The Tax incentives offered by Brazil to local
production triggered a WTO dispute by the European Union and Japan against the
presumably ‘discriminatory tax advantages’ that for years have
severely harmed these countries’ automotive
and technological industries. This article explores, through the review of the
claims submitted by the parties to the dispute, the Panel and the Appellate
Body’s resolutions, if these tax incentives effectively
increased the border protection in Brazil by imposing a higher tax burden on
imported goods than on domestic goods; conditioning tax advantages to the use
of domestic goods and, providing export-contingent subsidies.