Brazil Slaps Quotas on Chinese Textiles

The secretary of Foreign Trade at Brazil’s Ministry of Development, Ivan Ramalho, and the Chinese vice minister of Commerce, Gao Hucheng, will sign today in Beijing a memorandum of understanding.

This pre-agreement establishes quotas for some textile goods from China entering Brazil. Further negotiations will precede the signing of a final agreement by ministers Luiz Fernando Furlan and Bo Xilai in the future.

The Brazilian textile and clothing industry chalked up a disappointing performance in 2005 but intends to grow 3.5 or 4% this year, if the Central Bank effectively lowers interest rates and other adjustments occur in the economy.

This assessment was made by the supervising director of the Brazilian Textile and Clothing Industry Association (ABIT), Fernando Pimentel.

Pimentel participated last month in the Fashion Business event at the Rio de Janeiro Museum of Modern Art.

"We expected the sector to grow around 2 or 3% in 2005, compared to an 8% increase in 2004, but the preliminary figures indicate a drop in production, as measured by the Brazilian Institute of Geography and Statistics (IBGE)," he commented.

The drop in last year’s production is expected to amount to 1.5% in the textile sector and 2.5% in the clothing sector.

According to Pimentel, there were two major factors behind the drop in production: interest rates and the exchange rate. With regard to the sector’s exports, he says that, "if the exchange rate undergoes some adjustments, and Brazil moves in the direction of improving its trade agreements, exports may be able to expand as much as 5% in 2006."

The entrepreneur comments that Chinese competition in the sector represents a problem for everybody. He says that Brazil is highly competitive but that China has spare production capacity in this area.

"What we demand is a level playing field," he says. "China has a devalued currency and a tax burden that is half what we have."

Pimentel says that the Brazilian textile and clothing sector has invested about US$ 1 billion a year in Brazil and, since the real was adopted 11 years ago, has evinced an inflation rate of 15%, according to the FIPE’s Consumer Clothing Price Index, compared with an overall inflation rate superior to 165%, as measured by the National Consumer Price Index.

The adoption of safeguards against China by the federal government may be the solution to this supposedly unfair competition. Pimentel reports that the sector requested the application of safeguards to 72 Chinese products.

"The government continues to examine [the situation], and we hope that we shall soon receive the first favorable decisions in response to our grievances," he said.

ABr

Tags:

Ads

You May Also Like

Congressman Warns about Brazil’s Isolation If Honduras Election Not Recognized

Brazilian congressman Raul Jungmann, the only representative from Brazil to be part of an ...

Brazil and Colombia in Joint Effort to Fight FARC and Drugs

Brazil and Colombia will be signing this weekend a defense agreement by which the ...

Brazilian Businessman, 57, Crosses Strait of Gibraltar Swimming

Swimming across the Strait of Gibraltar non-stop for 22 kilometers (13.7 miles) until touching ...

Profit Taking Leads Brazil Market Downhill

Latin American issues mostly declined under the weight of a sharp Brazilian fall. Profit-taking ...

In Brazil 70% of Women Abuse Is Shelved. At Women’s Request.

A survey in Brazil coordinated by professor Heleieth Saffiotti has found that 70% of cases ...

Brazil Outdoes Argentina in Soy and Cattle

The 70 million tons of the 2008/09 Argentine harvest would represent 2.9% of the ...

Brazil Gets a Permanent US$ 6.5 Sovereign Wealth Fund

The Brazilian House of Representatives approved on Tuesday night legislation making an existing Sovereign ...

China to Add 5 More Brazilian Embraer Jets to a Fleet of 18

The new board of directors of China Eastern Airlines Wuhan Ltd has approved the ...

A Pan-Amazon Effort in Brazil to Save the Amazon

The city of Manaus, capital of the state of Amazonas, in Brazil, will host ...

He invented the Brazilian novela

CDs or Books by Keyword, Title or Author By Francesco Neves "God is a ...