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March 2, 1988

US POSTPONES IMPOSITION OF TRADE SANCTIONS AGAINST BRAZIL OVER MS-DOS

By CBR Staff Writer

US trade representative Clayton Yeutter said Tuesday that the Reagan administration had decided to postpone trade sanctions against Brazil pending a review of new Brazilian government regulations involving imports of computer software, AP Dow Jones reports from Washington. Yeutter said it would be inappropriate to order US retaliatory tariffs on imports from Brazil at this stage because of progress in negotiations to persuade the Brazilians to ease their import restrictions. The decision is now expected to be taken on about April 19, when new Brazilian regulations on imports of computer software are due to take effect. President Reagan had asked Yeutter to prepare a list of imports from Brazil that might be subject to 100% penalty duties if it continued to restrict imports of US computers, software and related products. The Brazilians appear to have backed off a little from its earlier ban on imports of Microsoft Corp’s MS-DOS – but the relaxation applies only to MS-DOS 3.2 and above: a Brazilian copy of earlier releases of the operating system is available, and this is the ground on which imports are barred. US industry representatives seem to have been mollified by this decision, in the belief that Microsoft would be assured of a possibly larger market for further releases than was likely from the earlier versions – but a Brazilian company has reportedly said it would soon have a copy of the newer releases as well. Another development that has been taken as a positive sign in Washington is that Brasilia also appears to be retreating from a plan to allow a Brazilian company to manufacture an copy of a widely used line of personal computers designed by Apple Computer Inc. The Computer and Business Equipment Manufacturers Association is also pressing the US to ask Brazil to drop its plan to impose stiff import fees to finance the development of its domestic software industry. The group welcomed the decision to hold back on sanctions, saying that it was a positive move – Any retaliation could be an admission that you’ve lost the negotiating battle.

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