 r          u is            e
organized a “ aefrj ras cus.”Many journalists also took part in trade courses
organized by academic institutions, such as those organized at the Getulio Vargas Foundation
Law School (FGV Law School), in São Paulo.
In addition, the government, private sector and academia have developed specialized newsletters
on international trade matters, largely involving WTO disputes and negotiations. Periodically,
the Brazilian mission in Geneva publishes the Carta de Genebra, which provides an update on
WTO developments, including dispute settlement.191 Since July 2004, under a partnership with
the Geneva-based NGO International Centre on Trade and Sustainable Development (ICTSD),
[FGV Law School] publishes Pontes-entre comércio e desenvolvimento sustentável, which is a
  ot us e i f C S ’
    u           sn
P r geevro o IT D sBridges, which comes out once per month, with original
reporting and analysis by Brazilian academics, practitioners and civil society representatives.192
As knowledge of the WTO dispute settlement system has spread in Brazil, private parties have
sought means to make use of it, whether to obtain greater access to foreign markets, or to defend
Brazilian internal policies. These developments have opened a new niche for private legal and
consulting work and academic study, generating competition for new expertise.




190
      See, for example, Revista Exame, OMC anuncia decisão inapelável contra subsídio europeu ao açúcar, 28 April
       2005; REVISTA EXAME, OMC autoriza Brasil e outros países a retaliarem exportações dos EUA, 31 August
       2004; FOLHA DE SÃO PAULO, Brasil é o quarto país que mais vai à OMC, 18 May 2005. In addition, Welber
                 r xm l w ish “ ui a A gs[04,h ot o m n d e st n r l –and
                         e t a             n s                       e
       Barral, fo ea p , re t t D r gl t uut20]t m scm et nw im i Baia                e         e         si
        e a l b Pe d t u ’A m n t t n was the Brazilian victory in two international disputes before the
          tn          se         a
       cr i y y r i n L l s d i sao –     ir i
           r r
             d d rai t n h Szi ” e
       Wol TaeO gn ao, t U -cotton and EC-sugar disputes. Welber Barral, Trade Disputes and the
       Brazilian Character, 5: 4 BRAZIL NEWS at 1 (Oct. 2004) (published by the Brazil Information Center).
191
      See http://site.mre.gov.br/portugues/links/links/omc/carta_genebra.asp.
192
      Carta de Genebra is accessible at http://www.mre.gov.br (accessed February 2008) and the publication Pontes –
       entre comércio e desenvolvimento sustentável at both http://www.edesp.edu.br and http://www.ictsd.org (both
       accessed on February 2008).
                                                          50

4.2.2      The role of legal education
Brazilian university departments and course offerings have changed significantly in the last years
in response to the phenomenon of globalization, the opening of the Brazilian economy and the
increased focus of Brazilian policy on trade-related matters. Brazilian law schools were not
required to have an international law course until the mid-1990s, and there were few
international trade courses offered at Brazilian universities generally. Until the early 2000s, there
were few courses on trade law specifically, and there was little to no academic debate on the
                      eii d i e aoa r aos col e o c a d n lh a
                          az       nr i           li
subject. Similarly, spc le “ t nt nle t n”sho w r nt r t ut t le  s e            ee        i e t
1990s.193 This lack of attention in academia was both a consequence and a cause of the lack of
awareness of the WTO system in Brazil. Business, law firms and the government had little
interest in hiring expertise in this area, so that there was no demand for schools to introduce
classes. Law schools offered a few courses in public and private international law, but they were
of general coverage and offered little to no introduction to the complexities of trade law. As a
result, knowledge of WTO matters outside of a few officials in The Ministry of Foreign Affairs
was extremely limited. A few private practitioners handled occasional anti-dumping and customs
matters, but they did little else involving trade law. While private attorneys often teach law
courses as adjuncts in Brazil, they offered almost nothing in trade law since they had little
practical knowledge or incentive to develop it.194
Since 2000, the situation has changed. As interest in the impact of WTO rules on Brazil
increased, the demand for legal education on the subject did as well. As new courses were
offered, there was a greater supply of knowledge of WTO law into which the public and private
sectors could tap. For example, the law school of the University of São Paulo (among the most
prestigious in Brazil) offered three trade-related law courses in 2000, all of these being optional,
upper-level courses for students during the last two years of the five-year undergraduate
program. In 2005, in contrast, the university offered two courses focused on WTO matters alone
at this level, in addition to four other courses that were trade-related.195 One of these WTO
courses was required for graduation. Since 1999, Masters and PhD theses in law increasingly
focus on trade-related issues,196 and students have increasingly formed study groups in this area.


193
     . y o ,O s d dse çe i e c ni o r l et o a r ”Revista de Sociologia e Política,
          a o          u          l         tn o s
    S Mi m t “ et o a r aõsn rai a n Bai o s d d a e,          s: a              t
Curitiba, Universidade Federal do Paraná, (12): 83-98 (1999). The first course on International Relations created in
Brazil was in the University of Brasilia, in 1974, which established a master only ten years later (1984). Afterwards,
only on the 1990s new courses started in other institutions, mainly concentrated on the South and Southeast regions
of the country.
194
      One exception was Professor Luiz Olavo Baptista, who is a practicing lawyer and a professor, and who now is a
       member of the WTO Appellate Body.
195
         See    list   of    courses    at   the    University     of    São    Paulo     Law     School     website,
       http://www.direito.usp.br/departamentos/internacional/disciplinas.htm.
196
      According to public data, around 20 PhD and masters theses have been written on trade-related matters at the
       University of São Paulo Law School since 1999 (See http://dedalus.usp.br).
                                                          51

In short, we see an increased interest in international economic law, paralleling the increased
competition for economic expertise in Brazil.197
In 2003, the new law school of Fundação Getulio Vargas (FGV) in São Paulo launched a post-
graduate WTO course which, for the first time, brought together trade law professors and
practitioners, many of whom had been instrumental in public and private WTO capacity-building
initiatives. They included Celso Lafer (law professor and former foreign minister and WTO
ambassador), Roberto Carvalho de Azevêdo (official who headed the dispute settlement unit),
Marcos Yank (agricultural economist at ICONE), Christian Lohbauer (who headed the
department of foreign affairs of the Industry Federation of the State of São Paulo, FIESP), José
Roberto Mendonça de Barros (economist and former government official), as well as private
practitioners, who also began to offer classes in trade law. Collectively the instructors specialized
in the different areas that the course covered, including the GATT, the Agreement on
Agriculture, the DSU, GATS and TRIPS. A team of four young entrepreneurial law professors
who had just come from studying abroad in the US and Geneva, coordinated the course, aiming
to offer a study of WTO law and jurisprudence that addressed issues of specific relevance for
Brazil and its economic sectors.
The FGV law school initiated other complementary projects in São Paulo to foster legal
education in trade law. In 2003, a first collective research project on textile trade was developed.
The researchers chose the textile trade because the sector was to be completely integrated into
the GATT in 2005, which could have significant effects for the Brazilian market and Brazilian
producers. The FGV law school funded the research, and the group discussed the results with the
Brazilian Textile Association (Associação Brasileira da Indústria Têxtil e de Confecção).
In 2004, two Brazilians working on WTO matters in Geneva fostered the formation of an
informal study group on WTO dispute settlement in Brazil (Núcleo de Estudos sobre Solução de
Controvérsias, or NESC), coordinated by a group of people linked to the FGV law school.198
The majority of NESC participants were either former interns at the Geneva mission or had (or
were pursuing) an advanced degree in trade law (a program we discuss below). Parallel
initiatives were created in Rio de Janeiro and Brasília, with former interns again taking the lead.
In this way, the interns continued to develop and spread the knowledge that they gained after
they returned from Geneva to Brazil.


197
      Dezalay and Garth, for example, find that economics became the leading expertise in South American states in
       the 1990s, replacing to some extent, law, although they also note the rise of business law. See, e.g., YVES
       DEZALAY & BRYANT GARTH, THE INTERNATIONALIZATION OF PALACE WARS: LAWYERS, ECONOMISTS AND THE
       CONTEST TO TRANSFORM LATIN AMERICAN STATES 30, 47-51 (2002). Here we likewise find a rise of interest in
       business law, but here, for the first time, in terms of international trade law.
198
      The two individuals were Vera Thorstensen and Victor do Prado. Thorstensen is one of the coordinators of the
       program at the Brazilian mission in Geneva. Since the 1990s she has worked in the mission to provide it with
       technical support on economic issues. do Prado is a member of the WTO secretariat and previously worked in
       the Brazilian Foreign Ministry, including regarding dispute settlement cases. At the WTO, do Prado was part of
       the rules division until he became Deputy Chef de Cabinet of the Director General Pascal Lamy in 2005.
                                                          52

The initial main task of the NESC São Paulo group was to prepare teaching materials on WTO
dispute settlement that could be used in trade courses throughout the country. The group
eventually wished to create an academic think tank specialized in trade-related issues, based at
FGV. It sought to bring together academics and private practitioners, who could also collaborate
with the Brazilian government when possible. Later that year, in July 2004, FGV helped
UNCTAD organize a dispute settlement course, UNCTAD having come to it because of the
reputation that FGV was building on trade issues.
Unlike the São Paulo project, the NESC groups in Rio de Janeiro and Brasília were not related to
any university, but were organized by former interns working in law firms. The study group in
Brasília included, in addition to lawyers and academics, officials from the Dispute Settlement
Unit of the Ministry of Foreign Affairs, from the Secretariat of Foreign Trade of the Ministry of
Development, Industry and Trade (Secretaria de Comércio Exterior), from the Secretariat for
International Matters of the Ministry of Agriculture (Secretaria de Assuntos Internacionais), and
from the Secretariat of Economic Law of the Ministry of Justice. The government officials
would suggest specific topics to be discussed, based on their experience, current needs and
priorities, which could help Brazil form its strategy for future WTO cases. Similarly, the group in
Rio de Janeiro is composed of former interns, some trade specialists from industry (mainly from,
Confederação Nacional da Indústria – the Federal Industry Confederation), others from
government agencies with headquarters in Rio (such as the standards agency INMETRO), the
Brazilian Development Bank, the Economic Research Agency (IPEA), and some economic
consultants.199
Other universities in Brazil followed suit, including Universidade Estadual de São Paulo,
Universidade de Brasília, Universidade de Campinas, and Universidade Federal de Santa
Catarina which integrated trade-related courses in their curricula, including specific courses on
the WTO, on trade and development, and on international economic relations. In parallel,
universities increasingly held conferences and special seminars on WTO and international trade
law, with the primary locations being São Paulo, Rio de Janeiro, Brasília and the major cities of
southern Brazil. Universidade Federal de Santa Catarina in Florianópolis, for example, now
holds an annual conference on Current Issues in International Trade (Temas de Comércio
Internacional em Debate).
From 2002 until 2004, there was a boom of activities in Brazil concerning international trade
issues, probably linked to the high profile WTO dispute settlement cases involving Brazil, and
the launching of the Doha negotiating round. As demand for professional expertise grew so did
requests for trade-related courses. The more that practitioners dealt with trade-related issues, the
greater their competence and interest in teaching courses in this area, and in participating in
                                        s n o ou . oa, n e ie n r l ot
                                                   l a
academic and policy-oriented seminar ad cl qi T dy ui rtsi Baism s     v si              z’


199
      INMETRO is the National Institute of Metrology, Standardization and Industrial Quality, within the Ministry of
       Development, Industry and Foreign Trade. IPEA is the Instituto de Pesquisa Economica Aplicada of the
       Ministry of Planning.
                                                          53

important cities commonly accept that a graduating law student should have at least a basic
knowledge of public international law and WTO law.
Since 2005, however, interest in international trade training courses has decreased, perhaps
reflecting the reduced ambitions of the Doha Round and the FTAA (where negotiations reached
                       t el e n r l i u el n at i , n h a t t
                         e      i         z’ s e tm
a standstill in 2004),h dcn i Baisd pt ste et cv y adt f thth         it            e c a e
                                                             200
Brazilian market can only sustain so many trade specialists. Specialized courses designed for
professionals charge higher fees, and the market has not supported them, so that the number of
international trade specialists remains relatively low. Yet although the market in Brazil for
WTO-related knowledge has its limits, it has developed significantly over the last five years, so
that expertise on trade matters, including dispute settlement analysis, is no longer limited to the
diplomatic realm. Brazilian academics continue to play an important role for the country in
following trade agendas, in mobilizing responses to developments in trade forums, and in
offering a contact point for professionals for the organization of courses, meetings and
conferences.


4.2.3      Coordination on trade matters through business trade associations
Those sectors of Brazilian business that were affected by international trade gradually
 e gn e i t 90 ad 00 t r od o h hlne psd y h pn g f r l
  o      z       e
r rai d n h 19s n 20so epn t t caegs oe b t oei o Bais
                                          s          e l                      e       n         z’
internal market and the growing focus on global markets in the context of an increasingly
legalized and judicialized international trading system. Brazilian business associations began to
coordinate to enhance their ability to provide meaningful input to the Brazilian government on
         ae ,n a i a n e t n o r l eo an oio n h
          ts          tu r
trade m tr i prcl i r ao t Baisngtt gpsi si t WT and the
                                   li           z’         ii          tn          e O
                                 r sr T . hy i d o n u c h oe et
                                  c
proposed FTAA and EC-Me ou F A T e a e t i l ne t gvrm n sm            fe          e        n     ’
determination as to which tariffs and trade barriers could be reduced in exchange for the
reciprocal opening of foreign markets. In particular, industrial and agricultural trade associations
worked to strengthen their alliances in order to coordinate their demands, a starkly different
situation than during the years of import substitution policies under the CACEX system
described in Part II, in which Brazilian business was only organized sectorally to obtain
government support on the one hand, and protection on the other.
The Summit of the Americas with its parallel meeting of the Business Forum in Belo Horizonte,
Brazil, in 1997 was the turning point, triggering the creation of an official partnership between
 r l n si n gi l r et s ne h r ln ui s oli Coalizão
   z’ d r l                 ct l o
Baisi uta adar u ua sc r udrt Baia B s esC at n(      e zi              n          io
Empresarial Brasileira, CEB).201 C B w sa “ s      n
                                    E a n i titutional novelty not only because it puts

200
      In 2006, fewer courses and conferences on international trade issues were offered. In addition, the NESC and
       GNC (described below) were less active in 2006.
201
      This was the third trade ministerial meeting launched by the Summit of the Americas process in Miami in 1994.
         a ga 1 o t o t el ao fh et g rv e,We e i d i
          a p              e n        a tn
       Pr r h 4 fh Ji D c r i o t m en poi s“ r e e wt interest the contributions for
                                                   e     i        d          cv         h
       the Third Business Forum of the Americas relating to the preparatory process for the FTAA negotiations, which
       we consider may be relevant to our future deliberations. We acknowledge and appreciate the importance of the
            e et ' o n i a ipt n n h T A rcs”
                  os e           s ti i              e               .
       privatsc r rlad tprc ao i t F A poes See Joint Declaration, Summit of the Americas
                                                           54

 o t r ie n sc r” r i i r l sc r r io frn r t rc ao
  g h … fr                  o, an            h z’
t e e d f et et s bek gwt Bais et a t d i s o i e s a i li ,o l a tn             t e tu t n
                                                                    202
 u a o eas t f ue n n s e t d eo aos
       s                  o                s     a
bt l bcuei“ csdo oei u:r engtt n. CEB brought together 166 ii ”
Brazilian business associations and enterprises under a single umbrella,203 including the Brazilian
Confederation of Industries (Confederação Nacional da Indústria, CNI), the Brazilian National
Confederation of Agriculture (Confederação Nacional da Agricultura), the Brazilian National
Confederation of Commerce (Confederação Nacional do Comércio), federations of industries of
different Brazilian states (mainly the Industry Federation of the State of São Paulo, FIESP),
unions of employers (such as Força Sindical) and specialized associations. The CNI has assumed
the leadership within CEB since its founding in 1997. Created in 1997 at a time when the
industrial sector was wary of the FTAA negotiations, while agribusiness wished to push for
greater market access abroad, CEB aimed to help coordinate common positions regarding trade
negotiating positions and to establish communication channels with the Brazilian government to
advance these views. For that purpose, CEB has promoted the exchange of views and
information among businesses and trade associations on trade matters, including through formal
and informal meetings among sectoral associations and federations, and a trade negotiations web
site that it created.204 It organized working groups on trade topics and prepared position papers
regarding negotiations, in general aiming to build private sector capacity on trade matters.
  ui t a t er i sy n gi l r r e s ii sa w l s r l l gs
     n e s n              s d r             ct la
D r g h l te ya ,nut adar u ua t d asc t n,s e a Baisa et     o ao           l       z’ r
companies, have created new departments and personnel positions focused on international trade
law and policy. The two main industry associations in the country, CNI and FIESP, have both,
since the 1950s, had departments on foreign trade policy that dealt mainly with tariff and anti-
dumping issues.205 By the end of the 1990s, they developed other specialized branches which
took a more proactive approach to foreign trade issues, focused in particular on new trade
negotiations. FIESP, whose members represent around 80 percent of the country's industrial
capacity, established a department on international trade relations (Departamento de Relações
Internacionais e Comércio Exterior) and CNI, the association that represents industries at the
national level, created the Unit on International Negotiations (Unidade de Negociacões
Comerciais). These departments in CNI and FIESP have hired professionals with international
policy backgrounds, primarily economists and those with a political economy background (in
international relations), but also a few lawyers. In addition, major companies in Brazil, such as

       Third     Trade      Ministerial    Meeting,      16     May     1997,     available at http://www.ftaa-
                                                                                  ( h dm ns f r ln ui s
                                                                                    t            zi
       alca.org/ministerials/Belo/Belo_e.asp. See also, HIRST, supra note __ at 35 “ e e ad o Baia bs es  n
        et s n l r rai t n bcm pr fh T A eo an poes .
           o        b          zi                 t e
       sc rad ao ogn aos ea e a o t F A ngtt g rcs )                  ii           ”
202
                              k gspa o …,t 5,
                                n
      Veiga, Trade Policy-Mai ,ur nt a18     e           .
203
       e C ne r ã ai a d Idsi A
                da            o              r,
      Se of e çoN c nl a núta “ Alca na visão da Coalizão Empresarial Brasileira” August 2003,        ,
       available at http://www.fiec.org.br/palestras/negocios_internacionais/alca190803/alcaCNI_arquivos/frame.htm.
204
      The frequency of these meetings has varied with the intensity of negotiations. CEB emphasizes the existence of a
       website that permits on-line consultation and virtual participation in the debates. See
       http://www.negociacoesinternacionais.cni.org.br/negocia/fp-
       negi.htm?URL=/negocia.nsf/web_negocia_html?openform.
205
      Telephone interviews and emails with FIESP and CNI, June 2006.
                                                       55

Companhia Vale do Rio Doce and Embraer, created special departments to address international
trade issues. In a number of cases, these companies have attracted trade specialists with previous
experience working for private trade associations in São Paulo.
Many of these associations and companies have hired former government officials, as
individuals have shifted between the public and private sectors in Brazil. For example, in 2005,
Mario Marconini, who worked at the GATT and the WTO from 1988 to 1996, and was
International Trade Secretary for the Ministry of Trade and Industry, and Deputy Secretary for
International Affairs in the Ministry of Finance in the late 1990s, became a consultant for FIESP.
Marconini is one of the few Brazilians that has worked in both the GATT and WTO
secretariats.206
Agribusiness associations, in particular, focused greater attention on trade law matters, hiring
trade consultants with experience inside the Brazilian government and abroad, and funding the
agricultural think tank, ICONE. The São Paulo Agribusiness Union on Sugar Cane (UNICA)
hired economist Elisabeth Serodio, who had been the manager of the CAMEX export program
for sugar and alcohol in 2000. She joined UNICA as a consultant in 2003, returned to the
government in 2005 as the secretary for international relations of the ministry of agriculture and
then rejoined UNICA in 2006. Similarly, both the Brazilian Rural Society and the Brazilian
Association of Producers and Exporters of Pork (ABIPEX) hired Pedro de Camargo Neto, who
was a former secretary of the ministry of agriculture.207 Camargo Neto helped to push and
  ori t r l sces l O o p i s gi t S o o ad C ua pli ,n h
        n e z’                f               at
cod a Bais ucs u WT cm ln aa sU ct n n E sgr o c sad e   n         t                      ie
worked, in particular, with Serodio and UNICA to support the sugar case, and the cotton sector
in bringing the cotton case. The prior experience of Serodio and Camargo Neto in government
facilitated their ability to work effectively with it in the public–private partnerships that resulted,
recalling the role of former US trade officials in private law firms and trade associations in US
litigation before the WTO.208


4.2.4      The emergence of think tanks, consultancies and civil society networks
Paralleling these developments, entrepreneurial individuals have created consultancies and think
tanks that have developed technical research capabilities to advise and assist the government and
private sector on international trade issues. These entities have been organized on a profit and
non-profit basis and generally maintain their offices in São Paulo or Rio de Janeiro, the two most
206
       e Ma oi ’ i tt :w wc s r/ m oet p o, m ci epr/s, e i 2 /
           c ns o   t/    s. c       / i c     s   tt v w d 7
      Se r n i b ah p /w . iog o pnn ot n o _s _xe sak i / , 4
207
      Camargo Neto was Secretary of Production and Trade in the Ministry of Agriculture of Brazil, where he was
       responsible for agriculture negotiations at the WTO, the Free Trade Area of the Americas, the MERCOSUR–
       EC Free Trade Agreement, and other bilateral agreements. Camargo Neto served as president of the Sociedade
       Rural Brasileira from 1990 to 1993 and founded and was president of Fundo de Desenvolvimento da Pecuaria
       de São Paulo (FUNDEPEC) from 1991 to 2000.
208
      See discussion in GREGORY SHAFFER, DEFENDING INTERESTS: PUBLIC–PRIVATE PARTNERSHIPS IN WTO
                        a….
      LITIGATION (2003),t
                                                         56

important economic centers of Brazil. They aim to influence and contribute to the positions of
the Brazilian government in international trade forums. Some leading examples of consultancies
organized on a for-profit basis are the Institute of Studies on Trade and International
Negotiations (known as ICONE), DATAGRO, and Prospectiva Consultants.
ICONE was created as a research institute in 2003, funded by eight larger agricultural trade
associations to provide technical support to Brazil in international trade negotiations affecting
agriculture. It was founded by Professor Marcos Jank, after he taught and conducted research in
the US at Georgetown University and the University of Missouri-Columbia, and worked for a
year at the Inter-American Development Bank (IDB). ICONE has closely followed and provided
significant support for the government as part of an internal Brazilian working group for
agricultural negotiations in the Doha Round, generating econometric analysis of the impact on
Brazil of different methodologies for tariff and subsidy reductions. In this way, it was
instrumental in helping to develop and advance the Brazilian position in the group of four (the
US, the EC, Brazil and India), which set a framework for the Doha Round agricultural
negotiations.209
DATAGRO provides general consultancy for the domestic and foreign sugar and alcohol sectors,
and specializes in statistical analysis. It was founded in 1984 and is coordinated by Plinio
Nastari. While ICONE has focused on agricultural trade negotiations, DATAGRO has provided
                                                                         EC
assistance in dispute settlement as well, and most notably in the Brazil– sugar dispute before
the WTO where Brazil successfully challenged EC subsidies and import restrictions affecting the
Brazilian sugar sector.210
Prospectiva Consultants, created in 2001, has become one of the leading business consultants for
trade and investment-related matters. It provides consulting both to Brazilian companies
regarding their international strategies, and to foreign companies interested in the Brazilian
market. It analyzes market access and market development strategies, provides analysis and
advice about trade negotiations and business strategies in response to their projected outcomes,
advises on the development of international supply chains, evaluates customs matters, and
provides economic advice in anti-dumping and safeguard cases.
In addition to private consultancies, many initiatives have been organized on a non-profit basis to
conduct research, organize symposia, and advocate on international trade issues, such as trade in
services, intellectual property, and the WTO dispute settlement mechanism. Examples include
the Brazilian Center of International Relations (CEBRI), the Institute on International Trade Law

209
           For    the      movement        of     the     G-4    on      the    July      Framework,      check:
       http://www.intracen.org/worldtradenet/docs/whatsnew/newsletters_2005/newslettevol6no9.pdf (accessed June
       2006). Access to examples of the work and analysis developed by ICONE is available at
       http://www.iconebrasil.org.br (accessed February 2008).
210
      See http://www.datagro.com.br/ (accessed February 2008). Interviews with officials in The Ministry of Foreign
       Affairs confirmed that DATAGRO provided important technical analysis in the EC-sugar cases, WT/DS266
       (Brazil as complainant) and WT/DS265, WT/DS283 (Brazil as third party). See details of the cases in Annex II
        “ a ln h
         B z        e O i t el n S s m )
                               p e tm
       ( r iit WT Dsu Ste et yt ”                e .
                                                          57

and Development (Instituto de Direito do Comércio Internacional e Desenvolvimento, IDCID),
the Brazilian Network for the Integration of Peoples (Rede Brasileira pela Integração dos Povos,
REBRIP), the Trade Negotiations Group (Grupo de Negociações Comerciais, GNC) and the
Law Society Study Center (Centro de Estudos das Sociedades de Advogados, CESA) of the
private bar.211
CEBRI, founded in 1998 in Rio de Janeiro, organizes activities that address international
relations from a broad perspective. The centre conducts studies and prepares analysis on
international issues, including trade, and organizes debates about them. Its leadership includes
important Brazilian public figures, such as Luiz Felipe Lampreia (former Minister of Foreign
Affairs) and José Botafogo Gonçalves (former Minister of Industry and Trade and Ambassador
to Mercosur). CEBRI is sponsored by the most important exporting companies in Brazil, such as
Companhia Vale do Rio Doce, Embraer, and Petrobrás, as well as by some international
foundations working in Brazil, such as the Ford Foundation, and the largest private law firms,
such as Veirano Advogados and Pinheiro Neto Advogados. It has commissioned numerous
r er pprass n Baisoe n relations policies.212
  s c          s ei
 e a h ae s s g r l fr g      z’        i
Academics have created research institutes and centers, such as IDCID (for law) and CAENI (for
political science) (Centro de Estudos das Negociações Internacionais), both organized at the
University of São Paulo, although individuals from other schools have also joined them. IDCID
  a c a d n 02 y rf os n r a hr th n e i ’l col
       ee                     s           s c s e v sy w
w s r t i 20 b poesrad eer e at ui rt sa sho aiming to build                     ,
legal capacity to address trade issues from a development perspective. IDCID has produced
research papers and organized conferences on dispute settlement, intellectual property and
services, focused particularly on the WTO. In 2005, IDCID hosted the official conference, WTO
at 10 –A Look on the Appellate Body.213 CAENI is a research centre that, since 2005, is
    c l i e o h n e i ’ o ta c ne ea m n t ok i
     il n               e v sy             ic
offiay l kd t t ui rt spli lsi c dpr et I w rswt a m l-
                                                    e           t .                    h      ui t
disciplinary research centre (Nucleo de Pesquisas em Relações Internacionais, NUPRI), which
has been at the University of São Paulo since 1989, addressing a broad range of international
 s ef
  s
i us rm scryt pli l cnm . ni pr n pro C E I r er fcss n
         o eui o o ta eoo y A m ot t a f A N ’ e a h oue o
                   t        ic                         a      t            s s c
South–  South co-operation strategies. IPEA, the governmental research institute, and the Institute
for the Integration of Latin America and the Caribbean (INTAL) within the Inter-American
Development Bank, help to fund its activities. The Ford Foundation also sponsors some specific
projects.214


211
      The NESC, listed among the academic initiatives in Section 3.3.1 also constitutes a study group formed by
       academics and lawyers aiming to examine and analyze WTO dispute settlement cases, could also be considered
       a sort of think tank.
212
      See CEBRI, available at http://www.cebri.org.br/.
213
      See IDCID, available at http://www.idcid.org.br/.
214
      For CAENI, see http://www.caeni.com.br; and for NUPRI, see http://www.usp.br/cartainternacional/modx/ (both
       accessed February 2008). INTAL is the Institute for the Integration of Latin America and the Caribbean. See
       http://www.iadb.org/intal/index.asp?idioma=eng.
                                                      58

REBRIP is a coalition of around 35 NGOs (including trade union and social movement
organizations), based in Rio de Janeiro, which studies the social impact of trade negotiations, and
in particular in relation to agriculture, trade and environment, intellectual property, services and
investment.215 Like the business sectors, REBRIP r r eta “ st i anvl ”n r i
                                                       ps s          n itn
                                                      e e n n i tu o l oey i Ba l      t         z.
Mobilized by the FTAA negotiations, Brazilian civil society organizations for the first time
                                                                   f ue s tl n r e
                                                                    o
created an institutional structure (REGRIP) which has “ csd esn ay o t d         e il            a
               216
negotiations.” It has been generally opposed trade liberalization initiatives, although there are
divisions within it which REBRIP aims to coordinate as part of a common position. REBRIP is
particularly active in debates over the effects of the WTO Agreement on Trade-Related Aspects
of Intellectual Property Rights on access to medicines in developing countries, and it has aimed
to mobilize civil society against the intellectual property chapters in regional trade agreements
under negotiation, in particular the FTAA and the EC-Mercosur FTA.217 With the Lula
government, REBRIP gained greater access to government officials as well as to international
 oa s E RP e e n t e w r n u d n r l dl ao o h T A eo aos
    ,                 p s av            e cd
fr a R G I r r eti s e i l e i Bais e gt nt t F A ngtt n  z’ e i               e              ii
                               218
in Miami in November 2003.
A group of academics and professionals created a research group on international trade law
matters in 2003 named GNC (Grupo de Negociações Comerciais). Coordinated by Vera
Thorstensen and Yank, the team is composed of practitioners, economists, former interns at the
Brazilian mission in Geneva, members of academia and business associations. GNC aims to
analyze specific trade issues that Brazil is negotiating, including regarding agriculture, services,
dispute settlement, trade and environment, anti-dumping, subsidy and safeguard rules,
intellectual property and competition policy. The group met once a month in 2003, and produced
a book consisting of 13 studies in 2005.219 It has another book about the Doha Round currently
under way [update].
An important means to institutionalize public– private coordination in WTO dispute settlement is
to facilitate exchange between Brazilian government officials and the Brazilian law firms that
have traditionally worked on transnational (largely inbound) commercial law matters. The Law
Society Study Centre, CESA, is an association that groups the largest Brazilian law firms, and is
based in São Paulo. In 2002, it created a new technical group on international trade consisting of
  nt r fr e a r io r r
     w          a w ct n s o r l l gr o m r a a i sSn 20,h
                                              z’ r
a e oko t d l pati e f m Baisa e cm e i l fm . i e 02 t           cl w r             c           e
group has prepared studies on international trade topics, and has coordinated meetings among

215
                           k gspa o …,t 6.
                            n            e
    Veira, Trade Policy-Mai ,ur nt a15Veira notes how Brazilian labor follows trade negotiations
largely through REBRIP. Id., at 164.
216
                              k gspa o …. 14
                                 n           e a
    See Veira, Trade Policy-Mai ,ur nt ,t 6-166, 172.
217
    The FTAA negotiations have resulted in greater politicization of trade policy within Brazil. See HIRST, supra
                                                t 0, o n t r a be os e b r r t poio
                                                           i he
     note __, at 30; and Hurrell, supra note __ a 13 nt g“ e hs encni r l gas o opsi d a e so s               tn
      n u n i iad r n t
        cd g h              o       e re a y”o h T A
     (i l i wt n n a ud h WokrPr ) t t F A . s t         e
218
                                      o …,t 6. h ol om ln i t nlao o sch
                                         e                     y  st i i i
    Veira, Trade Policy-Making, supra nt a17T e n fr ai tu oazt n fu consultation is
under Mercosur where the member governments created a Social-Economic Consultative Forum (Fóro Consultivo
Econômico e Social) to engage with civil society. Id., at 172,
219
    VERA THORSTENSEN & MARCOS JANK, O BRASIL E OS GRANDES TEMAS DE COMÉRCIO INTERNACIONAL (2005).
                                                            59

lawyers and government representatives to discuss trade issues, including the role of the private
  a i r e n n Ba l cm e i n r t n n r t nlr e isputes.220 CESA played
         ps i          z’             c l te s
brn er et g r is o m r ai e s i i e aoat d d            tn i       a
a central role in what was a turning point in Brazilian private law firm engagement with WTO
rules and policy. In August 2002, it organized a conference in Rio de Janeiro on general trade-
related issues, which was the first large-scale event in which Brazilian public and private actors
examined the possible synergies of working together in WTO dispute settlement.221 At the
conference, private lawyers complained that only foreign law firms were being hired to assist the
Brazilian government in WTO disputes, with the Embraer case being a clear example. Brazilian
officials responded that the government did not select the private firms, since that decision was
  ae y h r a a i h a h i ’ e l e . h oe et e e n
             e v e ts                   d e r           g e
m d b t pi t pre w opi t fm sl a f s T egvrm n r r etatives                n         ps
emphasized the importance of developing local capacity within the private bar, which the
 oe et ol e o eT i n r t n vn ay e o h r t n fh oe et
      n           d c             s ta i
gvrm n w u w l m . h i e co eet l l t t c ao o t gvrm n s
                                                     ul d         e ei            e       n     ’
internship programs for private lawyers in Geneva and Brasília which CESA co-sponsors,
examined in section 3.3.5 below.
Other similar conferences bringing together government officials and private Brazilian lawyers
and business representatives followed. For example, in November 2002, the Brazilian Institute of
Studies on Competition and Consumer Affairs (IBRAC) organized its first conference dedicated
to international trade issues, which brought together lawyers, economists, academics and
Brazilian officials.222 The institute has organized this conference annually ever since, which has
attracted increasing interest from private practitioners.223 In 2003, the institute formally added
international trade to its activities, and changed its name to the Brazilian Institute of Studies on
Competition, Consumer Affairs and International Trade, reflecting a position that one should no
longer think of competition and consumer affairs matters in Brazil without taking account of
international trade. The ministry of foreign affairs itself followed up these events by organizing
its own meeting in Brasília in March 2003, aiming to create further incentives for the
development of local capacity and the spread of knowledge about dispute settlement issues
within Brazil. The meeting again included legal practitioners, economists, government officials
and academics. Building from these initiatives, the Ministry established in 2003 its internship
program for private lawyers at the Brazilian mission in Geneva.

220
      For detailed information about the work developed, see CESA, Relatório das Atividades 2004, São Paulo, (2004),
       available at http://www.cesa.org.br/com_apoio_rel.asp. Since March 2002, a study group formed by 25 lawyers
       of the largest Brazilian law firms was created to develop studies on trade issues (Cesa realiza estudos sobre
       comércio, VALOR ECONÔMICO, July 28, 2003).
221
      The meeting was organized by CESA at the Brazilian Development Bank, Rio de Janeiro, in August 2002. About
       200 hundred people attended the event.
222
      BA i     s o-governmental association of about 500 corporations, law firms, and individuals (lawyers,
      IR C “ ann
       cnm s , n cdm c n)n r t n h rm t n n ee p et f o pti a n o c.
               t                i       te e
      eoo isadaae ias i e s di t po o o addvl m n o cm et nl adply
                                              e       i            o                 io w             i ”
                                                                       3 20)n 1. e l B A ’
                                                                                   1
      OECD, COMPETITION LAW AND POLICY IN BRAZIL: A PEER REVIEW 11(05, . 6 Sea oIR Cs         s
      website at http://www.ibrac.org.br/.
223
      In the first year of the conference, in 2002, there were about 40 participants, while in 2005 that number increased
       to almost 90.
                                                          60

Today, these various groups can be viewed as components of a small Brazilian epistemic
community specializing in trade matters. Individuals can be members of more than one group,
and they can coordinate with each other. A lawyer that has been on an internship to the mission
 n eea dsr e et cu a ipt n E A s et g a r
                  i        )      d ti e
i G nv (ec bdnx , ol prc a i C S ’ m en ( a e                   i s presentative of a law
firm), in GNC and in NESC (on account of an academic interest), as well as in CEB meetings (to
 n r t i ui s l e )A a e l t e rus m m e a o
   ta       h     n      a s            st e
i e c wt bs esedr . s r u ,hs gop’ e br m yc-sponsor and attend      s
 ah t r eet f lan h rusinteraction. These groups, in turn, link with academic
        h’         s cit g e
ec o e s vn ,aiti t gop’
developments in Brazil. Professors are leaders of, and active participants in, many of the groups,
and practitioners often speak in courses and academic colloquia organized in São Paulo and, to a
(much) smaller degree, elsewhere in Brazil.224
These groups and individuals also form part of transnational epistemic and NGO networks. The
heads of ICONE and CEBRI have close ties with participants in the international trade field
around the world. Members from GNC have worked with the International Centre on Trade and
Sustainable Development (ICTSD) and the United Nations Conference for Trade and
Development (UNCTAD), based in Geneva, on events and publications concerning WTO
dispute settlement, competition policy, intellectual property and other trade-related matters.
REBRIP has worked closely with Doctors Without Borders and Oxfam on intellectual property-
related issues, as has IDCID. The Ford Foundation has helped to fund the work of both of these
organizations, as well as that of CEBRI and CAENI. In being linked to international networks,
these groups are better informed of developments abroad and better able to provide perspectives
and analyses grounded in the Brazilian experience to international policy and legal debates.
 A e a oc ds t T A eo aos r gr t
        i        u       e
[ sV r cnl e, h F A ngtt n tge d“ em b i t no c i sc t
                                         ii                           lao
                                                   i e h oiz i f i l oiy            v       e…
[which] reached new heights and imposed a set of new mechanisms for consultation and
dialogue between State and civil society, a process pioneered by the business sector, followed by
  G s 225
       ”
N O . The result was a relative increase in the amount of transparency afforded these
 rusad “os t t n t r t i rf ao ad i e i ns fh hne f
                    sn e          w d e v si i
gop,n a cnietr d o a sh d e ict n n ‘ t s eeso t canlo           nnv          ’     e         s
consultation and position-building between the State and different groups of civil society in the
a a fr e eo aos 226]
  e      a
 r o t d ngtt n.  ii ”

4.2.5      Public–                       h         l       t
                                      wt n rz’Miir o F ri f r
                  Private Partnerships i i B ais ns y f oe nAfi : The  g    as
           Internship Program at the Brazilian Mission in Geneva and its Counterparts
Since September 2002, the Brazilian mission in Geneva has organized a four-month internship
program in Geneva for young Brazilian professionals who have pursued (or are pursuing)


224
      Initiatives outside of São Paulo are less developed. Study groups on dispute settlement (NESC) have been formed
        n i e ae o n n r l. h U i rt f r l hs “ r N gtt n or t h h t a
                        r            si             v sy
       i Rod Jni adi BaíaT e n e i o Baía a a Tae eo ao C us” ow i ihs
                                                                 si             d         ii         e       c
       invited some of the experts from São Paulo as lecturers, with the same occurring in Campinas and in other cities
       in São Paulo state. Campinas, for example, is located 80 miles northwest of São Paulo.
225
                                        o …,t 7.
                                         e
      Veira, Trade Policy-Making, supra nt a13
226
      Id.
                                                            61

advanced legal studies in WTO law.227 The interns are all privately funded, typically by the
Brazilian law firms that employ them. This program was developed out of a joint effort of public
officials and private law firms to increase knowledge of WTO matters in Brazil. Public officials
and the private sector found that they had overlapping interests, since the government could
benefit from having qualified local lawyers available, and Brazilian practitioners could learn in
Geneva about WTO law and dispute settlement in order to better market themselves to Brazilian
firms, trade associations and the government to act as consultants, whether involving the
identification and analysis of potential claims, the litigation of actual claims, or in settlement
negotiations. Until this time, only foreign law firms had assisted the Brazilian government and
business before the dispute settlement system, and Brazilian law firms wished to build their own
 xe i I hr h uh h n r h , r l i i ol e ee al o oi r
      te            , r          e tn p
eprs.nsott og t i e si Baism s o w u b btr b t m n o
                                                   z’        sn         d      t     e         t
developments in WTO dispute settlement and respond to the demands of WTO filings, while
helping to build local Brazilian capacity in international dispute settlement.
The program was established with the support of the Ambassador of the Brazilian Mission in
Geneva, Luiz Felipe de Seixas Corrêa, who coordinated the program together with Vera
Thorstensen. The associations of CESA and IBRAC were responsible for proposing
candidates.228 As a condition for participating in the program, the individual intern (and where
applicable, the law firm), signed a confidentiality agreement with the government. During the
 n r h ,h r a a e t
  tn p e v e w                   o l e f bec r h fc n r l h i i s
                                         a
i e si t pi t l yroka ev o asnef m t of ei Bai T em s o’  o e i                z.          sn
staff organized a training program for the interns in Geneva to prepare them for WTO meetings
that they would attend and for disputes on which they would provide assistance.229
  ui t rga sith e er a fh n o 20)aot 0 a e a prc a d
     n e           m r r              s s       e
D r g h por ’fst e ya ( o t ed f 06,bu 4 l yrhd a ipt                       w s           ti e
in the Geneva internship program, involving lawyers from more than 30 Brazilian law firms. In
       t er n r cm f
             , tn
the firsya i e s a e rm Baisa eta fm l a d n ã Pu ad rn i d
                              o r l l gsl i so t i So al n/ i Ro e
                                     z’ r          w r        ce                o     o
Janeiro, but gradually a few firms from other parts of the country, such as from the northeast and
the south, became interested and some participated. Since the beginning, government
representatives from other ministries also joined the program (involving around ten government
interns through the end of 2006), in order to increase general knowledge of WTO law and
dispute settlement throughout the government. As from 2005, industry associations (such as
FIESP and CNI) have also sent individuals who have international policy portfolios.230 Although

227
      Vera Thorstensen has played a key role in supporting and coordinating the internship program and is normally
       seen as the contact point at the mission for the traineeship program. Thorstensen, previously an academic, is
       known for pushing the trainees to conduct research on trade issues when they return to Brazil.
228
      See supra notes __ and __, and accompanying texts.
229
      The diplomat in charge of dispute settlement at the time of the first groups, Celso de Tarso Pereira, taught courses
       and organized seminars on WTO issues, in order to prepare the interns for WTO meetings and inform them
       regarding current trade disputes.
230
       The program was initially conceived to train lawyers. However, individuals with international policy
       backgrounds, such as economists and those with a political economy background, expressed interest in
       participating, and they have been included on an ad hoc basis.
                                                           62

the diversity of participants has increased, and some expertise is spreading beyond São Paulo, the
majority of interns work for law firms based there, probably because only these firms have
 os e d h ot f n s n t e ot h e a ã al s r l i ni ad
     de e                   v m                   h l
cni r t cs o i et et ob w r w i, sSoPu i Baisf ac l n                   o       z’ n a
industrial capital.
The program in Geneva seemed to work well for the Ministry, which spurred the Dispute
Settlement Unit to create its own internship program in Brasília in 2004.231 Some interns in
Geneva have returned to work as interns in Brasília for an additional four-month period. Other
interns continue to work on WTO cases on a pro bono basis. To give a recent example, former
  eean r hl d o e a h n df e r l sa g i r os t t Cse eto
          tn p            s c
G nv i e s e e t r er ad e n Bais t t yn epneo h E ’r usfr
                                        i      z’ r e             s          e        q
 oslt n e e h
       ti         o    e
cnu aosbfr t WT r a i Baisbno t i pr t no r r ddte
                              O e r n r l a n h m oti f e e e i s
                                 g d g z’                     e        ao        ta        r
(WT/DS 332).232 Since the affected private sector did not hire a law firm to assist the
gvrm n t i e sw r w s a i l l vl d
 oe et h n r ’ ok a prc a y a e.
      n , e tn                       tu r       u 233
The internship program in Geneva was a model for an analogous program that the Brazilian
Embassy in Washington created in 2003 to develop capacity regarding US anti-dumping matters.
Its aim is to help Brazil ensure US market access for Brazilian products. Since US anti-dumping
law must conform to the requirements of the WTO anti-dumping agreement, Brazilian officials
and interns will be better prepared to litigate these cases before the WTO or attempt to settle
them in the shadow of a potential WTO complaint. Statistical evidence reveals that lower income
developing countries fare far worse in US anti-dumping proceedings than do developed country
defendants, probably because they are less able to defend themselves in these US proceedings.234
Around five interns have served the Washington embassy as of the end of [2006].
Brazilian law firms also recommended that the department in charge of applying anti-dumping
and safeguard measures in Brazil (Departamento de Comércio Exterior) create an internship
program in Rio de Janeiro. They hoped to increase their knowledge in this area, both to develop

231
      The Brasilia program has had six interns as of June 2006.
232
      The EC actually started informal consultations in 2003 in the context of its own internal investigation of the
       legality of the Brazilian regulations. On 23 June 2005, the European Communities initiated consultations, and,
       on 17 November 2005, requested the establishment of a WTO panel (DS332), to determine whether various
       Brazilian measures on imports of retreaded tires are compatible with Articles I:1 (most favored nation clause),
       XIII:1 (non-discriminatory administration of quantitative restrictions), XI:1 and III:4 of the General Agreement
       on Tariffs and Trade, 1994. The investigation was initiated following a complaint by Bureau International
       Permanent des Associations de Vendeurs et Rechapeurs de Pneumatiques (BIPAVER), dated 5 November
       2003, on account of allegedly adverse trade effects suffered by the European Communities retreaded tire sector
       resulting from a Brazilian import ban on foreign retreaded tires.
233
      Source: diplomat from the Brazilian Dispute Settlement Unit at the Ministry of Foreign Affairs (São Paulo,
       February 2006).
234
       hs cute a oei l o ea e d l l e
                rs e          ky        r e s ky
      T ee on i “r m r l e t b t gt ,esi l to settle cases, more likely to confront high dumping
        u e ad e l e o r g ae t t
          i       s ky       n           e O” hd o nB r r ok a & al O dnThe
                                                                nd
       dts n l si l t bi csso h WT .C a B w , e a H em n C g r ze, Pattern        a
       of US Antidumping: The Path from Initial Filing to WTO Dispute. 2: 3 WORLD TRADE REV. 349-371
       (November 2003).
                                                            63

their domestic practice and (potentially) to work on these cases if they are brought to the WTO.
Some Brazilian attorneys have, on their own initiative, explored the possibility of working with
US firms in the United States on anti-dumping matters that involve Brazilian products. US law
firms can train Brazilian lawyers in this subject area, as well as in US approaches to law and
litigation. Since WTO law in this area tends to reflect US statutory law, and since WTO
jurisprudence tends to reflect US common law reasoning (from facts and judicial precedent)
more than a Brazilian civil law approach, these lawyers can, in the process, become better
prepared to assist Brazil and Brazilian business in WTO-related matters.235
  r l ee p et f e l aai a, f or b sd o m ee ces o r l
    z’         o             g         t
Baisdvl m n o l a cpcycn o cus, eue t i pd acs t Bais  e                                      z’
internal market as well as to pry open foreign markets. To a large extent, the law firms that have
been investing in building internal capacity for WTO issues are also those that wish to be
involved in anti-dumping or safeguard proceedings within Brazil.236 Lawyers can increase their
trade work by identifying and pushing domestic anti-dumping cases, which both allow for
training in trade law and, more importantly, provide a financial incentive to remain involved in
trade issues. Anti-dumping cases can also attract the interest and awareness from the business
community to trade issues, especially since they allow for more immediate and effective
remedies than a WTO case. Anti-dumping work is a way for lawyers to be known in the
business community for trade-related expertise.
These internship programs are evidently costly for Brazilian law firms, which also permit the
interns to continue to work on a pro bono basis for the government on WTO cases after they
return.237 Sometimes these lawyers have even flown back to Geneva to observe the panel and
Appellate Body hearings after the internship is completed. These firms took a longer-term view,
hoping that the experience will provide them with business in the future. Local Brazilian
capacity in WTO law and dispute settlement has been developed, and Brazilian lawyers are
better situated to advise companies and to work with the government on WTO and other trade-
related matters, as a consequence. Some Brazilian lawyers have already been hired to handle
issues related to WTO disputes after returning from Geneva, as in the EC-banana arbitration
procedure (of 2005) and in the tires case, in both cases working for the private sector.238 One
Brazilian lawyer from Veirano Advogados, a major São Paulo-based law firm, who studied law
in the US and practiced with a large, experienced US law firm, was hired by the poultry industry

235
      See Shaffer, The Challenges of WTO Law, supra note __.
236
      Economic consultancy firms are an alternative for dealing with anti-dumping and safeguard cases, but it appears
       that, during the last years, law firms have become relatively more involved in Brazil, in response to the
       legalization of trade matters.
237
      Firms and individuals are likely investing in the expertise and status that comes from conducting a WTO-related
        n r h n eea O n sn n h i e aoa s
         tn p                        v i           e nr i ”                   en o u
       i e si i G nv. ni et gi t “ t nt nl a am ast bi domestic social capital, see      ld
       DEZALAY & GARTH, supra note __. Where individual interns come from wealthy families, they can supplement
       the expense of living in Geneva during the internship.
238
      In the bananas arbitration case, the law firm represented the Brazilian banana sector. In the EC-tires case, the law
       firm worked for a retreaded tire company.
                                                           64

 o e h r ln oe et e n r l i e s i h w oly ae t Ba l
     p e zi              n         e
t hl t Baia gvrm n df dBais n r tnt topu r css ht r i
                                           z’ t e            e t a z
                                                         239
brought before the WTO, which we discussed in Part III .
Overall, international trade law-related work has developed in Brazil. Brazilian lawyers can now
work for industry to identify trade barriers, evaluate potential WTO complaints, initiate them,
and prepare defenses to foreign challenges against Brazilian regulations that protect industry. For
Brazil, even if these lawyers do not work on actual WTO cases, they retain knowledge about the
system which can be of use. They can help to advise clients when they have a potential WTO
 aead r g h ae o h oe et aet
              n e              e       n    ’ t i
cs,n bi t cs t t gvrm n s tn on. Moreover, since most trade disputes are
settled, the perception by other WTO members of greater Brazilian capacity in WTO law can be
of use in settlement negotiations conducted in the shadow of a potential WTO proceeding.


      V. THE LIMITS OF THE BRAZILIAN APPROACH FOR BRAZIL AND OTHER
           DEVELOPING COUNTRIES; SOME FUTURE CONSIDERATIONS
5.1. The Limits of the Brazilian Model
  r l sces l s o t
    z’          f            e O i u el n ss m a dsr d ta e tn o.
                                       s e tm
Bais ucs u ue fh WT d ptste etyt hs ee el ar t aet n         e            v y tc d t i
Its Foreign Ministry has dedicated top-level civil servants to WTO affairs, and private law firms
 udd y r l r a et ae en sd o e a e rai n r n t
                z’ v e           o
fne b Baispi t sc rhv be ue t hl gt r ogn eadpeet h           p h,            z           s      e
  ees y a n a m n t n o r i n o e fh
       a      a
ncs r dtad ru eti t pea i sm o t WT ’m scm l d pt ,uh
                      g      ao          vl                e O s oto p x i u ssc e s e
as the US-cotton and EC-sugar cases. As a result, the Brazilian approach to public–        private
coordination on WTO matters is of clear interest to other WTO members. Yet one cannot simply
 i r l r av ucs t h pc its ft m dl s h on ys xperiences in
  e z’ li                         e
t Bais e t esces ot seici o i “ oe”a t cut ’ e
                                         f ie          s       ,       e      r
WTO dispute settlement have resulted, in large part, in an ad hoc manner, depending on certain
entrepreneurial individuals in some cases, and the receptivity of the affected private sector to
fund complementary legal support. Although the Ministry of Foreign Affairs has created a
 pc le i t el n U i Ba l m dl f ul–
     az         p e tm               t z’               ”
seii dDsu Ste et n , r is“ oe o pb cprivate coordination has not i
been institutionalized, and even if it were, there is no guarantee that it would remain so in the
future.240
                  e d ty u br f pc i i ti s h t r ln t e ia
                      ei                          f m ao
In this section, w i n f anm e o seicl it n t th Baia “ r p l ”   a e zi h e lr
approach faces – and, in particular, the continuity of government personnel in a system based on

239
       n e s e . . at o r i d i ’ l n
              e               a      cc
      A aT r ad S L C e n pate wt O Me ey& Myr f m 19 t 20, n w re wt G r
                                               h       v             s o
                                                                   e r 98 o 01 ad okd i a            h y
      Horlick, a highly respected expert in international trade law. See OMC distante das bancas brasileiras,
      COMEXNET, August 9, 2002.
240
   Veiga makes the same finding in respect of public-private interaction over the formation of trade policy. He
  re,dsi t i rf ao o t hne f io e n p
   t           t e v si i                  e         s      ag
w is“ep eh d e ict n fh canlo d l u ad articipation, the great majority of these are still
not institutionalized: civil society is invited by the State, which defines the actors to be invited, the occasions for
                                                                                         g,n s o. eut r o s
these invitations, the convenience of circulating information pertinent to the meetinsad o n H fr e nt  ”       h       e
how CEB has recurrently proposed procedures for business sector participation in trade policy-m k gbtt s   n
                                                                                                        ai ,u “ ee  h
 f r ae ee l o n fr agvr eto m t nt t rpsd rcdr ” e aTa P ly
  f s                 d                       n
e othv nvre t ay om l oe m ncm i eto h pooe poeue.V i , r e o c-
                                                              m        e                      s       g      d     i
                  o …,t 7.
Making, supra nt a18e
                                                         65

diplomatic rotation within the Foreign Ministry; the ability of industry to fund private lawyers,
especially for complex cases such as the cotton and sugar subsidy cases; the handling of cases of
systemic importance that the private sector will not fund; and the management of private law
firms funded by the private sector where public and private interests do not fully coincide.
As for most WTO Members, a first challenge is to ensure that government officials with
appropriate expertise are assigned to handle WTO dispute settlement matters. According to the
  oe n n t ’t d i
      i      ir a t n
F r g Mi sysr ios, diplomats are trained to have broad-based knowledge, and move to
different posts every two to three years. There is thus a strong chance that once diplomats are
trained in WTO dispute settlement, they are moved to other posts and replaced by others with
little to no knowledge of the technical complexities of WTO law and dispute settlement.
Moreover, officials within the Foreign Ministry are divided as to whether specialization (as in
WTO law) is to be preferred to more general knowledge. Individuals who wish to rise within the
civil service can face career incentives not to specialize. Although the Foreign Ministry has, to
some extent, attempted to keep diplomats interested in trade matters by assigning them to posts
with a similar orientation,241 this is not a rule, and individuals may seek to broaden their
experience specifically to enhance their careers within the ministry. No matter how bright new
diplomats assigned to WTO dispute settlement, and how fast they learn, WTO dispute settlement
dynamically changes and involves considerable technical complexity, so that countries such as
Brazil, who assign WTO matters to the Foreign Ministry with a system of diplomatic rotation,
can be disadvantaged, unless they foster specialization within the ministry.
A second constraint that Brazil, as many other countries, faces is whether its private sector can
afford, or is willing to pay for, a law firm to assist the government in a WTO case. Sectors
composed of relatively small producers often face collective action problems to coordinate and
 olh ees y e uc t ud pi t a i ’ as t c. vn n h a u ct n
        e       a s e                      ve w r
po t ncs r r or sofn a r a l fm s s s neE e i t f os o o     ia                 e m           t
case, the cotton trade association (ABRAPA) allegedly almost dropped the case due to budgetary
                                         U a i ’ l le frh ae ol a e r
                                               w r        g e           e
constraints. Once it was evident that the Sl fm sea f s o t cs cu r g f m           d n o
around 1 million USD to 3 million USD, there was concern that the association would not be
able to pay them.242
Third, Brazil may have potential complaints that are of great systemic importance for the
Brazilian economy, but it cannot pursue them because the private sector is less interested in
funding supplementary law firm assistance, and the government itself does not have sufficient
personnel with the requisite legal knowledge. Systemic issues could have larger impact over time

241
      For example, Celso Almeida Pereira, who was in charge of dispute settlement in the Brazilian mission in Geneva
        o aotor er l th i i n eeao ok n r l e bs n tw , aaaThe
                           se e sn                                   z’
       fr bu fu ya , ft m s o i G nv t w r i Bais m as i Ot aC nd. Ministry of  y       a
       Foreign Affairs replaced him with an individual who had worked in the Dispute Settlement Unit in Brasilia for
       four years, Nilo Ditz. Continuity was thus assured. Similarly, Roberto Carvalho de Azevêdo, who led the
       Dispute Settlement Unit, was appointed to be the Director of the Economic Affairs Department (Departamento
        e s t E oô i )n D cm e 20]Fá o r a s e zvd’ fr e ps h i u
              uo                o
       d A sn s cnm cs i [ ee br 05. l i Ma g asm dA eêos om r otT ed pt
                                                           v       e       u                            .       s e
       settlement unit is within the Economic Affairs Department so that Azevêdo will oversee its work.
242
       e spa o ….
      Se ur nte
                                                         66

than industry-specific cases, so that the country could be prejudiced if it does not have sufficient
 n r l e uc vib o h . r l e gn ao f t i sy i n r h
  tn       s e
i e a r or saaal frt m Baisr rai t n o i m n t , t i e si
                        l e           e       z’ o          zi           s ir s t n p
program and its recent bid for private law firm assistance, all point to ways in which the country
is attempting to respond to this challenge.
Fourth, even when the private sector provides financial support for the hiring of an outside law
 i ,h r a et ’ n r t a o ci i i h oe et e et n f h
  r     e v e o s te s
fm t pi t sc r i e s m ynt o c ewt t gvrm n spr p o o t
                                                    nd        h e        n     ’ c i               e
public interest. If private lawyers take the lead in a case and the government does not sufficiently
monitor the arguments made, some of these arguments could be used against Brazil in a later
case. Moreover, there may be divisions within the Brazilian private sector, so that only that
portion of the private sector with the means to fund the lawyers is being represented. Although,
in our view, it makes sense for Brazil to work with private attorneys to enhance its capacity to
address the complexities and demands of WTO dispute settlement, the country needs to ensure
that it has technically astute personnel monitoring and, where appropriate, modifying the
arguments prepared by the private counsel in the legal submissions.
Similarly, when settling a case, which is the result of most WTO litigation, there is a risk that
Brazil could settle in the interests of a specific commercial sector in a manner that constrains the
 on ys b i o e n h n r t f
      r       ly         e      e te s
cut ’ ait t df dt i e s o other commercial sectors, or of its broader national
interest. For example, in a case involving soluble coffee, Brazil initiated a complaint against the
  C e r n h Cs rv i f nacd a f r e ne fr xot sr 3 ee p g
      gdg e                    sn                   rf f e
E r a i t E ’poio o ehne t i pe r cso epr rf m 1 dvl i                      e o               on
        e i l i A da cute i odr t o bt rg rdco ad r f k g t
         snun                        rs                o
countri ( c d g nen on i )n re “ cm adu pout n n t fci ”ht                 i         ai n         a
  e vr n bv h Cs om l r e ne yt o ee p g on i h
    e                        e
w r oe ad aoe t E ’ nr a pe r c ss m frdvl i cute,t fe         e              on           rs e
                                                   243
 G nr i d yt
        az          e f r e ne” G P.
                                fe
“ ee le S s m o Pe r cs ( S ) In settling the complaint, the EC agreed to
increase the import quotas for the Brazilian soluble coffee sector and Brazil agreed to refrain
 r ut r hlni h set f h Cs S rga S c
  o        h       l n i
f m fr e caeg gt sapc o t E ’ G Ppor . uhaste ethw vr
                                               e                  m              tm ,
                                                                               el n o ee           ,
                                                                   am g b a et b t Cs
                                                                          h     f e
could conceivably constrain Brazil in defending other sectors tht i t e f c d y h E ’        e
 r e ne, n t a xln h r l a ol t r a y n ni s hlne o h e
   fe                          a            z
pe r csadim yep i w yBaiw s n a h dpr i Id ’ caeg t t s  y i        t        a        l          e
preferences in EC –   Conditions for the Granting of Tariff Preferences to Developing Countries,
which was of great systemic importance for Brazil and developing countries generally.244
Although Brazil faces constraints in mobilizing legal capacity for WTO dispute settlement, the
constraints are much greater for smaller and poorer developing countries. Brazil has an
internationally renowned professional bureaucracy which has developed technical expertise on
WTO matters. Even within Latin America, Brazil is traditionally known for the relatively
 sogrn i t nl aai fh r ln te 245 r l r avl r e aacity for
   r        st i            t       e zi a .
“t ne i tu oa cpcyo t Baia s t” Bais e t e get cp            z’ li y a r
243
      See WT/DS154, EC –Measures affecting differential and favourable treatment of coffee, 7 December 1998;
       WT/DS209, EC –Measures affecting soluble coffee, 12 October 2000. The relevant EC GSP Regulation,
       covering GSP schemes from 1 January 2002 to 31 December 2004, was Council Regulation 2501/2001.
244
      See WT/DS246/R, EC –Conditions for the Granting of Tariff Preferences to Developing Countries –Report of
       the Panel; and Appellate Body Report, WT/DS246/AB/R, EC – Conditions for the granting of tariff preferences
       to developing countries, 7 April 2004.
245
      See, e.g., SIKKINK, supra note __, at 21–22.
                                                           67

    O i u el n i e e i f h e t e m ot c f r l cnm n
         s e tm                    f co          e li
WT d pt ste et sar l t no t r av i pr neo Baiseoo yad              a          z’
trading profile, even though Brazil represents less than 1 percent of global trade.246 Smaller
developing countries face much greater challenges and reduced incentives (on account of their
smaller trade volumes) to organize a specialized unit for WTO dispute settlement. For poorer
countries, the opportunity costs of investing in capacity building for WTO disputes are relatively
greater, because they will have fewer cases to bring, and they face more immediate demands for
the funding of basic human needs. Brazil, of course, faces these opportunity costs as well, but it
has a larger national budget to allocate.
 n dio bcue f r l s ei i si
       tn                   z’ z t d r s
I ad i ,eas o Bais i , snute tend to be relatively larger, and thus relatively
better able to fund lawyers for WTO dispute settlement. Because of the importance of the
  r ln a to t d n n s n r l l la i s l e o e i e n
    zi         k        a          v m , z’ c w r
Baia m re frr eadi et etBais oa l fm a ot dt b b grad                    s n             g ,
thus better able to fund young attorneys for an internship in the mission in Geneva, or the
 on ys m as n si t .n r i l w e e br fh S oge epe e
      r           y          no
cut ’ e bs i Wah g n It et g , hnm m e o t U C nr s xr sd
                                       e sn y                    s       e            s       s
concern that the successful Brazilian cotton complaint could lead other countries to challenge US
agricultural subsidies, some analysts responded that there was little to fear. They concluded that
 h e i d e le w u ost e a u h ipoi t e o t or aosh sf r
  e qr g e                  d       it
t r u e l af s ol cntu “ sm t ts rh iv frh po nt n t tuf
                                                   a        bi            e        i      a     e
                                               247
 h ot a r ha sbi z i pr.
  e          m o
t m shr f mcep us i d m ot”     de           s
WTO dispute settlement continues to require increased specialization. The common law
orientation of WTO jurisprudence, with its factual contextualization and use of precedent, poses
a challenge to those who practice in a different legal culture, including Brazilians. Over the last
years, there has also been an increasing demand for econometric expertise for WTO dispute
settlement.248 The more econometric studies are used, the more that this expertise needs to be
built, resulting in yet greater costs for using WTO dispute settlement. This trend explains why
Brazil has had to adapt its approach to WTO dispute settlement once again. Other developing
countries, however, are less likely to have trained econometricians locally available for these
tasks, just as they are less likely to have local lawyers with the relevant expertise.


246
      Brazil's gross domestic product was over 604 billion USD in 2004. Brazil has the fourteenth largest economy (in
       terms of gross domestic product, when counting the EC and all of its member states as a single entity), and it is
        h ih a ete i r i t ol F rh
         ef r            rt          e      d
       t ft l gst roy n h w r . o t Wol B n’i o e l si t n seh w b i aaala
                                                      e r aksn m c s f ao,e t e se vib t
                                                            d          c       a ic i           e       t       l e
       http://www.worldbank.org/data. However, Brazil also ranks as a lower-middle income country under World
       Bank criteria, having a per capita gross national income of USD$3,000 in 2004. See World Development
       Indicators 2006 accessible at http://siteresources.worldbank.org/DATASTATISTICS/Resources/lac_wdi.pdf.
       The country also has high levels of income disparity and poverty. According to the Human Development
       Report, Brazil ranks in the 63rd position, as per Table 3 (human and income poverty: developing countries). See
       Human Development Indicators accessible at http://hdr.undp.org/reports/global/2005/pdf/HDR05_HDI.pdf. Cf.
                                 Ba l hs h ol w lh a et rs dm sc rdc ( D )dop g r
                                    z           e      d     f r
       Hurrell, supra note __ (r i“a t w r te t l gs gos o et poutG P, rpi f m      i                          n o
         e g h i t a etn 98)
          n e gh r
       bi t e h l gsi 19”                .
247
      See Becker, supra note __.
248
       See World Trade Report 2005, chapter about quantitative methods in WTO dispute settlement. Available at
       http://www.wto.org/english/news_e/pres05_e/pr411_e.htm (August 2005).
                                                    68

In other words, smaller and poorer WTO Members are less likely to make institutional
adaptations in response to the judicialization of WTO dispute settlement because of structural
factors. The costs of such change simply outweigh the benefits for their smaller and less diverse
economies. They are thus more likely to be in a traditional bargaining relationship with their
major trading partners, such as the US and the EC, so that when WTO legal issues are raised, this
is most likely to occur in a traditional bilateral bargaining context.


5. 2. Some Future Considerations
In section 5.1, we addressed some of the inevitable limits of this model for Brazil and other
developing countries. In this section, we address a few considerations that have been raised as to
        r l
          z’
how Baisapproach could be further adapted to provide support for Brazil (and other
interested countries) in the future. A first challenge for supporters of this approach will be to
ensure that successful innovations are not abandoned, such as the specialized Dispute Settlement
Unit within the Ministry of Foreign Affairs, the internship program in the Brazilian mission in
Geneva, as well as the networks of practitioners, consultants, business representatives, academics
and government officials that have been created. The last three governments in Brazil have
invested significant resources on foreign trade issues, including those for addressing trade
disputes. One of the most important initiatives was the creation of the Dispute Settlement Unit so
that dispute settlement expertise is developed within the Foreign Ministry. There is currently no
reason to suspect that the unit will be eliminated, as both the government and the business
              i xot s n m ot to pnn o Ba l eoo idvl m n n t
               e         s
community v wepr a a i pr n cm oet f r is cnm c ee p etad h
                                       a                       z’                 o        ,     e
unit has been successful in a number of important cases that can facilitate market access for
  r ln xot T e i sys rai t n a, o ee hne n h at
    zi            s          ir            zi
Baia epr. h m n t ’ ogn ao hs hw vrcagdi t ps and it will       ,               e ,
change in the future in response to new political initiatives.
There is undoubtedly some tension between the increasingly technical demands of the WTO and
its dispute settlement system and the traditional model of rotation for a Brazilian diplomatic
career, which favors general, broad-based knowledge over specialization. All foreign policy,
including trade policy, is currently within the Foreign Ministry, although the Ministry of
                                                                     ly s e, uh s r l
                                                                      i s
Development, Industry and Trade also handles important trade po c i ussc a Bais                z’
import laws.249 Although some may inquire whether Brazil should further specialize trade policy
by creating a separate trade ministry, such as the Office of the United States Trade
  er n t e rh Cs r Dr t a G
       s av          e          d     eo t
R peeti o t E ’Tae i c r e eneral, it seems doubtful whether this would be a
good idea, given the important role that the Ministry of Foreign Affairs plays in Brazil, and there
is no sense that the ministry would want to give up this important portfolio.250


249
      Through CAMEX, Brazil has created a coordinating device among government ministries on trade policy
       matters. See supra note __ and accompanying text.
250
                                      t 6 “ a r y ep e ay r co ,a m i a e i ee l oio n
                                          Im a ,    t
      See also Hurrell, supra note __ a8 ( t a t dsi m n peii shs a tnd tgnr psi i
                                                           d tn     ni     s  a   tn
                     , c d g n e t no r e eo aos)
                        nun          li     a
       foreign policyi l i i r ao t t d ngtt n”   ii .
                                               69

Another alternative that some have raised is for the Ministry of Foreign Affairs to provide
special training programs for diplomats that intend to work on WTO and trade-related issues,
including dispute settlement, and to create a distinct trade-related track for them within the
ministry throughout their career. Yet another alternative would be for the ministry to hire
permanent staff, such as international trade lawyers and economists, to support the work of the
diplomats within the ministry, who could continue to rotate among diplomatic posts. The issue of
 o et o t c r r l e os o h e ad f e le n u c le
                  r u        z’ s                 e
hw bs t sut e Baisr pne t t dm nso a l azd ad j iazd                   gi             d ii
international trading regime will be an ongoing one.
A further challenge for Brazil will be how to ensure ongoing collaboration with the Brazilian
private sector, academia and civil society so that Brazilian capacity remains broader-based, and
not dependent on a few government specialists who may leave their positions. The private sector,
academia and civil society can be of significant assistance to the government, providing it with
valuable information that it otherwise would not have. They can also supplement the
 oe et osa e u a n ugt y e uc o n v ul i u el n
      n ’            rn                         a
gvrm n scnt i dhm nad bde r r or sfri i da d pt ste ets e            di         s e tm
cases.
Yet there will remain tensions regarding the demands of civil society and the private sector for
 oe etr sa ny n O ae ,h oe et dse o pi t et i t n
      n       a      e
gvrm n t npr c o WT m tr t gvrm n s ei fr r a sc rnu ad
                                       ts e           n    ’      r        ve o p
 uprfrt oio , n h oe et pe r c fr O ae i l i i u
              s tn              e      n      ’ fe
spoto i psi sadt gvrm n s r e ne o WT m tr ( c d gd pt                   ts n u n s e
settlement positions) to remain confidential so as to enhance diplomatic flexibility. There have
 en e et o t oe eto a la cdm c ad i loiy acs t r l
        q s         e       n
be r us frh gvrm n t f iteaae i ’ n c isc t s ces oBais
                                       cit               s       v      e’                  z’
positions before the WTO, such as its written submissions before the dispute settlement system
and its statements made during oral hearings (other than business confidential information). It is
argued that, in this way, the private sector would be better enabled to provide input to the
government in the future, and the material could be more broadly used as teaching and training
materials. Since 2005, Brazil has been making some of its submissions available, but there is no
binding rule regarding the information that must be disclosed, nor regarding the time frame in
which the government must do so.
In addition, the government could continue to facilitate training programs in the Brazilian
mission and in the Dispute Settlement Unit inside the Ministry of Foreign Affairs, as well as
promote the training of Brazilian professionals within international institutions working on trade-
related matters, including within the WTO Secretariat and UNCTAD. Some may argue that the
government should aim to continue to spread information and knowledge among other sectors to
enlarge the trade community in Brazil (and in particular outside of the São Paulo and Rio de
Janeiro regions). Yet there are clear challenges here as well, given the cost for firms to develop
expertise that may not be worth the investment. The Ministry of Foreign Affairs, for example, is
 tla e in oe n a i s o e n r l i e s e e h i u el n
  i r y rg              i w r                e       z’ t e s o e s e tm
sll gl h i fr g l fm t df dBais n r t bfr t d pt ste et
system, because of their experience and expertise. Although their selection is understandable
because the private sector and government wish to do all they can to win a case, this practice can
discourage Brazilian law firms from investing resources (as through the internship program) to
build their own capacity.
                                                           70

The government can also encourage training in the Brazilian educational system for law,
economics and international relations. Universities can enter into arrangements with the public
and private sectors to assist with specific analyses. Universities can also create incentives for
professors to participate in international debates (including through publishing in English) so as
to ensure that Brazilian ideas, perspectives and priorities are better represented before
international institutions and transnational policy communities.251
One of the key challenges for making use of the WTO dispute settlement system is to identify
cases in the first place. INMETRO, the Brazilian agency responsible for addressing technical
barriers to trade, already makes available an easy-to-use electronic system that lists technical
barriers affecting Brazilian exports abroad.252 The private sector and its consultants can interact
with government officials through reference to this data base. The data base could be expanded
to cover all foreign trade barriers.253 An effort along these lines has been made by the Ministry of
Development, Industry and Commerce in Brazil (MDIC). It prepares reports on non-tariff
 a i swt lt f a i s i d y a gr,o Ba l m si pr n t d g a nr
    rr       h s
bre , i a i o bre d i db ct oy fr r is otm ot tr i pr e
                            rr v e               e              z’              a an           t s
(such as the US, the EU, China, India and South Africa).254 The Lula government also launched a
251
      See, e.g., Gregory Shaffer & Yvonne Apea, Institutional Choice in the GSP Case: Who Decides the Conditions
       for Trade Preferences: The Law and Politics of Rights, 39: 5 J. WORLD TRADE 977–      1008 (December 2005)
        nt g o ,T e i or e r n h n r e t n fh nb n Ca en h S ae a dm n e
           i                 s    e g d g e t p ti
       (o n hw “ h d cus r a i t i e r ao o t E al g l s i t G Pcs w s o i t
                                                                    e      i     u        e                    ad
       by an interpretive community of predominantly North American and European scholars publishing in the major
       trade law journals that are read by WTO judicial decision-makers. The discourse inevitably reflects and
       privileges certain backgrounds and normative priorities. To give two examples from the GSP case, one leading
       North American scholar admirably published three articles on the GSP case before the Appellate Body rendered
        t eio n te tw dio l otb i s f rh eio Wi i f
         s sn                a          tn
       i dc i ada l stoad i a cn i t n a e t dc i . t na e m n s fh dc i ’
                                                  r uo        t e sn             h              h
                                                                                         w ot o t eio s e sn
       publication, the World Trade Review published a special issue on the case in July 2004. All six of the
       commentators were either from North America or the United Kingdom, and five of the six taught at US law
        col )
       sho ”  s.
252
        See web site at http://www.inmetro.gov.br/barreirastecnicas/pontofocal/login.asp?url=clientes/index.asp
       (accessed September 2005). INMETRO is the Brazilian national agency in charge of technical regulation issues,
       dealing with certification of quality, measurement standards and so; it then became the inquiry point for Brazil
       under the WTO Agreement on Technical Barriers to Trade (as per Article 10.10 of the TBT agreement).
       Together with the Brazilian Foreign Ministry and its mission in Geneva, INMETRO through the TBT
       committee of the WTO, has access to notifications by other WTO members of new technical requirements,
       making them available through the website for technical barriers (for an easy access by Brazilian exporters),
       and prepares the Brazilian notes to the Committee. It can thus build on this list for purposes of its data base,
       refer matters to the TBT committee, and reach amicable settlements. See also Joanne Scott, THE WTO
       AGREEMENT ON SANITARY AND PHYTOSANITARY MEASURES: A COMMENTARY (2007) (chapter on SPS
       committee).
253
                                                                                                          as e
                                                                                                           ’
      The EC for example has developed an interactive data base on trade barriers. See Gregory Shaffer, Wht N w
       in EU Dispute Settlement?, supra note __.
254
        See http://www.desenvolvimento.gov.br/sitio/secex/negInternacionais/barExtInfComerciais/barComBens.php
       (August 2006). A general report was launched in 1999 on foreign trade barriers to Brazilian exports, by the
       MDIC together with the Foundation of the Center for Studies in Foreign Trade (FUNCEX): MDIC and
       FUNCEX       (1999),  Barreiras     externas   às    exportações    brasileiras-   1999     (available   at
       http://www.desenvolvimento.gov.br/arquivo/secex/barTecnicas/barNaoTarifadas/BarreirasLegislacao.pdf,
       August 2006).
                                                           71

website specifically designed for exporters –named Portal do Exportador –that includes not
only information on foreign regulations but on the practices of trade for Brazilian exporters
(including the web links to the portals for technical and non-tariff barriers) in Brazil.255 The
challenge will remain, however, as to how to reach not only the larger exporters, but also smaller
and less organized sectors to help to identify and deal with foreign trade barriers that they face.
Finally, some may question why Brazil, as a developing country, is not a member of the
Advisory Centre on WTO Law (ACWL), established in 2001.256 The ACWL provides
developing countries with lower-cost legal support for WTO dispute settlement and legal
analysis. The ACWL, however, has limited resources, so that if Brazil were to join it and actively
use it, there might be fewer ACWL resources available for other developing countries.
    r e h C
      o ,e              ol ot r l s n upr i en m cut ,
                           d        z,
Moevrt A WLw u csBai a a “pe m dli o e on y 100 000 USD tod c              r”
     257
join, and, as one of the largest developing countries, Brazil has been able to defend itself to
date, in part thanks to the willingness of the private sector to fund supplementary legal
assistance. In addition, Brazil has worked with the ACWL in some cases involving other
developing country complainants, as when Thailand used the ACWL in the EC-sugar case.
Nonetheless, the ACWL could be of use to Brazil for cases that are more of a systemic nature
where the government does not benefit from private sector-funded legal support.


                                                 CONCLUSIONS
This Article has told the story of how Brazil has mobilized legal capacity to advance its interests
 h uh h
  r
t og t WT d pt ste etyt .ndi s,t a ass dt i pc o Bais
           e O i u el n ss m I o g o ihs s s h m at f r l
                     s e tm                e         n               ee e                     z’
                t e O n prc ao i tti i
membership in h WT ad a ipt n n h WT ’l ass m o Baia gvrm n l
                                                 e O se lyt n r ln oe et
                                                           g       e          zi          n      a
institutions and business organization, as well as on the relationship between government,
business, law firms and economic and business consultants in addressing trade policy, trade
negotiation and trade dispute settlement strategies.
The story shows how the public and private sectors in Brazil have adapted to defend their
respective interests through a more legalized and judicialized WTO regime. Brazil has

255
      See http://www.portaldoexportador.gov.br/ (February 2008).
256
        On the Advisory Centre on WTO Law (ACWL) program, see its web site at
       http://www.acwl.ch/e/training/training_e.aspx. Under the annexes to the agreement establishing the Centre,
       developing countries are divided into three categories, A, B and C, with least developed countries (as defined by
         N u s cntu n
               e        i t g or a gr.n 06 hul a s o t et ’ e br o WT ig i
                                      h e
       U rl ) ost i afut ct oy I 20, or r e frh C n r m m e fr O li t n
                                                                  y t          e      es          s              t ao
       support were set at 200 USD for category A countries, 150 USD for category B countries and 100 USD for
       category C countries. Least developed countries hourly rates are set at 25 USD. Non-member developing
       country rates are set at 350 USD for category A countries, 300 USD for category B countries, and 250 USD for
       category C countries. See The Agreement Establishing the Advisory Centre on WTO Law, Annex II, 3
       November 1999, available at http://www.acwl.ch/Docs/ACWLAgreementEnglish.htm.
257
       e C , ne I Mi m m otb i s f ee p g on y m e n
                   ,   i     r uo
      SeA WL A nxI “ n u C n i t n o D vl i C ut Me br adMe br wt a
                                        on     r     s       s h
                                                          me i n
       cnm i Ta io . vib tt :w wa lh / / nx2e d
               n tn    l e t/     c c e da      p
      E oo yn r si ”A aalah p /w . w. /pf ne__. f
                                                          72

implemented what the government calls a three-pillar model for WTO dispute settlement,
involving reorganization of its Foreign Ministry, the creation of a specialized Dispute Settlement
Unit, the allocation of more resources to its mission in Geneva, and support for capacity building
in the private sector among business, law firms and economic consultants, resulting in the use of
public– private partnerships for WTO dispute settlement.
  aaa hlne f r l i si o c n h m r cs w s p o l o eto
         s l                z’ d r l i
C nd’ caeg o Baisnuta plyi t E bar ae a a i t m m n fr  e       e                va
Brazil, which resulted in much greater media coverage of the WTO in the country, helping to
spur the creation of broader-based capacity on WTO-related matters. There have been numerous
initiatives in Brazil to build capacity involving academia, consultancies, think tanks and civil
society organizations. Only foreign law firms were initially hired by the private sector to provide
legal support to the government, but there are now some cases in which local law firms have
assumed this role. Overall, the public–  private network approach developed in Brazil for WTO
dispute settlement during the last five or so years is an example of what a country does to adapt
to the challenges posed by the WTO dispute settlement system.
There is considerable legal and political commentary about the WTO dispute settlement system,
on the one hand, and about the impact (or lack of impact) within states of international law and
institutions (such as the WTO and WTO law), on the other. There is, however, considerably less
empirical work that probes beneath the surface to examine the impact of the WTO legal system
within a state and the processes through which that state engages with the WTO, in turn affecting
the system in an ongoing manner.
                                              f dvl i cut ’sces l s o t
                                                      on           r
Brazil has been singled out as an example o a ee p g on ys ucs u ue fh WT       f         e O
legal system. Commentators note that the Brazilian experience indicates how the system can
work for developing countries and is not simply a mechanism that serves only the major
industrialized countries, in particular, the United States and European Union. Yet until this
Article, there was little knowledge of what Brazil actually did to enable it to use the WTO legal
system, reflecting a general lack of empirical work at the micro-level in this field.
     l l t e a be cni r l ea bu w e e t ao s tii “ t a n h
      ay e                      dae           e
Simir ,hr hs en os e b dbtaot ht rh nt n tesn r r ti t     h e i a                    ee ”        e
face of global market forces, facilitated by organizations such as the WTO, or whether it is being
strengthened, or being transformed in consistent, identifiable ways.258 This Article contributes to
these analyses through its examination of how Brazil has responded to the legalization and
judicialization of the WTO dispute settlement system. As the Article shows, Brazil has adapted
its governmental structure for handling trade disputes, and the private sector, including trade
associations, large companies, law firms, consultancies, the media, non-governmental
organizations, think tanks and academia, have adapted as well. They have sometimes challenged


258
      See, e.g., Michael Zurn, Stephan Liebfried, Bernhard Zangel, & Bernhard Peters, Transformations of the State?
       available                                   at                                  http://www.staatlichkeit.uni-
       bremen.de/download/en/forschung/01_2004_Forschungsprogramm_gekuerzt.pdf; Georg Sorensen, THE
       TRANSFORMATION OF THE STATE: BEYOND THE MYTH OF RETREAT (2004); and SHAFFER & CHALMERS, supra
       note __.
                                                         73

the government, but overall, including in the process of challenging it, provided it with essential
resources to enable it to better represent Brazilian perspectives in the WTO legal system.
This Article should thus be of great interest to developing countries generally. Although we
address the limits of the Brazilian adaptations both for Brazil and, in particular, for smaller
developing countries, all countries and constituencies learn through experience and can benefit
through evaluating the experiences of others. We hope that this Article will be of use to a broad
spectrum of WTO Member governments and their constituencies, as well as be of interest to
scholars of law, international and comparative politics, sociology and economics.
Our central finding is that, as regards WTO dispute settlement, Brazil has increasingly worked
with the private sector, private lawyers, private consultancies, and now civil society groups on
WTO matters. Some might contend that these trends represent a weakening of the state, in that
expertise is no longer monopolized within governmental departments, but rather shared and
developed through Brazilian public–    private policy networks. We, in contrast, find that Brazil has
strengthened its ability to represent Brazilian interests through the diffusion of WTO expertise in
the private sector and civil society. As a result, the Brazilian government has enhanced its ability
to represent Brazilian interests in the international economic field. In the process of doing so, of
course, the very definition of Brazilian interests can be affected.
Ultimately, since developing countries face different contexts, there is no single strategy that fits
all of them. Exporting legal strategies across cultures regardless of context has never worked.259
Each country can attempt to determine how best to adapt strategies in light of its particular
                                            gr re,h olcn e e hd ny y by g
                                                    t e
circumstances. As Roberto Mangabeira Une w ist ga “a b r ce ol b oei        a                     n
  i t m x h ‘ m teso n n’ h nw i aeo e o b e wt
    g’        m a o a                   v .                l
Pae s ai t tt i itit i et T e e wlhv t b cm i d i the old, the                n       h
 oe n i h o l260
     i     h e c.
fr g wt t l a” This Article has provided information about developments in Brazil in
response to the challenges of WTO dispute settlement, noting the state and private sector
transformations that have occurred. In this way, it can help to provoke reflection over, and debate
and experimentation with, strategies that countries at varying levels of development and their
constituencies may adopt to better defend themselves in the international trading system.




259
      See, e.g., David Trubek & Marc Galanter, Scholars in Self-Estrangement: Some Reflections on the Crisis in Law
      and Development Studies in the United States, 1974 Wis. L. Rev. 1062 (1974).
260
   Roberto Mangabeira Unger, Free Trade Reimagined: The World Division of Labor and the Method of Economics
(2007), at 111.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:234
posted:8/14/2011
language:English
pages:73