RESTRICTED
WORLD TRADE WT/DS22/5
8February 1996
ORGANIZATION(96-0478)
Original: English
BRAZIL -MEASURES AFFECTING DESICCATED COCONUT
Request fortheEstablishment ofaPanel bythePhilippines
Thefollowing communication, dated 5February 1996, from thePermanent Mission ofthe
PhilippinestotheChairmanoftheDisputeSettlementBody,iscirculatedattherequestofthatdelegation.
_______________
On27November 1995, theGovernment ofthePhilippines requested theGovernment ofBrazil
toenter intoconsultations pursuant toArticle XXIII:1 ofthe1994General Agreement onTariffs and
Trade (GATT 1994). Acopyofthisrequest wasnotified totheDispute Settlement Body (DSB) as
wellastotheCouncil onTrade inGoods, theCommittee onSubsidies andCountervailing Measures,
andtheCommittee onAgriculture, inaccordance with Article 4:4oftheDispute Settlement
Understanding.
ThePhilippinesrequestedconsultationsunderArticleXXIII:1becausebenefitsunderGATT1994
arebeing nullified andimpaired asaresult ofthe121.5 percentcountervailing dutyimposed on
Philippine exports ofprocessed desiccated coconut products, which isinconsistent withBrazil 's
obligations under Article VIofGATT 1994, inparticular withrespect toparagraphs 3and6(a).
Evenifassuming thedevelopment assistance extended tococonut farmers weretobeconsidered
subsidies, andthatthesewerepassed onentirely tobenefit independent desiccated coconut processors,
theBrazilian measure would alsobeinconsistent withBrazil 'sobligations under Article 13ofthe
Agreement onAgriculture.
Additionally, thePhilippines isoftheviewthat:
1. Brazil didnotgivethePhilippines reasonable opportunity, throughout theinvestigation, to
clarify thefactual situation. Aspreviously stated bythePhilippine Government, there isno
subsidy granted todesiccated coconut processing. Development assistance wasprovided to
coconut farmers through alevycollected fromthem, andnotthrough thegovernment budget.
These were private funds ofthecoconut farmers.
2. Incalculatingtheamountofthesubsidyandthecountervailingduty,Brazilreliedon'information
available 'which excluded dataandinformation onthetypeofassistance programmes tothe
coconut producers thatwasprovided bythePhilippines.
3. Brazil calculated theamount ofthealleged subsidy andcountervailing dutybytreating the
coconut fruitassubstitutable fordesiccated coconut when these twoproducts arenotlike
products. Moreover, Brazil isaproducer ofcoconuts anddesiccated coconut, bothofwhich
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areavailable inthedomestic market ofBrazil, andshould therefore nothavetreated thecoconut
fruitasasubstitute fordesiccated coconut.
4. Ininvestigating theassistance programmes tothePhilippine coconut industry, Brazil failed
torecognizethattheseprogrammes,asimplementedbyadevelopingcountrylikethePhilippines,
should nothave been considered assubsidies perse.Moreover, asthePhilippines had
previously testified, thesource offunds fortheassistance programmes came from alevyon
coconut production, andnotfrom anygovernment budget.
Forthefurther information oftheDSB, weunderstand thatBrazil hasonlyrecently notified
theWTO oftheinstruments thatimposed theprovisional countervailing dutyof14.1percenton
28March 1995, andthedefinitive countervailing dutyof121.5 percenton21August 1995.
Initsresponse dated 8December 1995, Brazil stated thatitwasprepared toenter into
consultations withthePhilippines aslongasitwasmutually understood thatthose consultations would
beundertaken exclusively under the1979Agreement onInterpretation andApplication ofArticles VI,
XVI, andXXIII oftheGeneral Agreement onTariffs andTrade (or,Tokyo Round Code onSubsidies
andCountervailingMeasures),underwhichauspicesthecoconutsubsidiesinvestigationswereconducted
andthecountervailing duties imposed.
Inaletter dated 13December 1995, thePhilippines replied thatBrazil 'sresponse constituted
arefusal oftherequest forconsultations under Article XXIII:1, butthatithoped thatBrazil would
beabletoengage thePhilippines insuchconsultations within the30-day period provided inArticle 4:3
oftheDispute Settlement Understanding (DSU).
Unfortunately, Brazil hasfailed toenterintoconsultations withthePhilippines within theperiod
prescribed intheDSU.
TheGovernment ofthePhilippines requests theestablishment ofaPanel pursuant to
Article XXIII:2 ofGATT 1994 andArticles 4and6oftheDSU, andunder thestandard terms of
reference provided inArticle 7.1oftheDSU. ThePhilippines requests thatthePanel consider and
findthat:
1. Thecountervailing dutyimposed byBrazil isinconsistent withparagraphs 3and6(a)
ofArticle VIofGATT 1994.
2. Brazilshoulddesistfromfurtherimposingthecountervailingdutyondesiccatedcoconut
exports ofthePhilippines, andreimburse whatever duties were collected.
ThePhilippines submits thisrequest fortheestablishment ofaPanel forinscription intheagenda
ofthenextmeeting oftheDSBon21February 1996, andfurther requests thataspecial meeting of
theDSBbeconvened notlaterthan15daysafterthemeeting of21February.