Brazil and Argentina Want Higher Tariffs to Stop Chinese Invasion

Chinese textile industry Argentina, which with Brazil makes up the stronger half of the Mercosur, is again expected to propose an increase in the common external tariff (AEC, Arancel Externo Común) for textiles, leather goods, wood and furniture plus other manufactured produce with the purpose of protecting domestic production.

The request will be formalized this week during the meeting of a Mercosur technical group which prepares the documents to be signed at the twice annual presidential summit when the Mercosur chair rotates among country members.

The proposal needs a consensus to be approved but in previous occasions the Uruguayan delegation has voted against higher tariffs, particularly when global trade is threatened by the global crunch.

According to sources in Montevideo, "Uruguay's position has not been defined yet," and there's "no interest in raising the AEC," but that does not mean "that at the end we could support the Argentine initiative."

A conclusive decision on the issue must be arrived by mid December when Foreign Affairs and Economy ministers meet in anticipation of the presidential summit.

An Argentine financial publication close to the Ministry of Foreign Affairs said that the proposal is to hike the AEC five percentage points on average, but it would vary according to the different sectors.

"Uruguay is the least willing to support the alleged Argentine protectionism" and at the last October meeting of the technical groups to address the issue, the Argentine delegation anticipated it would propose the AEC increase.

At the time Uruguay argued that what was needed "was a larger market, since Mercosur is a relatively small market on world scale and Argentina's proposals were against that."

Uruguay added that Argentina was planning an "imports substitution" industrial policy, applied with controversial mixed results in the fifties and "which was against Uruguay's interests."

Although the clash was between Argentina and Uruguay, analysts said that Brazil was also behind Uruguay's position.

Brazil's Foreign Affairs minister Celso Amorim who has played a key role in the stalled WTO Doha Round talks to liberalize trade has repeatedly stated that protectionist measures could have "counter effects."

But the Brazilian press has revealed that President Lula da Silva administration is interested in increasing the AEC for wines, dairy produce, textiles and electronic equipment. The latter are massively manufactured in Manaus (capital of the northern state of Amazonas) free trade zone.

The overall objective of Mercosur senior partners, Brazil and Argentina, is to limit the flush of Asian imports.

Another contentious issue will be the Mercosur Customs code, since Uruguay is against Argentina's position to include a chapter formally authorizing country members to impose taxes on exports, which was at the heart of the recent five months long conflict between the Kirchner couple administration and the farmers.

Mercopress

Tags:

You May Also Like

At 50, Brazil’s Beirut Sandwich Is Still Served As It Was Created

In the city of São Paulo in the 1950s, in a diner called Dunga, ...

Brazil Recognizes There’s Still a Long Way to Integrate Indians in Society

The executive secretary of Brazil’s Ministry of Justice, Luiz Paulo Barreto, participated, Tuesday, March ...

The U.S. and Exchange Rates Do Not Scare Brazilian Exporters

Brazilian exports are going to rise despite seasonal factors like exchange rates and the ...

Brazil’s Central Bank New 19.25% Interest Rates Draw Unions’ Ire

Brazil’s Central Bank’s Monetary Policy Committee (Copom) decided, yesterday (16), to raise the annualized ...

Brazil’s Embraer Builds US$ 50-Million Plant in the US to Make Executive Jets

Embraer, Brazil's aircraft maker, announced that the company's profits more than doubled in the ...

Brazil Has a Promising Future in Biofuel

Biofuel production offers a "window of opportunity" for rural development, especially in Brazil, Ignacy ...

Brazil Sets Free Condom Machines in Schools Plus 55 Million Condoms for Carnaval

The Brazilian ministry of Health has begun distributing condoms directly in schools alarmed with ...

Brazilian Days of Honduras’s Fallen President Zelaya Are Almost Over

Porfirio Lobo, Honduras’s president elect, said that as soon as he takes office, January ...

A truck in Brazilian road

A Bullish Brazil Betting on 4.2% Growth for 2007

The National Confederation of Industries (CNI), an organization that represents Brazilian industry, forecasts growth ...

Brazil’s Embraer Delivers the First of 90 Jets Ordered by Air Canada

Brazilian jet maker Embraer celebrates delivery today of the third of 15 Embraer 175 jets ...