BRUSSELS: The European Union on Thursday took Brazil to the World Trade Organisation for alleged discrimination against imports and helping its exporters illegally.

The European Commission said it had asked for talks with Brazil under WTO dispute settlement provisions “on tax measures that discriminate against imported goods and provide prohibited support to Brazilian exporters.”

The Commission said in a statement: “In recent years, Brazil has increased its use of the tax system in ways which are incompatible with its WTO obligations, providing advantages to domestic industries and sheltering them from competition.”

The Commission, the EU’s executive arm, cited a 2011 case in which Brazil imposed a 30 per cent tax increase on imported vehicles.

It charged that Brazil also “took steps affecting other goods, ranging from computers and smartphones to semiconductors.

“Under other similar programmes, tax benefits are reserved for goods produced in certain areas in Brazil, whatever the sector.” it said.

“These tax measures have a negative impact on EU exporters, whose products face higher taxes than domestic competitors,” it said. Talks under the WTO dispute settlement procedure give both sides 60 days to reach a settlement.

Failing that, the aggrieved party can then ask the WTO to set up a panel to investigate its complaint. The Commission said the EU was Brazil’s biggest trading partner, accounting for 20.8pc of its total trade in 2012.

EU exports to Brazil totalled about 39 billion euros last year, of which more than half was machinery and transport equipment, it said.

Meanwhile, Brazil on Thursday strenuously denied the EU charges it engages in protectionism and said it would show its trade programmes conform to WTO rules.—AFP