MercoPress. South Atlantic News Agency

Protectionist Brazil: restrictions on 60% of imports

Brazil announced it has imposed restrictions on 60% of imports “to soften” the impact of the global crisis in its trade balance which in the first four weeks of January has registered a totally unexpected deficit of 645 million US dollars.

The Brazilian Foreign Trade Department has begun to demand non-tariff requirements and import licences for 17 trade sectors which represent 60% of imports. "The decision means the return to the control of imports which Brazil applied strictly in the eighties and seventies", pointed out the prestigious Folha de Sao Paulo in its Tuesday front page edition. The measure is geared to reverse the dramatic drop in Brazilian exports and the difficult situation faced by the domestic industry, where in the state of Sao Paulo only, last December 120.000 jobs were lost. Actually 650.000 Brazilians joined the ranks of the unemployed during December allegedly because of the impact of the global crisis and the fall in exports, points out the Sao Paulo financial publication. Some of the sectors which now require an import licence are the wheat and flour industry, plastics, iron and steel, copper, aluminium, capital goods, electric equipments and machinery, textiles, auto parts, automobiles, surgical and optical instruments. Until this latest round decided by the Foreign Trade Development Office, non tariff barriers in Brazil only applied to 10% of imports. "Undoubtedly it is a protectionist measure. It's a crisis year and the government is looking how to defend itself in trade terms", said Gustavo Dedivits, president of the importers' association. Roberto Gianetti head of the Trade Department from the powerful FIESP, Sao Paulo's Federation of Industries, Roberto Gianneti da Fonseca said the decision "seems a bit precipitated and taken out of fear" In the first four weeks of January Brazilian imports were 645 million US dollars higher than exports, a monthly report which has not happened since 2000, according to the Ministry of Development and Foreign Trade.