BRAZIL VERSES CANADA WTO TRADE DISPUTE SETTLEMENT 2
Running head: BRAZIL VERSES CANADA WTO TRADE DISPUTE SETTLEMENT 1
Brazil verses Canada WTO Trade Dispute Settlement
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Brazil v. Canada WTO trade Dispute Settlement
Since 1946, Brazil has been an active member in trade negotiations across the world which led to the formation of the General Agreement on Tariffs and Trade in 1947 and the subsequent formation of the WTO. Brazil is regarded as a big developing country and for this reason; it has had a great interest in the multilateral trading system that would be able to ensure the security of its exports across the world. Due to its large geographical size, diversified interests, and climatic diversity, Brazil has remained an active member in the WTO. Zhang, (2018) notes that this factors, coupled up with the sophisticated diplomatic relation of the country have led to the advancement of its role in the WTO despite having 0.8% shares in the global trade. However, the country remains to be technically small, in terms of geography but interested in multilateral trade. The role of WTO is however more imminent for small countries like Brazil with low bargaining power in the world trade than for superpowers that control the geopolitics and trade.
On February 8, 2017, Brazil submitted a request for consultation under the WTO trade Disputes Settlement System. Brazil was protesting over the kind of subsidies given by the Canadian government to the aircraft industry and the impact that this would have on the Brazilian economy. Brazil complains that the Canadian government offered subsidies to aircraft in the local levels, federal and provincial level. In particular, Brazil complaint on the subsidies that were given to Bombardier C-Series as such would affect trade competitiveness in both countries. Johannesson, & Mavroidis, (2017) establishes that by providing subsidies to these companies, Brazil claims that Canada violates the obligations made in WTO on international trade. The impact of this would be the creation of distortion in international trade much against the interest of Brazil.
WTO, on its primary findings, established that the charges pressed against Canada were legitimate and that Canada had violated international trade by giving unfair subsidies. Canada had objected the case because Brazil had unfairly broadened the case to include four other claims that were not in the charge sheet initially ( Zhang, 2018). Although the case has dragged on for a long time and a final decision has not been made, the preliminary findings, if they anything to go by, would end a decade long dispute between the two airlines in the country. Once again, the role of WTO has been displayed as being more imminent in developing countries with less bargaining powers than on big economies.
Reference
Johannesson, L., & Mavroidis, P. C. (2017). The WTO Dispute Settlement System 1995-2016: A Data Set and its Descriptive Statistics. Journal of World Trade, 51(3), 357-408.
Zhang, L. (2018). The Role of Dispute Settlement Body (DSB) in the World Trade Organization (WTO) in the Aviation Industry—In the Time of Bombardier Case.