The Brazilian government will begin to control the entry of Chinese textile products starting on April 3. The voluntary restriction accord, settled between Brazil and China on March 3, will prevail between 2006 and 2008.
The accord establishes limits for 8 types of Chinese imports: velvets, embroidered goods, knitted shirts, polyester textured threads, synthetic fibers, silk fabrics, sweaters, and pullovers. The 8 groups cover 76 different items that correspond to 76% of the imports in this area.
Other Brazilian industrial segments are now ready to ask for government help against what they see as unfair Chinese competition. Even though the government prefers to negotiate, it has not dismissed the possibility of adopting trade defense measures against the Asian trade giant.
"We are trying to do what we can to protect our country’s employment. We will do this, negotiating with the Chinese, and, if it comes to that, using safeguards, when these agreements aren’t possible," says Armando Maziat, secretary of Foreign Trade in the Ministry of Development, Industry, and Foreign Trade.
"We shall always try to work out an agreement, but the government will not give up using a legitimate instrument to protect Brazil’s industry."
According to data from the ministry, Chinese textile exports to Brazil have increased from US$ 153 million in 2003 to US$ 251 million in 2004 and US$ 360 million in 2005.
Similar, more restricted agreements with China were signed before with the United States and the European Union. In the case of the United States, the agreement covers 45.8% of the items that are sold, while the agreement with the European Union applies to 30% of the imports from China.
"These agreements are much better than the safeguards. The countries aren’t fighting; they’re only defining levels of cooperation," says Paulo Bastos, vice-president of the Brazil-China Chamber of Economic Development."