Government publishes “Reciprocity Law” to respond to unilateral measures against Brazil

The government published this Tuesday (15), in the Official Gazette of the Union (DOU), the regulation of the so-called Reciprocity Law, which allows the adoption of retaliatory measures against countries or economic blocs that make unilateral decisions and harm the competitiveness of Brazilian companies in the international market.

The regulation was signed the day before by President Luiz Inácio Lula da Silva (PT) amid the analysis of the 50% tax imposed by President Donald Trump of the United States on products imported from Brazil.

“The law establishes criteria for the suspension of commercial concessions, investments and obligations related to intellectual property rights in response to unilateral measures adopted by a country or economic bloc that negatively impact Brazil's international competitiveness,” says the decree ( see in full ).

The regulations define how Brazil may respond when it is the target of trade barriers, subsidies, boycotts, or other external practices deemed unfair. To this end, an Interministerial Negotiation and Countermeasures Committee was created, led by the Ministry of Development, Industry, Commerce, and Services (MDIC), with the participation of the Ministry of Finance, Foreign Affairs, and the Chief of Staff's Office.

The group may authorize, review or suspend so-called "countermeasures," which are forms of economic and trade retaliation, adopting provisional measures in urgent cases while the full process of analysis and negotiation is conducted.

Possible reactions include increased tariffs, restrictions on imported products, freezing investments or the suspension of obligations under treaties.

According to the decree, the request for retaliation can come from ministers or the Foreign Trade Chamber (Camex), and must be justified with data on the negative impacts of the foreign measure. After this, the ministries involved analyze the economic, political, and commercial damage and present suggested responses.

“The request to be proposed to the Interministerial Committee for Negotiation and Economic and Commercial Countermeasures must contain a preliminary justification regarding the exceptionality for the adoption of provisional countermeasures with justification,” says an excerpt from the decree.

The following must be indicated in the request for countermeasures:

• 1- indication of unilateral measures adopted by another country or economic bloc that negatively impact Brazilian international competitiveness;
• 2- designation of the economic sectors affected in Brazil;
• 3 - estimate of the economic impact caused by actions, policies or practices.

If necessary, Brazil may also consult with private sector representatives and open public consultations to discuss the best ways to respond. At the same time, the Foreign Ministry will be responsible for notifying the affected country and seeking a diplomatic solution to prevent the dispute from escalating.

The decree also sets deadlines for analyzing requests and diplomatic negotiations, in addition to providing for monitoring of the effects of countermeasures by participating agencies.