Following quickly on the heels of decree 5.556 (which went into effect last Wednesday, October 5) regulating the safeguard process in the case of Chinese goods, the Brazilian textile and clothing association (Associação Brasileira da Indústria Têxtil e de Confecção) (Abit) has announced that it will make a request for safeguards against Chinese imports. Abit says it has a list of 75 products harmed by products coming from China.
In a note, Abit denies it is being protectionist. "China should not feel it is being attacked. Our safeguard process is within World Trade Organization norms and is a transitory measure set to expire in 2008.
"We hope that between now and then we will be able to negotiate satisfactory solutions with the Chinese. At the same time, Abit and the rest of Brazil’s industrial sector is moving ahead with modernization and macroeconomic changes."
Brazilian President Luiz Inácio Lula da Silva signed into law regulations for the use of safeguards against Chinese imports. Brazil now has the legal means to protect itself against what it calls an onslaught of Chinese goods.
However, for the safeguards to be activated there is a process with various stages. Initially a formal complaint must be made at the Secretariat of Foreign Trade (housed in the Ministry of Development, Industry and Foreign Trade). At that point the Chinese will be notified and talks will begin to find a solution to the problem without the use of the safeguards.
If safeguards are eventually used, they can remain in effect for a maximum of 12 months. The regulations signed by Lula also have a sunset clause: none of the safeguards in the decree can be used after December 31, 2008.