Statement on Trade
Sanctions Against Brazil
November 13, 1987
am today announcing my intention to raise tariffs on Brazilian exports to the United States and to prohibit imports
from Brazil of certain computer
products in response to the maintenance by Brazil of unfair trade
practices in the area of computer products.
Brazil's national informatics
policies, in place since the 1970's, severely restrict foreign participation in
Brazil's computer and
computer-related market. The United States has unsuccessfully
raised its concerns with Brazil in bilateral and
multilateral consultations since 1983. In September 1985 I initiated an
investigation of these practices under section 301 of the Trade Act of 1974 and
in October 1986 determined that Brazil's informatics policies were unreasonable
and a burden and restriction on U.S. commerce. I suspended parts of this
investigation after Brazil made commitments to
implement its informatics law in a more flexible, reasonable, and just manner.
developments in Brazil make it clear that
these commitments are not being kept. In particular, the Brazilian Government
has rejected efforts by an American software company to license its product in Brazil, asserting that a
domestic company makes a product that is functionally equivalent. This decision
establishes a precedent which effectively bans U.S. companies from the
Brazilian software market. It is also likely to increase piracy of foreign
software, since demand for the prohibited product will continue.
response to these developments, I intend to raise tariffs to offset the lost
sales opportunities for U.S. companies, estimated at
$105 million, and to prohibit imports of Brazilian informatics products covered
under Brazil's market reserve policy.
Should Brazil reverse its action and
live up to its commitments to the United States, I will be prepared to
lift these sanctions.
Brazil is a good friend of the
United States, and we support the
steps it is taking to restore its democratic institutions. But Brazil is also a
major beneficiary of the global trading system, the openness of which cannot be
maintained if markets are deliberately closed and policies incompatible with a
more free and open trading system are established.