RIO DE JANEIRO, BRAZIL – A provisional measure (MP), already approved at ministerial meetings and currently under consideration in the Civic Chamber, authorizes the executive branch to retaliate proportionately and unilaterally in the event of a victorious dispute in the WTO if the losing country files what is known as an “appeal in a vacuum.”
That’s what happened this week with India in the sugar dispute and in late 2020 with Indonesia in a dispute over import restrictions on chicken meat. The two countries appealed to the Appellate Body, knowing that the mechanism would not work and could not rule; hence the term “appeal in a vacuum.”
Thus, in practice, they stopped the Brazilian victory and maintained the measures deemed illegal by the Panel (Investigative Committee), which caused millions of dollars in losses to Brazilian producers.
India and Indonesia are thus potentially the first to be threatened if the MP goes into effect. Retaliation could take the form of surcharges on goods and services from the affected countries or even suspension of intellectual property rights.
Once the WTO Appellate Body is operational again, the initiative will have served its purpose.