Brazil enacts Economic Reciprocity Law

Law No. 15,122, also known as the “Economic Reciprocity Law”, was signed without any vetoes by President Luiz Inácio Lula da Silva and published in the Official Gazette this Monday, April 14. The text establishes criteria for the suspension of concessions in trade, investments, and obligations related to intellectual property rights, in response to unilateral measures adopted by individual countries or economic blocs that negatively impact Brazil’s international competitiveness.

The regulation represents a strategic action by Brazil in the face of the tariffs imposed on dozens of nations by the administration of United States President Donald Trump. In the case of Brazil, the tariff corresponds to 10% on top of every product exported to the North American market. For Brazilian steel and aluminum, the tariff corresponds to 25%, significantly affecting Brazilian companies. Brazil is the third-largest exporter of these metals to the United States.

The text specifies that the adoption of countermeasures must aim to minimize the impact on economic activity and avoid disproportionate onus and administrative costs. It details, however, that diplomatic consultations must be conducted to mitigate or annul the effects of such measures and countermeasures defined by the new law.

COUNTERMEASURES — The regulation authorizes the Legislative Branch, in coordination with the private sector, to “adopt countermeasures in the form of restrictions to the importation of goods and services or measures to suspend concessions in the areas of trade, investments, and obligations related to intellectual property rights, as well as measures to suspend other obligations foreseen in any of the country’s trade agreements.”

The regulation also highlights that the countermeasures must be, as much as possible, proportional to the economic impact generated by the actions, policies, or practices applied unilaterally in measures in the areas of trade, finances, and investments that go against Brazilian interests. The instrument reaffirms Brazil’s sovereignty in trade and environmental decisions and seeks to protect national economic interests from practices deemed unfair or abusive

The text was approved by the Brazilian National Congress in early April and was unanimously approved by the Federal Senate, which authored it. In addition to President Lula, Law No. 15,122 was also signed by Vice President and Minister of Development, Industry, Trade, and Services Geraldo Alckmin; Minister of Finance Fernando Haddad; and diplomat and General Secretary of the Minister of Foreign Affairs Maria Laura da Rocha.