WTO Brazil Retreaded Tires Trade Dispute

The WTO Brazil-Retreaded Tires case began when the European Commission (EC), a net exporter of used tires, challenged Brazil’s ban on the importation of retreaded tires at the World Trade Organization (WTO). The EC complained that Brazil’s ban was disguised protectionism for that country’s tires market in violation of several General Agreement on Tariffs and Trade (GATT) disciplines. A WTO Panel was established in January 2006 to examine the case.

Used tires and tire material can often be recycled, for example by tire retreading. However, compared to a new tire, the life of a retreaded tire is generally shorter, ultimately leading to the faster accumulation of waste tires in an importing country than would be the case with the import of longer-life new tires. Brazil also claimed that such accumulation of discarded tires would create health and environmental hazards by providing breeding grounds for mosquito-borne diseases such as dengue fever, yellow fever, and malaria, and that it would be technologically impossible to dispose of such tires in its vast territory without negative environmental and health consequences.

In June 2007, the WTO Panel acknowledged the clear linkage between the import of retreaded tires and the public health and environmental risks associated with the increased tire waste resulting from such imports. The Panel’s decision reflected the analysis put forth by CIEL and partners in an amicus curiae brief submitted to the Panel on July 3, 2006.

While Brazil technically lost the case because the used tires were allowed to be imported, Brazil could bring itself into conformity with WTO law by putting an end to the imports of all used tires, without having to change its environmental and health measures (i.e., the import ban on retreaded tires) as the WTO had objected only to the way in which the measures were applied.

The case represented the first-ever challenge against trade restrictions imposed by a developing country for health and environmental reasons, and was closely watched by environmental groups.