Xinhua, Brasilia :
Brazil’s taxes on imported cars comply with World Trade Organization (WTO) rules, Foreign Minister Luiz Alberto Figueiredo said Friday.
The comment came after the European Union (EU) announced earlier in the day that it had asked the WTO to establish a panel to look into possible unfair taxes imposed by Brazil on foreign-made cars.
“Our tax regimen is perfectly compatible and we are going to prove this at the panel,” said the minister.
Asked whether the EU’s complaint amid negotiations between the EU and the Southern Common Market, a sub-regional trade bloc, could have negative impact on the Brazilian government, he indicated that it would not, saying “they are different issues.”
The EU’s complaint was sparked by Brazil’s “Inovar Auto” program, which was launched in 2013 and stays effective until 2017. The program offers the Brazilian automotive industry tax breaks for meeting modernization goals and improving fuel efficiency.
“Products manufactured in the European Union and sold in Brazil face higher taxes than Brazilian products,” the European Commission (EC) said in a press release.
“In addition, Brazil restricts trade by demanding Brazilian manufacturers use domestically-made components as a condition to receive tax breaks,” the EC said.
