4. Identifying the policy environment affecting digital trade
This chapter maps Brazil’s evolving policy and regulatory environment for digital trade, placing Brazil in the broader regional context and benchmarking performance against international best practices. The chapter argues that, while Brazil has made good progress implementing a range of digital trade related policies, there are a number of areas where Brazil could further update rules and regulations to help boost participation in digital trade. These include reductions in restrictiveness across a range of services sectors that support the digital transformation and a wider engagement on digital trade issues in trade agreements.
The regulatory and policy environment that underpins digital trade in Brazil has undergone important positive changes, however, it remains more restrictive than many OECD or G20 economies across a number of areas.
Key regulatory challenges include reducing barriers to ICT infrastructure services and promoting more competition in order to incentivise investment in better quality communications services.
Where goods are concerned, Brazil may want to consider increasing the level and scope of its de minimis regime, by making it applicable beyond postal shipments and also covering Business to Consumers (B2C) shipments.
Brazil is increasingly active in digital trade and e-commerce discussions, but continued engagement and adoption of provisions, including in trade agreements, is needed to make the most out of digital trade.
The regulatory environment in which digital trade takes place in Brazil is underpinned by a comprehensive set of laws and decrees (Table 4.1). In recent years, however, Brazil has been increasingly active in shaping the policy and regulatory environment in which digital trade takes place. For instance, in 2014, Brazil adopted Law No. 12.965, known as the Civil Rights Framework for the Internet (Marco Civil da Internet).1 This was a major step towards building a regulatory framework for the digital era, strengthening citizens’ rights to access to the Internet, and laying down basic principles, rights and obligations with respect to the use of the Internet. Since then, Brazil has adopted further decrees and laws that lay down rules for digital activities, including, a new general data protection law.
While building the foundation of a robust regulatory framework for digital trade has been progressing rapidly over the past years, the overall regulatory environment affecting cross-border digital trade, as measured by the OECD’s Digital Services Trade Restrictiveness Index (DSTRI), remains more cumbersome than the OECD average although in line with other G20 economies (Figure 4.1). This is due to a range of regulations discussed at greater length in this section.
Note: The Digital STRI indices take values between zero and one, one being the most restrictive. Scale adjusted to 0.6. The values for the EU represent the average value for EU countries covered in the STRI.
Source: OECD Digital STRI database, 2020.
Moreover, the regulatory environment is also highly heterogeneous compared to that of other countries, particularly regional trading partners (Figure 4.2).2 Brazil’s digital trade regulations are most similar to those of Peru and Mexico and, to a lesser extent, to Costa Rica and Colombia in the region, while regulatory heterogeneity is significantly higher with respect to Argentina and Chile. By contrast, Brazil’s regulatory environment is more closely aligned with that of European Union countries. This is likely to be further accentuated with the recent entry into force of the new General Data Protection Law (Lei Geral de Proteção de Dados Pessoais), which appears to be similar in structure to the EU’s General Data Protection Regulation (GDPR).3
To better understand the evolving environment in Brazil, the next sections will look closer at the different policy areas relevant to digital trade. These include regulations affecting ICT infrastructure, measures affecting cross-border data flows and data localisation, enablers such as payments and intellectual property rights, policies related to trade facilitation measures (e.g. de minimis and customs procedures), and policy implications at the intersection between trade and competition.
Note: The indices show the level of regulatory heterogeneity between Brazil and each country in the figure. Lower index values indicate closer regulatory similarity whereas higher index value show more regulatory heterogeneity.
Source: OECD Digital STRI Heterogeneity index, 2020.
4.1.1. Cumbersome trade regulations on telecommunications and broadcasting services can undermine the quality of service provision to Brazilian customers
Information and communication technology (ICT) services form the backbone of the digital economy. Not only do they provide the necessary network infrastructure for economic and social activities, they also underpin the digitisation of other sectors. Policies that encourage competition and investment in telecommunication services are essential to unlock the full potential of the digital transformation.
However, Brazil’s telecommunications sector is more restrictive than the OECD average and that of regional partners such as Colombia, Costa Rica, or Chile. Impediments related to conditions for setting up telecommunication companies by foreign providers as well as certain barriers on competition related to resale of public telecommunications services, spectrum allocation, and transparency on the conditions for accessing the incumbent provider’s network are among the barriers that contribute to higher index values. This matters because more restrictive telecommunications services are associated with less affordable internet access (Figure 4.3).
Recent years have seen convergence of telecommunications, information services and broadcasting where content can be delivered over different networks (OECD, 2017[1]). Telecommunications operators can offer Internet Protocol Television (IPTV), broadband and telephone (fixed, mobile or VoIP), while in some cases broadcasters have become telecommunications operators.
In addition, video-on-demand, streaming, and downloads have become increasingly important for distribution of audio-visual content, increasing demand for access to high-speed broadband. The supply of these services depends on the performance and regulation in the telecommunications sector. By the same token, a vibrant IPTV and online content market creates demand for broadband internet services.
Note: Telecoms regulation is identified using the OECD STRI for the telecoms sector in 2019. The indicator ranges from 0 to 1 with higher values reflecting higher degrees of restrictiveness. The 2020 Economist Intelligence Unit (EIU) Inclusive Internet Index ranges from 0 to 100, with higher values reflecting a more inclusive Internet environment.
Source: OECD (2020[2])
Countries tend to have similar levels of trade restrictions in telecommunications and broadcasting services, both of which are generally considered to be of strategic importance (Figure 4.4). At the same time, countries that tend to have a high level of restrictiveness in both services sectors, also tend to have fewer autonomous systems per 100 000 inhabitants (indicating the ease with which a company may take control over routing its traffic and exchange this traffic with other networks), which may be a good proxy for the lower level of competition in the market (OECD, 2017[1]).
Note: Indices take values between zero and one, one being the most restrictive. Scale adjusted to 0.7.
Source: OECD STRI database, 2020.
In broadcasting services, Brazil is the fourth most restrictive country after China, Mexico, and Colombia. This is due to stringent market entry conditions for foreign broadcasters in the Brazilian market such as low maximum thresholds for foreign equity ownership or nationality requirements for managers of broadcasting companies. In addition, quotas on broadcast time and local content requirements related to production of programs, cast and crew also affect the conditions of trade in this sector.
Lowering barriers in these sectors could improve the regulatory and policy environment for communications infrastructure services such as telecommunications and broadcasting services. More competition from foreign services suppliers in these critical enabling sectors for digital trade would further enhance performance, incentivise investment in better communications infrastructure and high-speed broadband, and foster lower prices for consumers and downstream business users.
4.1.2. Balanced rules on cross-border data flows can help Brazilian firms maximise the benefits of technological innovations
With the growing digitisation of information, increasing computer processing power and broader penetration of high-speed Internet connections, the ability of firms to collect, transfer and process data has increased significantly. As a result, the movement of data across borders has become an essential component of digital trade, be this as an input into the trade and production of goods or as a driver of new types of data-driven services. At the same time, the growth in use of data has accentuated concerns related to privacy and security, especially when data crosses different jurisdictions. This has led many countries to update or adopt new measures often affecting the movement of data across borders or mandating that data is stored domestically (Casalini and López González, 2019[3]). For trade, it is important that restrictions on the movement of data undertaken for legitimate reasons take into consideration good regulatory principles such as transparency and non-discrimination, and they aim to be as least trade restrictive and interoperable as possible (Casalini, López González and Moïsé, 2019[4]).
In 2014, the Marco Civil da Internet (Law No. 12,965) and its regulatory decree (Decreto No. 8,771) created the first regulatory framework for automated processing of personal data in Brazil. This law and its decree included specific principles on the protection of personal data (e.g. on confidentiality, security and access limitation) and required consent to carry out transfers of personal data outside of Brazil.
In 2018, Brazil enacted the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais: LGPD) under Federal Law No. 13,709/2018 which entered into force on 18 September 2020. A key purpose of this law was to create a comprehensive framework applicable to all personal data processing operations, regardless of the sector and of the nature of the entity undertaking its processing.4 The LGPD uses similar language to that found in the OECD Guidelines on the Protection of Privacy and Transborder Flows of Personal Data.5 As such, personal data is understood to be all information related to an identified or identifiable natural person. Data controllers are defined by their capacity to decide on the processing of personal data, and international transfer of personal data means the transfer of personal data to a foreign country. The LGPD introduces a new approach to international transfers of personal data compared with the Marco Civil da Internet. The LGPD prohibits international transfers of personal data unless adequate safeguards are in place. Specific safeguards such as standard contractual clauses, binding corporate rules or stamps, certificates and codes of conduct are recognized as mechanisms that provide adequate protection for personal data sent abroad (Article 33.II).
In addition to specific safeguards, transfers of data to countries whose legislation is recognised as providing adequate protection is permitted without restrictions. Adequacy decisions will be made by the Brazilian Data Protection Authority (Autoridade Nacional de Proteção de Dados ‒ ANPD), after consideration of the general and sectorial rules of the legislation in force in the country of destination. As of today, and given the very recent implementation of the regulation, the ANPD has not pronounced any adequacy decision.
The ANPD will play an important role in enabling international transfers of personal data as it will be in charge of making adequacy decisions on the degree of data protection of other countries and defining the conditions for international data transfers when adequacy is not established.6 The ANPD’s regulatory structure was established by Decree No. 10,4747 and includes the Board of Directors (the main decision-making body), the National Council for the Protection of Personal Data and Privacy (an advisory body) and other specific and sectorial bodies. The members of the Board of Directors are designated by the President of the Republic, after approval by the Senate, and the advisory body includes five members from the federal executive branch (out of 23 members)8.
The ANDP is currently established as a federal public administration body, part of the Presidency of the Republic. The law provides however that the legal nature of the ANDP is transitory and may be transformed into an indirect federal public administration body (entidade da administração pública federal indireta) subject to a special autonomous regime. In July 2021,9 ANPD Governance Committee was set up to define institutional strategies and transversal strategic guidelines on: (i) public governance; (ii) risk management, transparency and integrity in the ANPD; (iii) planning; (iv) internal control mechanisms; and (v) efficiency in administrative management with the purpose of ensuring the effectiveness and reliability of monitoring, and compliance with provisions relating to the Authority.
Brazil’s new framework for cross-border data transfers follows trends across a range of countries. The LGDP falls in the category of ‘flow conditional on safeguard’, an approach that has many commonalities with countries such as those in the European Union or Argentina (Box 4.1) but it is relatively different to the approach taken by certain APEC countries including the United States. These rely on ‘ex post accountability’ mechanisms which do not prohibit the transfer of data abroad but makes firms accountable for misuse.
Although approaches to cross-border data transfers differ across countries, they can be broadly grouped into four categories, albeit with blurred boundaries (Figure 4.5). These are not mutually exclusive; different approaches can apply to different types of data even within the same jurisdiction (health data, for instance, might be subject to more stringent approaches than data related to product maintenance).
Source: Adapted from López González and Casalini (2019[5]).
At one extreme, there is no regulation of cross-border data flows, usually because there is no data protection legislation at all. While this implies no restrictions on the movement of data, the absence of regulation might affect the willingness of others to send data
The second type of approach does not prohibit the cross-border transfer of data nor does it require any specific conditions to be fulfilled, but provides for ex post accountability for the data exporter if data sent abroad is misused (e.g. firms send data but if something goes wrong they are legally accountable).
A third approach, flows conditional on safeguards, includes approaches relying on the determination of adequacy or equivalence as ex ante conditions for data transfer. These rulings can be made by a public authority or by private companies and can include requirements about how data is to be treated. Where an adequacy determination has not yet been made, firms can move data under options such as binding corporate rules, contractual clauses and consent.
The last broad type of approach, flow conditional on ad hoc authorization, relates to systems that only allow data to be transferred on a case-by-case basis subject to review and approval by relevant authorities. This approach relates to personal data for privacy reasons but also to the more sweeping category of “important data”, including in the context of national security.
Indeed, the LGPD shares commonalities with the European Union’s General Data Protection Regulation (GDPR) ‒ Regulation 2016/679. It includes principles applicable to all processing operations, the rights recognized to data subjects and the mechanisms for enabling international transfers of personal data. However, the LGPD may have wider exceptions than the GDPR (Figure 4.6).10
Note: Overlap measures the extent to which country pairs contain similar privacy and personal data protection principles in their regulation (without prejudice to different approaches to, and degrees of, enforcement). Colours capture range of overlap with red showing low overlap and green showing higher overlap. Table up to date until December 2020. New rules on personal data protection are under discussion in many countries, including in Chile and China.
Source: Casalini, López González and Nemoto (2021[6]).
The LGPD also brings Brazil’s data transfer legislation closer to that of other countries in the region such as Argentina and Uruguay. Argentina and Uruguay have been declared the European Union as providing adequate protection.11 The Colombian supervisory authority, the Superintendencia de Industria y Comercio, declared the European Union, Mexico, Korea, Costa Rica, Serbia, Peru, Norway, Iceland, and the United States (with respect to the EU-US Privacy Shield) Adequate. None of these countries have declared Brazil’s legislation adequate, however, the LGPD might help initiate discussions on facilitating cross-border data flows with these countries.12 For the time being, these countries have other mechanisms that enable the transfers of personal data such as binding corporate rules, standard contractual clauses or other certification schemes.
By contrast, the United States and Mexico have different “ex post accountability” approach to cross-border data flows. In the United States, data may generally flow freely except for specific exceptions (e.g. health data). In Mexico, transfers are conditioned on having obtained the consent of the data subject as well as having in place contractual arrangements between the data controller and the data recipient.
The ANPD may benefit from providing clear guidelines on applicable rules for the transfer of personal data to countries that have not been declared adequate. It might want to define the content of standard contractual clauses, and publish guidelines on the requirements for binding corporate rules, certifications and standards. According to ANPD’s regulatory agenda,13 the Authority will publish its regulation for international data transfer in June 2022. This is expected to provide further legal certainty to new investments and actors.
Brazil is also party to a number of plurilateral arrangements where discussion on privacy and data protection, including in the context of cross-border data flows, are taking place. Brazil takes part in Convention 108+, the Global Privacy Assembly (GPA), the Global Privacy Enforcement Network (GPEN) and is also in the Iberoamerican Data Protection Network. Brazil has also signed bilateral Memoranda of Understanding to enable further cooperation (in October 2021 with the Agencia Española de Protección de Datos (AEPD). In October 2021, ANPD published Information Security Guide for Small Agents with simplified standards and procedures for small and medium businesses, including startups and innovation companies, all with the aim of encouraging adjustment to the LGPD.
Although the LGPD creates a uniform regulatory framework that applies to all sectors of the economy, a number of sectorial regulations might affect the movement of data across borders. For instance, Resolution Nº 4.893 of the National Monetary Council14 provides that financial institutions may only hire data processing, data storage and cloud computing services from companies residing in countries with which the Brazilian Central Bank has a data exchange agreement. If no data exchange agreement exists, a specific authorization from the Central Bank is necessary for each provider.
Restrictions to the movement of data can also arise from local storage requirements. These mandate that data is stored, and sometimes processed, domestically. Such requirements are increasingly regulated under trade agreements with a view to avoiding arbitrary or unjustifiable discrimination or disguised restrictions to trade. For example, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) provides that “no party shall require a covered person to use or locate computing facilities in that Party’s territory as a condition for conducting business in that territory” (Article 14.13).15 The Brazil-Chile trade agreements also includes a similar provision specifying that one party to the agreement may not require a person from the other party to use or locate computer facilities in the territory of that party as a condition for conducting business there16 (Section 4.2).
These instruments do not, however, prevent any party from adopting or maintaining other measures to achieve a legitimate public policy objective, provided that the measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination, or a disguised restriction to trade. The CPTPP also adds that those legitimate measures shall not impose restrictions on the use or location of computing facilities greater than what is required to achieve the objective.
4.1.3. Facilitating cross-border online payments can boost online consumption
Access to and use of efficient payment systems is key to enable seamless online transactions. Policy can play an important role in creating an environment that is conducive to promoting innovation in financial services and enabling new digital payment methods. Removing regulations that hamper innovation and create entry barriers to new firms can help increase competition and promote better quality services at lower prices for customers.
The regulatory environment in Brazil is generally conducive to online payment solutions and various foreign payment services providers already operate in the country, including Paypal, Samsung Pay, Google Pay and Apple Pay. Law 12,865 regulates the Brazilian Payment System, including payment schemes and payment institutions. This law includes a broad definition of payment schemes and payment institution with the objective of modernising retail payment in Brazil. This law also sets the rules for the safe provision of payment services while encouraging competition and the entry of new players to enable the emergence of more competitive and efficient models.
Brazil has recently introduced new regulatory initiatives to foster innovation in the banking sector. One of these initiatives is the implementation of open banking in Brazil. Open banking is defined by the Central Bank of Brazil as “the sharing of data, products and services by financial institutions and other licensed institutions, at the customers’ discretion as far as their own data is concerned, through the opening and integration of platforms and infrastructures of information in a safe, agile and convenient manner”17 The purpose of this initiative is to enhance the efficiency in credit and payments markets in Brazil by promoting a more inclusive and competitive business environment, while preserving the security of the financial system and ensuring consumer protection. The first phases of the implementation of the Open banking initiative have already started and the full roll-out of the project is expected for the first half of 2022.18
Another innovative regulatory approach is the implementation of instant payments. This ecosystem aims at enabling innovation, the emergence of new business models and the reduction of social costs related to the use of paper-based instruments. The Brazilian Central Bank Communication Nº32,927 on the fundamental requirements for instant payment ecosystems states that this ecosystem must be efficient, competitive, secure, inclusive and adapted to all use cases.19 Implementation of this ecosystem is in line with the increase of non-cash transactions and the use of “e-wallets” (carteira digital) (Capgemini Research Institute, 2019[7]).
4.1.4. Intellectual property rights
Digitalisation brings new challenges for the effective protection and enforcement of intellectual property rights (IPR). Protecting copyrights and related rights are increasingly difficult as content such as music, movies, games and other media can be easily copied and distributed online. Other IPRs such as trademarks, patents and designs support product branding and protect innovative products and services.
Brazil’s intellectual property framework is currently composed of three main laws, the Industrial Property Law (Law Nº9.27920), the Copyright Law (Law Nº9.61021), and the Software Law (Law Nº9.60922). The Industrial Property Law regulates trademarks, patents, utility models, industrial designs and geographical indications. The Copyright Law regulates author’s rights, including moral rights while the Software Law provides for a specific copyright regime applicable to computer programs.
Brazil’s current legislation covers all major aspects contained in the WTO TRIPS Agreement (WTO, 2017[8]). Regarding the protection of industrial property, Brazil is signatory to most major international agreements including the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty (PCT), and the Strasbourg Agreement Concerning the International Patent Classification. In 2019, Brazil joined the WIPO-administered international trademark system (the Madrid system) that provides for trademark protection in a large number of countries. Regarding copyright protection, Brazil is part of the Berne Convention for the Protection of Literary and Artistic Works and of the United Nations Universal Copyright Convention.
Brazil has not, however, signed a number of key WIPO instruments such as the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT).23 The WCT deals with the protection of works and the rights of their authors in the digital environment as well as with the protection of computer programs and compilations of data (“databases”). Both computer programs and databases are protected as literary and artistic works. Ratification of this treaty, which already has 107 contracting parties, including other Latin American countries such as Argentina, Chile, Colombia and Mexico, would further enhance copyright protection and enforcement in Brazil. The WPPT deals with the rights of two kinds of beneficiaries, particularly in the digital environment: (i) performers (actors, singers, musicians, etc.); and (ii) producers of phonograms (persons or legal entities that take the initiative and have the responsibility for the fixation of sounds). The WPPT also counts 106 contracting parties, including most countries in the region such as Argentina, Chile, Colombia, Costa Rica, Ecuador, Paraguay, and others.
One of the main challenges Brazil is facing is lengthy pendency times for patent and trademark applications (Figure 4.7). Following the WIPO World IP indicators, in 2018, Brazil’s average pendency times for patent application (from request for examination to the first office action) was 80.4 months, which far exceeds other countries such as India (36 months), Ecuador (24 months), China (15.4 months), United States (15.4 months), Colombia (7.1 months) or Mexico (3 months). For trademark applications, the pendency time from filing to final decision is 18 months. This pendency time also exceeds that of other countries in the region such as Canada (16.9 months), Ecuador (4 months), China (9 months), Colombia (9.7 months), Mexico (5.2 months) and United States (9.6 months).24
Note: This chart builds from data from the WIPO Statistics Data Center and reflects pendency time for patents, from request for examination to the first office action and for trademarks, from filing to final decision. WIPO collects data from IP offices using a common questionnaire and methodology. However, due to differences in patent procedures between offices, data cannot be fully harmonized. Therefore caution should be exercised when making comparisons across offices.
Source: Authors’ elaboration, data from the WIPO IP Statistics Data Center, https://www3.wipo.int/ipstats/index.htm?tab=patent
Cutting down processing delays and reducing the existing backlog of applications has become a priority for the National Institute of Industrial Property (INPI) (WTO, 2017[8]). A specific program was enacted in August 2018 to combat backlog in the examination of patent applications. The Patents Direction of the INPI committed to reduce the backlog of 149 000 applications by 80% in two years.25 A similar effort is also being carried out to reduce backlog of trademark examination and to fully roll out the Madrid system.
Brazil is part to bilateral agreements between patent offices to promote cooperation and work-sharing under, in particular, the Patent Prosecution Highway Pilot initiative. The INPI has signed Patent Cooperation Treaties with national patent offices, such as USPTO (US), JPO (Japan), EPO (European Patent Office), SIPO (China), UKIPO (UK), DKPTO (Denmark) and PROSUL Patent Institutes (Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Paraguay, Peru and Uruguay).26 These initiatives accelerate patent examination by reusing search and examination results carried out by partner offices.
4.1.5. Creating an enabling environment for digitally ordered goods
One important facet of the evolving digital trade environment is the growth in trade in digitally ordered goods, many of which are shipped in individual consignments (López González and Sorescu, 2021[9]). Trade in parcels allow individuals to access the goods they need in times of COVID-19 where physical distancing is needed (OECD, 2020[2]) and can be an important mechanism for Brazilian firms, especially smaller ones, to engage in trade (Chapter 2). In this respect, the extent to which goods are able to move to and from the border as well as the mechanics of getting these across the border can be important determinants of parcel trade.
Indeed, recent empirical analysis suggests that progress on digital connectivity and trade facilitation measures, such as increased transparency or automating border processes, can have a greater trade-enhancing impact on parcel trade than on “traditional” trade. By contrast, greater differences in regulations across countries in transportation, courier or logistics services are associated with lower trade in parcels (López González and Sorescu, 2021[9]). Enabling benefits from trade in parcels requires a comprehensive policy approach across a number of areas and throughout the parcel supply chain.
Receiving goods and getting them to and from the border
Postal and courier services are a key element of the parcel trade environment. Indeed, the rise in online retail has been accompanied by a rise in demand for parcel delivery. This is satisfied by postal or express delivery. However, the regulatory environment for courier services in Brazil remains highly restrictive. After China and India, Brazil has the most restrictive environment for such services (Figure 4.8, Panel a). This matters because restrictiveness is associated with less reliable service provision (Figure 4.8, Panel b) and less parcel trade. In particular, restrictions on foreign entry, barriers to competition and regulatory transparency, can be an issue in Brazil.
Note: In Panel b: the vertical axis identifies the country’s STRI for Courier Services (ranging from 0 to 1, in an increasing scale of restrictiveness). The horizontal axis shows the Postal Reliability Index from UPU identifying reach, relevance, resilience and reliability of deliveries (ranging from 0 and 100, a higher number implies greater reliability).
Source: Own calculations based on OECD STRI and OECD (2020[2]).
Getting goods across the border – upgrading the trade facilitation environment
Procedures at the border also play an important role in the parcel trade ecosystem, and more broadly in the context of digitally ordered goods. The ease and speed with which digitally ordered goods can move across borders is key to ensuring affordable access to goods and enabling exports, especially for smaller firms (López González and Sorescu, 2019[10]) and particularly for trade in parcels (López González and Sorescu, 2021[9]). With more goods to clear and inspect at customs due to growing trade in digitally ordered parcels, workloads are growing and monitoring and enforcing standards as well as risk management systems may be more difficult to implement, especially in the context of COVID-19 where additional challenges related to physical distancing are also at play. A better trade facilitation environment can help countries deal with these new challenges and reduce trade costs.
In this respect, Brazil has been focusing on the use of technologies for trade facilitation through the new Single Window programme (siscomex.gov.br). Where parcels are concerned, Brazilian Customs has recently updated its electronic guide for international express deliveries, including provisions on goods used on the prevention and treatment of COVID19.27 Brazil is also working to advance in new systems integration and data sharing solutions based on the concept of Integrated Services for MSMEs in International Trade (ISMIT). In this sense, the Brazilian government is making efforts towards the implementation of a digital platform on trade related services in partnership with the British government under the Trade Facilitation Programme.
On 29 March 2016, Brazil ratified the WTO Trade Facilitation Agreement (TFA), and since then Brazil has made good progress implementing the TFA as measured by the OECD Trade Facilitation Indicators (Box 4.2). This is especially the case in terms of external border agency co-operation, and formalities including in terms of simplification of documentary requirements and streamlining of border procedures. Brazil also continues to improve in the area of automation. The new Single Window is now fully operational for export processes and in phase of gradual implementation for import processes,28 and the system can automatically process customs declarations, including those submitted in machine readable formats. In addition, the introduction of machine learning technologies for risk management allows for the automatic release of a high share of consignments shortly after the submission of customs declarations. However, more needs to be done to continue improving internal and external border agency cooperation, which remain, in relative terms, low (Figure 4.9).
Note: The Trade Facilitation Indicators are updated every two years, 2019 is the latest available year; process to update to 2021 is ongoing.
Source: Own calculations from OECD Trade Facilitation Indicators.
Brazil continues to be one of the top performers in terms of trade facilitation in Latin America together with countries such as Costa Rica, Chile, Mexico, and Colombia (Figure 4.10. Brazil is a top performer in trade facilitation in the LAC region).
To further improve the trade facilitation environment, Brazil has been completing the final implementation phase of the Brazilian Authorized Economic Operator (AEO) Programme.29 It grants certification to companies whose management processes minimize risks and that ensure compliance with tax and customs obligations.30 The AEO programme counts 378 certified operators with a further 105 certification requests being processed.31 However, while Brazil had targeted to cover 50% of Brazilian foreign trade transactions under this programme by 2019, the percentage of AEO operators against the total number of traders is of 20%.32 Nevertheless, its coverage is expected to continue increasing as it has done recently.
Note: The Trade Facilitation Indicators are updated every two years, 2019 is the latest available year; the process to update to 2021 is ongoing.
Source: Own calculations from OECD Trade Facilitation Indicators.
Digitally ordered goods are often delivered individually and fall below de minimis thresholds. These refer to “a valuation ceiling for goods, including documents and trade samples, below which no duty or tax is charged and clearance procedures, including data requirements, are minimal” (UNECE, 2012[11]). With simplified clearance procedures and tax exemptions, high de minimis levels can enable more parcel trade, reducing trade costs. However, it can also favour foreign producers over domestic ones, if only foreign producers are VAT exempt, and have implications for customs revenue (Latipov, McDaniel and Schropp, 2018[12]). Too low a threshold, in turn, risks longer clearance times for parcels undermining just-in-time delivery. While many countries have already put in place de minimis levels, Brazil only has a specific regime covering postal packages valued at USD 50 or less shipped for personal (non-commercial) purposes (WTO, 2017[8]).33
The 11 OECD TFIs were developed in 2012 to support governments in their efforts to improve their border procedures, reduce trade costs and reap greater benefits from international trade. They currently cover the full spectrum of administrative procedures at the border for more than 160 countries across income levels, geographical regions and development stages. The TFIs are available for 2012, 2015, 2017 and 2019.
They follow closely the structure of the WTO TFA, but the families of measures in the TFA have been re-organised, in order to take into account similarities between measures, underlying shared components, as well as areas where further distinctions were warranted. An additional indicator going beyond the scope of the TFA was added to capture elements of good governance and impartiality of border administrations.
The TFIs are composed of a set of variables seeking to reflect not only the regulatory framework in the concerned countries, but delve, to the extent possible, into the state of implementation of various trade facilitation measures. Overall, the indicators measure the actual extent to which countries have introduced and implemented trade facilitation measures in absolute terms, but also their performance relative to others, using a series of quantitative measures on key areas of the border process. The TFIs take values from 0 to 2, where 2 designates the best performance that can be achieved.
This contrasts with recent trends set by other countries in the region, such as Mexico and Peru, which have already set de minimis thresholds without broad exceptions (Table 4.2). Brazil might want to consider increasing the level and scope of its de minimis regime, making it applicable beyond postal shipments and also covering Business to Consumers (B2C) shipments. This might help reduce trade cost for importation and diminish delays and paperwork at the border. In 2019, it still took close to 24 hours on average in Brazil to clear products at customs while it took less than eight hours on average in Peru respectively.34 While good progress has been made implementing pre-arrival processing and setting up a Single Window, continued support to implementing this and further automating trade processes will help Brazil close existing gaps with neighbouring countries’ customs clearance time.
4.1.6. Lowering trade barriers for ancillary services is essential to complete digital transactions
Digital transactions are supported by a range of services, such as communication and network services, computer services (e.g. software, applications, and technical assistance), financial, or distribution services (e.g. online wholesale or retail platforms). Supporting services provide essential inputs to facilitate digital trade, lower costs, and boost competitiveness. Hence, an open and enabling regulatory environment underpinning supporting services is key to promoting a dynamic digital economy (López González and Ferencz, 2018[13]).
Nonetheless, in Brazil, the level of trade restrictiveness remains higher across such sectors than the regional average (Figure 4.11). In commercial banking, where Brazil has the largest gap compared to regional and international best practice, key trade barriers include the need to obtain prior approval for the admission of foreign entities in the sector based on international agreements, reciprocity or national interest. Recent reforms have been put in place that ease the approval process through the Central Bank of Brazil for new branches of foreign financial institutions.35 Moreover, the establishment of foreign bank branches and the provision of banking services on a cross-border basis are not allowed (OECD, 2019[14]).
Note: The STRI takes values between zero and one, one being the most restrictive. Scale adjusted to 0.5. The regional average is based on the OECD STRI sectoral indices of Chile, Colombia, Costa Rica, Peru, and Mexico in 2020.
Source: OECD STRI regulatory database, 2020.
Digital orders often translate into physical delivery of goods and services where the quality, timeliness, and cost of transportation and logistics services are incremental to the competitiveness of firms selling through digital platforms. Regulation and trade policy can play a major role in reducing the market entry barriers for transport and logistics providers, enabling more efficient customs procedures at borders.
In the case of Brazil, trade barriers affect particularly logistics services (cargo handling and storage services) and maritime transport services. In logistics services, barriers related to market entry for foreign firms, state ownership in major service providers across airports, ports and rail facilities, as well as lengthy procedures at customs are among the key impediments. In maritime transport services, sectoral barriers include, among others, limitations for foreigners to carry out cabotage operations as well as barriers related to vessel registration by foreigners.36
Conversely, the regulatory environment is less restrictive in road freight and air transport services. In the latter sector, Brazil has been actively introducing reform measures over the past years and it is the only sector where Brazil’s STRI is well below the OECD average (Box 4.3).
In sectors supporting digital trade more directly, including computer services or distribution services, Brazil’s regulatory environment is more open albeit its STRIs remain slightly above both regional and OECD averages. This is mostly due to impediments on economy-wide measures, including barriers related to foreign entry, restrictions on the movement of people, and discriminatory preferences for local inputs in public tenders. Lowering these barriers are essential to increase competition, and create incentives for firms to lower prices and provide higher quality services to consumers and downstream businesses.
On 13 December 2018, Brazil implemented significant reforms on foreign investment in local airlines through Presidential Measure (PM) No. 863/2018. Congress converted the PM into Federal Law No. 13,842/2019 on 17 June 2019, embedding the reforms into the Brazilian Aeronautics Code (Federal Law N°7,565/1986). Key reforms included the removal of a 20% cap on foreign participation in Brazilian airlines, allowing foreigners full ownership of the share capital. Limitations were lifted on foreign control and management of Brazilian airlines, together with restrictions on the issuance and transfer of shares to foreigners.
These reforms resulted in Brazil’s STRI scores in air transport to drop by 50% in 2018, well below the STRI average across countries. In 2019 and 2020, Brazil had the third lowest STRI in this area after Chile and Colombia.
Source: STRI database, 2020.
4.1.7. Trade and competition in Brazil’s digital economy
The digital transformation has significant implications on market competition, changing firms’ business models, production processes, and market access conditions. On the one hand, digitalisation stimulates competition as market entry barriers become easier to overcome, particularly for smaller players such as SMEs, and the costs of scaling production, advertising and distribution become lower. Moreover, digitalisation can also foster more rapid growth often without the need to increase firm size and tangible assets (OECD, 2018[15]). On the other hand, digitalisation also raises new concerns about maintaining competitive conditions. For one, developing digital products typically requires significant upfront costs but near-zero marginal costs, leading to substantial economies of scale that can incentivise market concentration and higher mark-ups. Intangible assets (e.g. IP, software, and data) are therefore becoming more important for firms to remain competitive in a digital era, resulting in advantages to firms that have better means to collect data and more resources to protect and enforce IP (OECD, 2016[16]). Lastly, digitalisation also reinforces network effects particularly for digital platforms whose services become more valuable as their user base grows, leading to new sources of concentration.
As a result, competition policy is more intertwined with trade policy than ever (Figure 4.13). Driven by the shared objective to enhance welfare through more efficient allocation of resources, lowering trade barriers goes hand in hand with promoting effective competition policies. In the digital era, this complementarity is even more pronounced as efficient trade and competition policies will affect an increasingly global rather than local marketplace.
Moreover, gains from ambitious trade liberalisation can be thwarted by insufficient or ineffective domestic competition policies that turn a blind eye on firms exploiting their market positions at the expense of innovation and customer welfare. Efficient competition regimes can support trade policies by providing access to remedies against anti-competitive practices such as market distorting agreements between competitors, abuses of dominant positions, or harmful vertical agreements between suppliers and distributors. Digitalisation has shed new light on the importance of competition in support of trade policies, especially as digital firms operate more easily across borders, market definitions are increasingly re-defined by a borderless Internet, and unlawful practices become more difficult to detect.
Source: Authors’ elaboration.
Brazil’s regulatory framework on competition has undergone important changes in the past decade after the introduction of a new Competition Law in 2011 (Law N°12.529/2011). This new instrument brought important changes for Brazil’s competition law and policy, including the creation of an autonomous competition agency and improving antitrust enforcement mechanisms. The reforms also contributed to better streamlining competition law in Brazil in accordance with international best practices (OECD, 2019[17]).
The competition agency, the Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica – CADE), is structured in three bodies: (1) the General Superintendence (GS); (2) the Administrative Tribunal for Economic Defense; and (3) the Department of Economic Studies. The GS is responsible for initiating and conducting investigations, while the Administrative Tribunal adjudicates the cases investigated by the GS. The Department of Economic Studies is responsible for advising the GS and the Administrative Tribunal and developing studies to ensure CADE’s technical and scientific update.
Over the past years, CADE has investigated a number of antitrust cases related to market behaviour by firms participating in digital trade in Brazil (Table 4.3). Some of these cases highlighted the new challenges that digitalisation imposes for investigating potential antitrust violations in the digital era, such as challenges in the evidence gathering process in an increasingly data-driven and automated business environment. The cases also shed light on the increased market power that digital platforms may exercise on customers and downward business customers (e.g. through the imposition of conditions that prohibit or limit how these will engage with other competitors).
CADE also faces some challenges that are common to many competition authorities across the globe. For one, antitrust investigations often face long delays as cases become more complex to pursue creating lengthy backlog and undermining effective and speedy remedies. For most of the cases presented above, it took several years to arrive at an outcome. Moreover, while CADE has been particularly active in merger control and cartel enforcement, relatively few cases focused on abuses of dominance (OECD, 2019[17]). As digitalisation accelerates firms’ ability to grow and data-driven business models reshape market dynamics, it may be warranted to further prioritise such investigations to promote long-term consumer welfare.
Further expanding the benefits of digitalisation in the Brazilian economy will depend on complementing trade liberalisation with strengthening the competition framework and enforcement. In turn, a more robust competition regime will be conducive to more digital imports and exports of goods and services benefitting Brazilian consumers on a wider scale. CADE is well positioned to play a crucial role in promoting this, and to undertake further steps to identify and address the emerging challenges that digitalisation presents to effective competition in Brazil’s digital economy.
4.2.1. Brazil and the international regulatory framework for digital trade
Brazil has been a member of the WTO since its establishment in 1995, and participates actively in its work and while there is no explicit WTO agreement dedicated to digital trade, the existing regulatory framework covers important aspects of the digital trade environment. Indeed, as foreshadowed in Chapter 1, the General Agreement on Trade in Services (GATS) establishes important rules for digitally enabled and delivered services and the General Agreement on Tariffs and Trade (GATT) and related agreements play an important role for goods that are digitally ordered (Section 1.1 of Chapter 1).
More concretely, and with respect to services relevant for digital trade, Brazil has made specific commitments on basic telecommunications services (GATS/SC/13/Suppl.2), financial services (GATS/SC/13/Suppl.3/Rev.1), distribution services and courier services. However, there are some sectors where Brazil has no sectoral commitments (although horizontal commitments apply), such as computer services, which may affect clarity on the applicable trade rules for key digitally enabled services. Computer services is generally characterised by high levels of commitments both in the GATS and in regional trade agreements, including among countries in the Latin America region (e.g. see Argentina (GATS/SC/4), Uruguay (GATS/SC/91) or Venezuela (GATS/SC/92)).
The importance of computer services has grown significantly in the past two decades, driving the development of the knowledge-based and data-driven economy. It covers a broad range of activities, from installation of computer hardware to software implementation and data processing services. As such, it plays an essential role in building the digital infrastructure needed to empower the digital transformation across other sectors (e.g. enabling the digital delivery of other goods and services). In Brazil, in 2018, computer services exports accounted for about USD 1.97 billion while imports were worth USD 3.8 billion attesting to the importance of the sector.
However, the applied regime for computer services is relatively restrictive when compared to OECD countries and regional trade partners such as Chile, Colombia or Costa Rica (Figure 4.14). Recent empirical work demonstrates that having legally binding services commitments in the GATS and regional trade agreements closely aligned with the applied regime have a positive impact on trade (Lamprecht and Miroudot, 2018[19]). Moreover, binding full commitments (i.e. completely lifting trade barriers in the sector) offers the highest level of certainty for suppliers as it prevents the introduction of new trade barriers, and further boost trade activities.
Brazil participates in a number of international instruments that currently affect rules related to digital trade (Table 4.4). Brazil is a party to most WTO Agreements (except the ITA) but it is not party to some of the WIPO-administered treaties and the UN Convention on the Use of Electronic Communications in International Contract. Also, some key instruments such as the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks and the inclusion of additional commitments in financial services into Brazil’s GATS schedule were only achieved recently. Further participation in international agreements relevant for digital trade is important to promote legal certainty and reduce regulatory frictions for businesses to engage in cross-border digital trade.
Brazil has also adopted a pro-active approach at the WTO Joint Statement Initiative negotiations on e-commerce. So far, Brazil has proposed to include rules on many issues, such as e-contract, e-authentication, unsolicited commercial communications, permanent extension of the moratorium (custom duties), paperless trading, cross-border data flows and privacy protection (INF/ECOM/27/Rev.1). Brazil has also proposed rules on more advanced issues, such as single window’s data exchange and system interoperability and use of technology for the release and clearance of goods (INF/ECOM/27/Rev.1/Add.1).
4.2.2. Brazil and regional trade agreements / arrangements
Brazil’s regional trade agreements
Brazil’s regional trade policy is influenced in large part by its membership to the Southern Common Market (MERCOSUR) together with Argentina, Paraguay, Uruguay, and Venezuela. As part of MERCOSUR, Brazil is party to a number of preferential trade agreements with key trade partners in the region such as Chile, Bolivia, Mexico, Peru, Colombia, Ecuador, and Cuba. Outside the region, MERCOSUR has concluded agreements with, among others, India, Egypt and Israel. Also, in 2019, MERCOSUR concluded negotiations with EFTA and reached a political agreement with the European Union on a comprehensive trade agreement in the context of a wider EU-MERCOSUR Association Agreement, which includes provisions on e-commerce.37 Both of these agreements are still undergoing legal scrubbing. Negotiations are also ongoing with other countries and regional trade blocks.
Apart from the agreement with the European Union, the MERCOSUR agreements do not cover digital trade or e-commerce provisions, and most of them do not cover services. Within MERCOSUR, however, services trade liberalisation has been advanced through the Protocol of Montevideo on Trade in Services in the MERCOSUR which was signed in December 1997, entered into force in 2005 and had to be implemented before 2015 (MERCOSUR, 1997[20]).38 The Protocol includes specific commitments to liberalise services within the region, including with respect to services that enable digital trade such as computer services, telecommunications, distribution and financial services. In the case of Brazil, this includes coverage of computer services with no limitations on modes 1-3 (unlike the GATS where this sector is not listed in it schedule) as well as expanded commitments in telecommunications services (Decreto Legislativo 1016/2005). However, some uncertainties remain with respect to the application of open commitments for modes 1 and 2 on digitally deliverable good and services.39
In addition, the MERCOSUR Agreement on Electronic Commerce was concluded on 29 April 2021. This Agreement represents an important step towards deepening the integration process in the region and includes provisions on: customs duties on electronic transmissions; electronic signature and authentication services; online consumer protection; protection of personal data; cross-border transfer of information by electronic means; location of computing facilities; principles on the access and use of the Internet for electronic commerce; unsolicited direct commercial communications; electronic commerce facilitation; and cooperation, among others. Mercosur’s framework on electronic commerce also includes Resolution 37/2019 on the protection of consumers in electronic transactions and the Agreement on Mutual Recognition of Electronic Signatures of December 2019.
Outside of MERCOSUR, only the Brazil-Chile FTA includes an e-commerce chapter.40 This chapter covers, among others: legal framework for electronic transactions; e-signature; online consumer protection; protection of personal data; paperless trade administration; cross-border transfer of information by electronic media; location of computer facilities; and unsolicited electronic commercial communications.41
The coverage of e-commerce provisions in the Brazil-Chile FTA and in MERCOSUR’s Agreement on Electronic Commerce is comparable to that in the CPTPP and the USMCA. It should also be highlighted that both the Brazil-Chile FTA and MERCOSUR’s Agreement on Electronic Commerce include advanced provisions on cross-border data flows and location of computer facilities, which would contribute to promoting cross-border data flows that are essential to digital trade.
Although Brazil has thus far only included e-commerce provisions in its agreements with Chile, the European Union and MERCOSUR, these three agreements include comprehensive and ambitious commitments towards liberalising digital trade and provide a good basis for including similar provisions in Brazil’s future trade agreements as well as updating existing ones.
Rules on e-commerce are not the only ones that could contribute to promoting digital trade. For instance, as described in Section 4.1.1, telecommunications services play a crucial role to expand digital trade. The Telecommunications chapter in the Brazil-Chile FTA and the Service and Establishment chapter of the EU-MERCOSUR agreement, as well as similar provisions in the EFTA-MERCOSUR Agreement set out rules and principles that would be conducive to digital trade. These chapters include not only the ones already included in the WTO Reference Paper on regulatory principles for telecommunications (e.g. on anti-competitive practice, independent regulatory bodies and interconnection), but also cover new areas and emerging issues (e.g. net neutrality, treatment of important suppliers; disaggregation of network elements; co-location and flexibility in the choice of technologies (Brazil-Chile) and access to essential facilities, scarce resources, and international mobile roaming services (EU-MERCOSUR)).
The impacts of RTAs on digital trade would also depend on the extent of services liberalization achieved under those agreements, particularly in services that are ancillary to the success of digital trade such as telecommunications, distribution, financial services but also transport and logistics services.
The challenge that Brazil faces, however, is that digital trade is not covered in most of its trade agreements. Deeper regional integration and enhanced international cooperation would benefit Brazilian exporters of digital goods and services, particularly as Brazilian firms tend to export more to geographically closer partners (OECD, 2016[21]). Further digital integration of the South American market could be further undertaken through MERCOSUR and other existing regional frameworks as well as through comprehensive RTAs such as the one that Brazil has done with Chile. Ongoing trade negotiations between MERCOSUR and several other countries including Korea, Canada, and Singapore, encompass discussions on electronic commerce providing an opportunity to strengthen coverage of digital trade provisions in trade agreements.42 Continued proactive engagement on the international arena, as is the case in the active involvement of Brazil in the WTO Joint Statement Initiative negotiations on e-commerce, also remains important in order to promote multilateral solutions for the pressing digital trade challenges.
Other initiatives toward regional digital integration
On the regional level, one of the instruments for promoting regional integration is the Digital Agenda for Latin America and the Caribbean (eLAC). At the eLAC regional conference in November 2018, participating countries approved the eLAC 2020 Digital Agenda, which includes 30 goals to seek “regional cooperation to continue moving forward on inclusion, the digitalization of production, skills development among the population, as well the promotion of open government and governance that stimulates collaboration between countries”.43 Among others, eLAC 2020 Digital Agenda targets to strengthen regional digital market through various goals:44
Goal 8: Promote a regional digital market strategy to increase trade, expand the digital economy and strengthen the competitiveness of Latin America and the Caribbean, through incentives, regulatory coherence, integration of digital infrastructure, the development of digital platforms of goods, services and content, and cross-border data flows.
Goal 9: Foster measures for regional trade facilitation through the use of digital technologies, institutional coordination and interoperability among different national foreign trade systems.
The Seventh Ministerial Conference on the Information Society in Latin America and the Caribbean was held on the 23-26 November 2020 in Quito, Ecuador (as a virtual meeting). The Conference aimed at strengthening cooperation on a range of digital issues and renew agreement on pursuing the Digital Agenda while tackling the challenges of COVID-19.45 In this regard, the newly agreed eLAC 2022 Digital Agenda for Latin America and the Caribbean46 reiterates the goal of promoting a regional digital market strategy that facilitates cross-border e-commerce and digital trade. The acknowledged mechanisms to achieve this strategy include integration of digital infrastructure, harmonization of regulation, promotion of free flow of data with trust in accordance with domestic legislation, trade facilitation, improved postal and logistics services, and implementing regulatory frameworks that encourage innovation in digital payment services.
References
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[7] Capgemini Research Institute (2019), World Payment Report.
[3] Casalini, F. and J. López González (2019), “Trade and Cross-Border Data Flows”, OECD Trade Policy Papers, No. 220, OECD Publishing, Paris, https://dx.doi.org/10.1787/b2023a47-en.
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[19] Lamprecht, P. and S. Miroudot (2018), “The value of market access and national treatment commitments in services trade agreements”, OECD Trade Policy Papers, No. 213, OECD Publishing, Paris, https://dx.doi.org/10.1787/d8bfc8d8-en.
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[9] López González, J. and S. Sorescu (2021), “Trade in the time of parcels”, OECD Trade Policy Papers, No. 249, OECD Publishing, Paris,, https://doi.org/10.1787/0faac348-en.
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[20] MERCOSUR (1997), Protocol of Montevideo on Trade in Services in the MERCOSUR, http://www.sice.oas.org/trade/mrcsr/montevideo/pmontevideo_s.asp.
[22] Nordås, H. (2016), “Services Trade Restrictiveness Index (STRI): The Trade Effect of Regulatory Differences”, OECD Trade Policy Papers, No. 189, OECD Publishing, Paris, https://dx.doi.org/10.1787/5jlz9z022plp-en.
[2] OECD (2020), Connecting Businesses and Consumers During COVID-19: Trade in Parcels, https://www.oecd.org/coronavirus/policy-responses/connecting-businesses-and-consumers-during-covid-19-trade-in-parcels-d18de131/.
[17] OECD (2019), OECD Peer Reviews of Competition Law and Policy: Brazil, https://www.oecd.org/daf/competition/oecd-peer-reviews-of-competition-law-and-policy-brazil-ENG-web.pdf.
[14] OECD (2019), OECD Services Trade Restrictiveness Index (STRI): Brazil 2019, https://www.oecd.org/trade/topics/services-trade/documents/oecd-stri-country-note-brazil.pdf.
[15] OECD (2018), Maintaining competitive conditions in the era of digitalisation, https://www.oecd.org/g20/Maintaining-competitive-conditions-in-era-of-digitalisation-OECD.pdf.
[1] OECD (2017), Services Trade Policies and the Global Economy, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264275232-en.
[16] OECD (2016), Big Data: Bringing competition policy to the digital era, https://one.oecd.org/document/DAF/COMP(2016)14/en/pdf.
[21] OECD (2016), SERVICES AND PERFORMANCE OF THE BRAZILIAN ECONOMY: ANALYSIS AND POLICY OPTIONS Report prepared for the Services Trade Restrictiveness Index workshop 1, https://economiadeservicos.com/wp-content/uploads/2015/04/STRI-Brazil-policy-paper.pdf.
[11] UNECE (2012), “Trade facilitation implementation giude”, http://tfig.unece.org/contents/deminimis.htm.
[8] WTO (2017), Trade Policy Review Body TRADE POLICY REVIEW REPORT BY THE SECRETARIAT BRAZIL Revision.
Notes
← 1. Lei No. 12.965 (Marco Civil da Internet) de 23 de Abril de 2014 estabelece princípios, garantias, direitos e deveres para o uso da Internet no Brasil, available at http://www.planalto.gov.br/ccivil_03/_ato2011-2014/2014/lei/l12965.htm (last accessed on 1 September 2020).
← 2. The Digital STRI is a rich basis to assess the extent to which regulatory regimes in different countries diverge from one another. Regulatory heterogeneity using the STRI methodology can be assessed by comparing divergences measure by measure in country pairs (Nordås, 2016[22]). For each measure the country pair has a score of zero if both countries have the same answer (similar regulation) and one if they have different answers (diverging regulation). The scores are then aggregated using the STRI methodology in order to develop regulatory heterogeneity indices for each country pair. The regulatory heterogeneity indices are useful for monitoring regulatory convergence, particularly in cases where trade agreements include regulatory cooperation (Nordås, 2016[22]).
← 3. See also Figure 10 in Casalini, López González and Nemoto (2021[6]) which compares privacy principles across countries showing a near full overlap between GDPR and the Brazilian General Data Protection Law.
← 4. Article 3 of law nº 13,709/2018 (LGPD).
← 5. Recommendation of the Council concerning Guidelines governing the Protection of Privacy and Transborder Flows of Personal Data (2013), C(80)58, as amended on 11 July 2013 by C(2013)79.
← 6. Article 55-D, Law Nº 13,709/2018 (LGPD) and Article 4 of Decree Nº10,474, 26 August 2020.
← 7. Decree Nº 10,474 of 26 August 2020.
← 8. Article 58-A, Law Nº 13,709/2018 (LGPD).
← 9. Portaria Nº15 of 21 July 2021.
← 10. For instance, Article 4(IV), provides that the LGPD shall not apply to the processing of personal data originating from outside the Brazilian territory and which are not subject to communication, shared use of data with Brazilian processing agents or subject to international transfer of data with other country than the country of origin, provided the country of origin provides a degree of personal data protection consistent with the provisions of the LGPD.
← 11. To date, Argentina has recognised Uruguay, members of the European Union and of the European Economic Area, the United Kingdom, Swiss Confederation, Guernsey, Jersey, Isle of Man, Faroe Islands, Canada only in respect of their private sector, Andorra, New Zealand and Israel (Disposición 60 ‒ E/2016, 16 November 2016 and Resolucion 34/2019, 22 February 2019). Uruguay has recognised Argentina, members of the European Union and of the European Economic Area, the United Kingdom, Switzerland, Guernsey, Jersey, Isle of Man, Faroe Islands, Canada only in respect of their private sector, Andorra, New Zealand, Israel, and transfers to the United States within the Privacy Shield framework (Resolucion 4/2019, Acta 3/2019, 12 March 2019).
← 12. For instance, the European Union has communicated its plan to launch discussions with Brazil under the adequacy mechanism of the EU GDPR (https://ec.europa.eu/commission/sites/beta-political/files/communication_from_the_commission_to_the_european_parliament_and_the_council.pdf).
← 13. Portaria Nº11 of 27 January 2021.
← 14. Available at: https://www.in.gov.br/en/web/dou/-/resolucao-cmn-n-4.893-de-26-de-fevereiro-de-2021-305689973. The same requirement was previously foreseen in Article 16 of Resolution Nº 4.658 of the Brazilian Central Bank which was revoked.
← 15. Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Chapter 14, Article 14.13.
← 16. Article 10.13 Brazil-Chile FTA.
← 17. Banco Central do Brasil, Communication Nº 33,455 of 24 April 2019 “discloses the fundamental requirements for the implementation of open banking in Brazil”.
← 18. Banco Central do Brasil, Joint Resolution Nº3 of 24 June 2020.
← 19. Banco Central do Brasil Communication nº 32927 of 21 December 2018, point 2.
← 20. Lei nº 9.279, Regula direitos e obrigações relativos à propriedade industrial, 14 May 1996.
← 21. Lei nº 9.610, Altera, atualiza e consolida a legislação sobre direitos autorais e dá outras providências, 19 February 1998.
← 22. Lei nº 9.609 Dispõe sobre a proteção da propriedade intelectual de programa de computador, sua comercialização no País, e dá outras providências, 19 February 1998.
← 23. See https://www.wipo.int/treaties/en/ip/wct/. Brazil is a party to 14 of the 26 treaties administered by the World Intellectual Property Organization (WIPO).
← 24. WIPO IP Statistics Data Center, last updated April 2020, https://www3.wipo.int/ipstats/index.htm?tab=patent.
← 25. Relatório de Atividades 2019, Instituto Nacional da Propriedade Industrial.
← 26. WIPO webpage https://www.wipo.int/pct/en/filing/pct_pph.html.
← 27. See https://www.gov.br/receitafederal/pt-br/assuntos/aduana-e-comercio-exterior/manuais/remessas-postal-e-expressa.
← 28. See Brazilian National Single Window Project (October 2021), http://siscomex.gov.br/wp-content/uploads/2021/10/BRAZILIAN-SINGLE-WINDOW.pdf.
← 29. Trade facilitation measures for Authorized Operators are required under the TFA Art. 7.7.
← 30. The certified companies gain a broad list of benefits such as reduced release times, lower rates of Customs examinations, the possibility to submit pre-arrival declarations and to request immediate release of cargo, and a direct communication channel with Customs to solve issues or pose questions. It is said that, compared to regular operations, release time for AEO is 65% below the average release time at export and 81% below at import in Brazil, while the number of inspection for AEO is 77.5% lower at export and 74.5% lower at import. https://mag.wcoomd.org/magazine/wco-news-88/brazil_aeo/.
← 31. As of August 2021, https://www.gov.br/receitafederal/pt-br/assuntos/aduana-e-comercio-exterior/importacao-e-exportacao/oea
← 32. TFIs, H111.
← 33. According to WTO (2017[8]):“Virtually all international e-purchases are subject to a 60% flat/single equalization tax on the purchase price covering/compensating customs duty and other internal taxes/charges on imports. Certain medicines (upon submission of specific documentation) and printed books or periodicals are the only exceptions to these tax requirements. An exemption (excluding the ICMS tax) for packages valued at USD 50 or less applies only to remittances issued by an person to another person for personal use or gifts of lower value but not for commercial operations. A Simplified Taxation Regime applies to goods not exceeding USD 3 000.”
← 34. OECD Compare your Country 2019.
← 35. See among others, Presidential Decree 10,029, 2019 authorising the Central Bank of Brazil to recognize the establishment of new branches as being in the interest of the Government, as well as Circular 3.977 recognizing the foreign participation in the capital of financial institutions domiciled in Brazil as also being in the interest of the Government.
← 36. Note that in May 2021, Brazil decided not to renew its agreement on maritime transport with Argentina, Chile and Uruguay which provided for preferential conditions to the ships under the flag of one of the signatory countries.
← 37. The draft Service and Establishment chapter of the EU-MERCOSUR trade agreement, which may be amended before being signed by the parties, includes, among others, references to customs duties on electronic transmissions; principle of no prior authorisation; conclusion of contracts by electronic means; electronic signature and authentication services; unsolicited direct marketing communications; and consumer protection.
← 38. Paraguay’s ratification of the Protocol is still pending. See http://www.sice.oas.org/Trade/MRCSR/montevideo/pmontevideo_s.asp.
← 39. Updates to Brazil’s list of specific commitments under the Protocol provide the following: “A regulamentação sobre o comércio de produtos comercializados eletronicamente ("electronically deliverable products") e os serviços prestados via comércio eletrônico está sob análise do Congresso Nacional. As inscrições nas colunas de acesso a mercados e tratamento nacional em Modos 1 e 2 deverão ser lidas em conjunto com eventuais restrições para a prestação ou comercialização de tais serviços por meio eletrônico. Portanto, a inscrição "Nenhuma" nas colunas de acesso e mercados e tratamento nacional, nos modos 1) e 2) não implica a inexistência de restrições ao comércio de serviços pelo meio eletrônico.” See Decreto Legislativo 984/2009, available at : https://www2.camara.leg.br/legin/fed/decleg/2009/decretolegislativo-984-22-dezembro-2009-599041-publicacaooriginal-121435-pl.html.
← 40. The Brazil-Chile FTA was ratified in October 2021.
← 41. See http://www.sice.oas.org/TPD/BRA_CHL/FTA_CHL_BRA_s.pdf.
← 42. For further details, see http://www.sice.oas.org/tpd_e.asp.
← 43. See https://conferenciaelac.cepal.org/6/en/news/countries-latin-america-and-caribbean-commit-spearheading-digital-ecosystem-e-commerce-access.html.
← 44. See https://conferenciaelac.cepal.org/6/sites/elac2020/files/cmsi.6_digital_agenda-en-23_april.pdf.
← 45. For more details on eLAC 2020, see https://conferenciaelac.cepal.org/7/en.
← 46. For more detail on eLAC 2020, see https://conferenciaelac.cepal.org/7/en/documents/digital-agenda-elac2022.