Uproar in the Continent Makes Brazil Go Back on Import Licenses

Brazilian imports Brazil officially denied this Wednesday, January 28, that it had imposed import licenses or was reverting to non tariff barriers on hundreds of products, a decision which had caused uproar mainly among Mercosur partners.

The purpose of the latest license system is to electronically register all imports, helping to update statistics and identify divergences with commercial operations, said Finance minister Guido Mantega in Brasí­lia following discussions with Development, Industry and Foreign Trade minister Miguel Jorge, from where the original decision had emerged.

"We're temporary suspending the system to put an end to all the noise and misunderstandings which have surfaced in the last few days," said Mantega.

According to the original Monday announcement, a long list of products equivalent to 60% of Brazil's imports would have needed the previous approval from the Industry and Foreign Trade ministry, which had 60 days to decide on the license issue.

Several business organizations and trade chambers in Mercosur countries interpreted the requirement as a protectionist resource, recalling Brazil's position in the seventies and eighties. However Mantega insisted it was a "technical" issue and would have no impact or interference in imports.

"We need a more precise monitoring of imported products given the performance of the Brazilian trade balance during January," which showed a deficit of US$ 650 million as exports plunged 24.9%, far greater than the 8.8% drop in imports, admitted Mantega.

According to a release from the Ministry of Development, Industry and Foreign Trade released to Brazilian embassies, the automatic license system was established January 26 on 24 chapters of the Mercosur Common Nomenclature with the purpose of monitoring Brazilian import statistics and identify divergences in trade operations.

"The procedure is electronic" and the merchandise is liberated "automatically and unconditionally" in a maximum of ten days," added the release denying emphatically it was a "non tariff barrier".

According to the release Brazilian consulates along border towns were contacted and all reported "normal trade activities."

Apparently President Lula da Silva was on the phone with several of his Mercosur counterparts.

Mercopress

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