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:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil Markets Follow US Lead

Brazilian stocks rose today, as the U.S. market was bolstered by corporate merger and ...

Brazil’s New Finance Minister Wants GDP Over 4% in 2006

In his first remarks as Brazil’s new minister of finance, following a ceremony at ...

Brazilian House of Representatives

By Almost Doubling Their Salaries Brazilian Congress Demoralized Democracy

Eduardo Bueno is a well-known Brazilian historian with the rare quality of also being ...

Over Easy

The five of us burst into laughter, a hearty, communal laughter that not only ...

Beyond Soccer and Carnaval, 10 Reasons to Take Brazil Seriously

Though journalists, international affairs professionals, travel lovers, and international businessmen are already well aware ...

Navy’s Ship Becomes Showcase of Brazil’s War Industry

The Brazilian Navy’s School Ship will take products made by Brazilian defense industries to ...

Brazil vs. NYT: Lula’s Illogical Logic

The moral punishment of the gringo reporter by the press, politicos and public opinion ...

A Brazilian Model to Fight Poverty and Pollution at the Same Time

Cascata, a 587-hectare settlement run by the Brazilian land reform institute (Instituto Nacional de ...

Brazil: The Media Is Not Beyond Suspicion

With the inevitable outcome, it is safe to say that the Federal Council of ...

No Change in View for US’s Meddling in Latin-American Affairs

Few will find fault with the conclusion that U.S.-Latin American policy has long been ...