Lula is left without “carte blanche” to retaliate against the US in the economic reciprocity decree

Lula will not have "carte blanche" to retaliate against the United States with the publication of the decree regulating the Economic Reciprocity Law, which provides for the adoption of retaliatory measures in trade disputes. This Tuesday (15), the government published in the Official Gazette the decree regulating Law 15.122, approved by the National Congress and sanctioned by Lula in response to the first tariffs announced by Trump in April.

According to Roberta Portella, a professor at the Getulio Vargas Foundation (FGV), by establishing the instruments provided for in the Reciprocity Law, the decree establishes objective criteria for the application of trade retaliation. Prior technical, legal, and diplomatic mechanisms are provided for, such as attempted negotiations, consultation with the affected sector, and, if necessary, the opening of a panel at the World Trade Organization (WTO).

The decree allows Brazil to adopt, provisionally or definitively, the suspension of tariff concessions, restrictions on foreign investment and even the withdrawal of obligations related to intellectual property rights whenever a country or bloc imposes measures considered harmful, says tax specialist Leandro Roesler.

The decree also established the creation of the Interministerial Committee for Economic and Commercial Negotiations and Countermeasures, responsible for deliberating and monitoring negotiations on the measures to be adopted.

Regulation streamlines countermeasures

According to Roesler, with the law's regulation, Brazil's response to measures like Trump's tariffs has become faster. From now on, provisional countermeasures can be approved directly by the committee and published by presidential decree. Ordinary countermeasures will continue to be processed by Camex, with the participation of the productive sector.

Tax lawyer and partner at Ruzene Sociedade de Advogados, Marco Antônio Ruzene, states that, in this sense, the decree authorizes the Executive Branch to adopt, almost immediately, countermeasures such as the imposition of commercial law on imports of goods or services from a country or economic bloc.

"It is worth noting that this is a common practice in international trade, used by countries that aim to protect their economy, respond to unfair practices or preserve trade balance."

Even if the decree or the Reciprocity Law are in line with international trade rules, the government needs to exercise caution. Portella states that the concrete implementation of countermeasures requires technical justification and respect for multilateral procedures. "The decree expands Brazil's ability to defend itself, but within the limits established by the international system itself.