Brasília, 9/8/2003 (Agência Brasil - ABr) - The Foreign Trade Chamber (Camex) will formally seek a dispute settlement panel at the World Trade Organization because of a European Union surtax on Brazilian salted chicken. Both the government and exporters have balked at the decision by the Europeans to raise the surtax from 15% to 75%.

The problem stems from the labyrinth of European import laws and a little loophole Brazil discovered. The surtax on frozen chicken is 75%, but the tax on salted chicken is 15%. That being the case, Brazil has been salting its frozen chicken exports to Europe for the last year and a half. Now the Europeans have slammed shut the loophole, claiming that the salted frozen chicken is, in fact, frozen chicken.

"We are playing by the rules. This business of saying they made a mistake is not an acceptable argument," says the executive secretary of Camex, Mario Mugnaini, adding that the closing of markets which were open is contrary to the ideal of free trade.

The WTO dispute panel should be open in a month, and a solution could be ready in a year or more. (AB)