Brazil plans to unveil new rules for car subsidies -report

BRASILIA, Sept 5 (Reuters) – Brazil plans to unveil new rules for subsidies to automobile manufacturers by Oct. 3 after its original program was reproached by the World Trade Organization last month, Valor Econômico said on Tuesday.

The new subsidy program, known as Rota 2030, will give tax benefits according to energy efficiency standards and engine power performance, without local content rules that breached WTO norms and raised prospects of trade retaliation, the newspaper reported.

A WTO panel last month gave Brazil 90 days to withdraw several industrial stimulus programs, supporting complaints of unfair competition by Japan and the European Union.

Brazil said it would appeal the decision, but government sources had noted the need to scale back subsidies that have been partly responsible for a record budget deficit.

Media representatives for Brazil’s Trade Ministry, which has been responsible for preparing the new subsidy rules, were not immediately available to comment on the Valor report.

Brazil was one of the world’s five biggest auto markets until a recent slump and it remains a major base of operations for Fiat Chrysler Automobiles NV, Volkswagen AG , General Motors Co and Ford Motor Co. (Reporting by Silvio Cascione; Editing by Paul Simao)

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