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The WTO Dispute Settlement Mechanism pp 375–387Cite as

Not Just About Embraer: A Brazilian View of the Brazil-Canada Aircraft Disputes at the WTO

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Abstract

Between 1996 and 2007, Brazil and Canada were engaged in trade disputes and negotiations concerning exports of regional aircraft. The process was sometimes acrimonious and prevented the two countries, with many interests in common, from developing their bilateral relationship. This article claims that there was much more at stake, for the two countries, than just exports of aircraft, important though these may be. Eventually, the existence of a rules-based multilateral system for settling disputes paved the way for a mutually-satisfactory bilateral compromise as well as for a new international framework on financing of export credits for civil aviation. In the absence of such mechanisms, consequences would most likely be more harmful for everyone.

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Notes

  1. 1.

    Challenging as it was, by 1945 progress had been made in every front and Vargas bequeathed a world-class university (University of São Paulo), the country’s first major steel mill, as well as modernized armed forces which had taken part in the Italian campaign of the Second World War.

  2. 2.

    Clostermann (2008), Front Matter. Clostermann, though Brazilian-born, was a French citizen. Brazilian pilots, however, distinguished themselves as part of the 25,000-strong Brazilian Expeditionary Force in the Italian campaign of 1944–1945.

  3. 3.

    Forjaz (2005), p. 295.

  4. 4.

    Santos (2010).

  5. 5.

    The title of Smith’s conference was “Brasil, future air power”. Available at: www.cta.br/richard.php.

  6. 6.

    Morais (2006), pp. 119–120.

  7. 7.

    Information available at “Embraer’s second life”, Exame magazine, November 2, 1998.

  8. 8.

    See: business.financialpost.com/features/fp500-database and www.bombardier.com/content/dam/Websites/bombardiercom/countries/supporting-documents/Bombardier-Canadian-industrial-leader-en.pdf.

  9. 9.

    Embraer and Bombardier dispute the third place in the world, behind Boeing and Airbus.

  10. 10.

    Subjects such as antidumping, nontariff barriers, technical barriers, subsidies, among others.

  11. 11.

    “Keep the lawyers out. Keep the economists out. And keep the press out”. This was supposed the be the unwritten rule of the GATT in its first decades of existence, according to Belgian Ambassador Paul Luyten, former representative of the European Common Market for the GATT. Lecture at Brazilian Mission to the European Union, Brussels, May 2001.

  12. 12.

    United States—Standards for Reformulated and Conventional Gasoline (WT/DS2 e WT/DS4). Available at: http://www.wto.org/english/tratop_e/envir_e/edis07_e.htm.

  13. 13.

    Pereira et al. (2012), p. 122. For updated data, see: https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm.

  14. 14.

    Consultations are always the first step in a dispute, whereby the system attempts to encourage parties to settle amicably. If unsuccessful, they may be followed by a panel procedure. The party unsatisfied with the panel report can resort to the Appelate Body for a final examination of the case. In case a party fails to fix the measures that were the object of the dispute, the complainant may be allowed to retaliate in a stipulated amount.

  15. 15.

    In GATT and WTO usage, the name of the country at the start of the dispute title corresponds to the party complained against.

  16. 16.

    In case the parties disagree on whether the decision of the original panel was implemented or not, the matter should be subject to the same procedures of amicable dispute settlement. It should be submitted, whenever possible, to the original panel, now called “compliance panel”.

  17. 17.

    See above.

  18. 18.

    An estimated US$ 22.4 million per aircraft.

  19. 19.

    The moment a report enters into force.

  20. 20.

    For systemic reasons, Brazil disregarded retroactivity and ignored the transactions involving Air Nostrum and Comair.

  21. 21.

    As explained previously, the arrangement is covered by the second paragraph of item “k” in Annex I to the WTO’s Agreement on Subsidies and Countervailing Measures.

  22. 22.

    “Aircraft Sector Understanding on Export Credits for Civil Aircraft – Remarks made by Angel Gurría during the Signing Ceremony in Brazil”. See http://www.oecd.org/tad/xcred/aircraftsectorunderstandingonexportcreditsforcivilaircraft-remarksmadebyangelgurriaduringthesigningceremonyinbrazil.htm. Last visited on August 10, 2018.

  23. 23.

    “Export Credits Arrangement”. Ministry of Foreign Affairs, Press release no 343, July 30, 2007.

  24. 24.

    Nietzsche (1911), p. 2.

  25. 25.

    For Embraer-Bombardier, the Government bodies involved were the Foreign Trade Ministry [MDIC], the Social and Economic Development Bank [BNDES] and the Export Credits Insurance Corporation [SBCE].

  26. 26.

    “Canada’s Bombardier, Brazil’s Embraer face off at Paris Air Show”, Financial Post, June 17, 2013.

  27. 27.

    At the time of writing, negotiations are still ongoing about a possible joint venture between Boeing and Embraer, and their final outcome is not yet clear.

  28. 28.

    At the time of writing, both countries are involved in the Mercosur-Canada negotiations towards a free trade agreement.

  29. 29.

    Churchill (1996), p. 232.

References

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Authors and Affiliations

  1. Ministry of Foreign Relations, Brasilia, Brazil

    Daniel Roberto Pinto

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  1. Daniel Roberto Pinto
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Correspondence to Daniel Roberto Pinto .

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Editors and Affiliations

  1. International and Compared Law, University of São Paulo Law School, São Paulo, Brazil

    Alberto do Amaral Júnior

  2. University of São Paulo Law School, São Paulo, Brazil

    Luciana Maria de Oliveira Sá Pires

  3. International Relations Institute, University of São Paulo, São Paulo, Brazil

    Cristiane Lucena Carneiro

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Pinto, D.R. (2019). Not Just About Embraer: A Brazilian View of the Brazil-Canada Aircraft Disputes at the WTO. In: do Amaral Júnior, A., de Oliveira Sá Pires, L.M., Lucena Carneiro, C. (eds) The WTO Dispute Settlement Mechanism. Springer, Cham. https://doi.org/10.1007/978-3-030-03263-0_24

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  • DOI: https://doi.org/10.1007/978-3-030-03263-0_24

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  • Online ISBN: 978-3-030-03263-0

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