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Brazil will negotiate its accession to the World Trade Organization’s Agreement on Trade in Civil Aircraft, the Economy Ministry said Wednesday. The plan is to facilitate the access of Brazilian products to a global market estimated at $3 trillion.
The mandate to negotiate was approved Tuesday by the Commercial Strategy Council of the Foreign Trade Chamber (Camex). The council defines the broad lines of Brazilian trade policy.
“Brazil is the only relevant aircraft maker and founding partner of the WTO still outside the agreement, which came into force in 1980 and brings together 33 members of the organization,” the Economy Ministry said in a note. “In addition, [the accession to the agreement] has the potential to reduce the negative impact of the Covid-19 pandemic on the airline industry, aggravated by the war in Ukraine.”
The WTO agreement on aircraft trade will facilitate the entry of Brazilian products into countries that are signatories to the agreement and access to tariff-free goods in production chains in the segment, the ministry said.
The agreement eliminates the import tax charged from civil aircraft, their parts and other goods used in air services, according to the ministry.
It also establishes commitments to foster a favorable environment for the free market in the industry, curbing non-tariff measures that limit trade, such as quantitative restrictions and the requirement of licenses and certifications that restrict trade and are contrary to the General Agreement on Tariffs and Trade (GATT).
“In addition to the benefits related to predictability and legal security, the accession will allow the airline industry to have access to a privileged space for discussions and debates on best regulatory practices in the sector,” said Lucas Ferraz, the secretary of foreign trade of the Economy Ministry, in a note.
According to the ministry, Brazil has already informed the other Mercosur members about its intention to start the accession process. In addition, it has consulted whether there is interest in following suit, a possibility that remains under evaluation by the other members.
This new negotiation front reinforces the multilateral trade liberalization agenda, the ministry said. The government has already granted a negotiating mandate for Brazil’s accession to WTO’s agreement on government procurement, the Economy Ministry said.
Source: Valor International