The Brazilian council of ministers of the Foreign Trade Board (Camex) increased the import tax levied on around 100 products purchased outside the Mercosur to up to 25% on Tuesday (September 4), according to Finance minister Guido Mantega.
The minister says the objective of the measure is to “stimulate domestic production”, as Brazilian industry suffers strong competition abroad.
Mantega added that the growth in the tax, following terms accepted by the World Trade Organization (WTO), covers ironworks, petrochemical and rubber products, tires and some medication.
He emphasized, however, that the prices of products will be constantly monitored to avoid price increases on the domestic market, “in case that happens, we will knock down the import tax immediately.”
Mantega classified the increase of the tax as one more measure to protect the domestic industry, already benefited by measures in the exchange area, like the reduction of financial and tax costs, as well as lower interest rates to facilitate investment.
To the minister, the measures for protection are necessary as “markets are lacking worldwide and the few markets that are growing are seeking Brazil, and our industry is losing ground as a result.”
The minister of Development, Industry and Foreign Trade, Fernando Pimentel, said that the list of products with greater Import Tax will immediately be informed to the countries that are members of the Mercosur, who have 15 days to approve it or to present objections, if that is the case.
Once the formal requirement has been executed, Pimentel believes that the regulation should be put in place in the last week of September. The measure should be valid for 12 months, and may be extended for another 12.
During the Camex meeting, it was also decided that Brazil would return to negotiating a free trade agreements with the European Union, Canada and another 39 countries.
With regard to the Arab nations, Pimentel stated that an agreement with Egypt should be sent for approval by the Brazilian congress in September. According to the minister, the agreement should be interesting for both countries.