Following on Argentina’s track the Brazilian government created a special unit to monitor and control imports in the framework of the country’s new trade policy implemented by the administration of President Dilma Rousseff.
Brazilian imports soared 24% during 2011 according to official data and confiscation of smuggled goods as illegal imports also jumped 16%.
“The increase is clearly in the framework of illegal trade”, said Brazil’s head of the Customs Office Ernani Argolo.
The new unit depends from the Tax Revenue Department and will be identified as the National centre for Risk Management, with seat in Rio do Janeiro. The purpose of the office is to control purchases with false origin documents of produce with dumping prices and imported merchandise suspicions of fraudulent declared prices.
One of the sectors which will be most exposed to the filter is textiles, particularly because of the distorting imports from China.
Meanwhile in Buenos Aires Brazilian manufacturers were asked to have “some patience” regarding the new scheme imposed by Argentina on all imports and which has triggered complaints from Mercosur associates.
“We were promised by Argentine officials that there won’t be detrimental actions but balanced, gradual solutions. They asked for some patience and no precipitation”, said Paulo Skaf head of the powerful Sao Paulo Industries Federation who met with Economy minister Hector Lorenzini, Industry minister Debora Giorgi and Domestic Trade minister Guillermo Moreno.
Argentine businesses as of February first must present an advanced sworn statement on planned imports and the bureaucracy has three to ten days to approve or disapprove the request.
The scheme has been described as ‘protectionist’ by Mercosur associates private sectors. Argentina argues it must ensure its domestic market and Argentine jobs from the global financial crisis and the re-direction of global exports from developed to developing countries.
Argentina barred from voluntary money markets since the 2001 default needs a healthy trade surplus but was also exposed to a massive capital outflow during 2011 which forced the Cristina Fernandez administration to impose strict foreign exchange controls.
Brazil is Argentina’s main trade partner. Last year Brazil exported 22 billion dollars and Argentina 17.7 billion with a trade deficit of 5.8 billion for Argentina, up 20% from 2010. Argentina wants a more balanced trade relation.