If Brazil's government pushes ahead with the challenge, as appears likely, it would be the latest sign of trade activism from a country that has already filed in recent years successful WTO complaints against European sugar and U.S. cotton subsidies.
Antonio Jorge Camardelli, president of Brazil's Beef Exporters Association (Abiec), said the local beef industry was "agreed and united" in the cause and the major industry players including JBS and Marfrig, which are otherwise rivals, said they supported Abiec's plan to challenge EU restrictions.
"It has reached a point where we really don't have anything to lose anymore," Camardelli told Reuters from his office as he pointed to a chart on his computer that showed a sharp decline in Brazilian beef exports to the European Union since 2006.
"The foreign ministry said they think the chance of success of our case is favorable. We're in the final review of the attorneys' proposals to choose an approach that will be most likely succeed, and in 60 days we should be able to start procedures for opening a panel at the WTO."
Brazil's foreign ministry did not immediately return calls seeking comment. But the government generally decides to support cases when they have the support from industry groups, which cover the cost of the legal bills for the case.
Brazil's sugar and cotton industries footed the multimillion dollar legal bills to wage such endeavors, as the local beef industry is now willing to do.
If countries involved in trade disputes at the WTO fail to reach an accord on their own, formal arbitration is started through the opening of a so-called Dispute Panel that gives a ruling based on evidence from both sides that the WTO tends to follow in its final rulings on the challenge.
Lost Trade
Since Irish ranchers pressured the European Commission to impose tougher restrictions on Brazilian beef imports roughly four years ago, local shipments to the EU have plummeted.
Brazilian beef heading to Europe through the so-called Hilton Quota, which allows for a certain amount of beef to be exported per year to the European market, was 4,990 tonnes in 2006/2007 of Brazil's 5,000 tonne annual limit.
"Europe is one of the most important beef markets in the world," said Camardelli, adding that although Brazil ships half of its beef exports to the Middle East now, mostly Iran, it earns twice as much for the same cuts in Europe.
This year, shipments under the Hilton Quota are expected to reach a 380 tonnes, after falling sharply all of the past four years, Abiec data showed.
"Europe puts demands on Brazilian beef that it asks of no other trade partners, or even its own producers inside Europe, which is not fair under the WTO," he said. (Reuters)
