Brazil Blasts U.S.-Imposed Trade Sanctions as ‘Illegal’ and ‘Unjustified’

In a new flare-up of U.S.-Brazilian trade friction, Brazil is reacting defiantly to import sanctions imposed by Washington as retaliation for violations of American pharmaceutical patents.

President Reagan issued a written order Thursday for new tariffs of 100% on paper products, electronic consumer goods and some pharmaceuticals imported from Brazil.

Paulo Tarso Flecha de Lima, Brazilian foreign ministry’s No. 2 official, told a news conference that the sanctions are “illegal, truculent, unjustified and do not have the support of international law.” Flecha de Lima objected to the use of the word “piracy” by U.S. Trade Representative Clayton K. Yeutter in describing Brazilian policy on pharmaceutical patents.

“We categorically reject that affirmation because no case of piracy has been identified so far,” the Brazilian diplomat said.

He said Brazil will take the matter to the General Agreement on Tariffs and Trade but “does not intend to negotiate” its principle, established in a 1945 law, of not recognizing pharmaceutical patents.

Congressional leader Ulysses Guimaraes, filling in as Brazil’s chief executive during a trip to the Soviet Union by President Jose Sarney, said he saw in the sanctions “a surprising and gratuitous aggression against Brazil, as well as an attitude that reveals disdain for the proper forms of international coexistence.”

Guimaraes added: “I hope that the Reagan Administration returns to the best American traditions of dialogue and rationality, and in a sensible way, overcomes the problem created artificially with Brazil, backing off from its decision and negotiating the disagreement in the proper forums.”

Goods affected by the new tariffs include synthetic alkaloids, synthetic antibiotics such as tetracycline, and different kinds of paper. Hessel Cherkassky, president of the National Assn. of Paper & Cellulose Manufacturers, said that industry expects its exports to the United States to be worth a total of more than $100 million this year, but he said the sanctions are of little concern because the products can be switched readily to other markets.

The tariffs also will apply to such electronic appliances as microwave ovens, video cameras, television sets and tubes, record players, tape recorders, microphones, speakers and amplifiers. Currently, however, Brazil exports few of those items to the United States.

The sanctions resulted from hearings held by Yeutter’s office at the request of U.S. pharmaceutical manufacturers claiming protection under U.S. law. The United States warned Brazil in July that sanctions were coming.

Reagan’s order said Brazilian policy allows “unauthorized copying of pharmaceutical products and processes that were invented by U.S. firms.”

The sanctions are to apply to Brazilian goods worth $39 million, the value that was determined for damages to American pharmaceutical companies. In July, Reagan had said the sanctions could affect up to $200 million in Brazilian exports.

Earlier this year, the Reagan Administration announced its intention to impose sanctions on $105 million in Brazilian exports as retaliation for unauthorized copying of computer software patented in the United States.

That process was suspended indefinitely in June after Brazil passed regulations expected to give U.S. software companies better access to the Brazilian market.