Brazil is weighing whether to drop its actions at the World Trade Organisation (WTO) against Thailand’s support for its sugar sector as part of its plan to improve trade strategies in line with the world’s trade body.
Latin America’s largest economy is planning to analyse a preliminary WTO panel report about its industrial policies that are being challenged by Japan and the European Union, the country’s Foreign Ministry said on Friday.
Brazilian media reported that the WTO made its preliminary ruling against Brazil for hurting foreign competitors with programmes that gave tax breaks to companies that built cars and other industrial goods in the country.
The Foreign Ministry said the preliminary report was confidential and will be made public in December.
A ruling against Brazil will add pressure on the country to scale back industry subsidies at a time when it is struggling with its worst recession in memory.
A widening fiscal deficit has already forced Brazil to roll back some of those subsidies since 2015, but the government remains under pressure from business groups to keep some stimulus to avoid further job cuts.
Earlier on Friday, Brazil moved to launch a WTO case to challenge US tariffs on some Brazilian steel imports.