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Brazilian Government to Increase Import Duties on Textiles

Thursday, January 12, 2012
Sandler, Travis & Rosenberg Trade Report

Treasury Minister Guido Mantega announced Dec. 27 that the Brazilian government intends to change its system of imposing tariffs on textile products. Imports of these goods are growing rapidly, particularly from China, and the government wants to prevent more substantial increases of allegedly underpriced textile goods that could harm domestic producers.

Brazil currently assesses import duties on textile products as a percentage of the customs value of the goods, but the government is now proposing to establish variable duty rates that would increase along with the quantity of goods imported. Legislation to implement this change has been drafted but details have yet to be determined and no final measures have yet been taken.

The proposed change to the textile duty system, like the recent tariff increase on automobiles, reaffirms that Brazil is not hesitating to impose measures that may be seen as protectionist if it believes they will aid domestic industries still struggling with the global economic situation. Brazil has signaled its intention to defend any challenges to such measures at the World Trade Organization by characterizing them as provisional safeguard measures allowed under WTO rules.

It should also be noted that in August 2011 the Brazilian government established measures designed to identify and restrict shipments of goods (particularly textile products classified under Harmonized Tariff System chapters 61 and 62) suspected of price or other trade compliance irregularities.

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