The European Union has taken Brazil to the World Trade Organization for alleged discrimination against imports and helping its exporters illegally.
The European Commission said it had asked for talks with Brazil under WTO dispute settlement provisions “on tax measures that discriminate against imported goods and provide prohibited support to Brazilian exporters.”
“In recent years, Brazil has increased its use of the tax system in ways which are incompatible with its WTO obligations, providing advantages to domestic industries and sheltering them from competition.”
The Commission cited a 2011 case in which Brazil imposed a 30pc tax increase on imported vehicles.
It charged that Brazil also “took steps affecting other goods, ranging from computers and smartphones to semiconductors.
“Under other similar programmes, tax benefits are reserved for goods produced in certain areas in Brazil, whatever the sector.”
These tax measures have a negative impact on EU exporters, whose products face higher taxes than domestic competitors.