GENEVA, March 13: The World Trade Organisation has upheld a European Union complaint against Brazil's prohibition of imports of retreaded tyres from the EU, diplomatic sources said here.

In a confidential report released to the two sides, a WTO disputes settlement panel ruled that the Brazilian import policy was not based on environmental considerations but had purely protectionist motives, diplomats said here.

The panel's report is due to be made public within two months.

The EU had targeted the import rules on retreaded tyres in the complaint lodged in June 2005, saying that Brazil allowed retreads in from fellow Mercosur nations -- Argentina, Paraguay and Uruguay.

Brazil argued that Brussels was trying to offload used tyres in developing countries, saying that tyre dumps were a fire risk and were favourite breeding grounds for mosquitoes that carry illnesses like malaria or dengue fever.

The panel said European imports could not be banned while those from other countries were allowed in, according to diplomats.—AFP