The president of the São Paulo Manufacturer Federation (Federação das Indústrias do Estado de São Paulo) (Fiesp), Paulo Skaf, says his organization will immediately set up a trade defense team to protect the sector as a result of the decision by the Luiz Inácio Lula da Silva administration to recognize China as a “market economy.”
Fiesp has officially stated its opposition to the decision claiming that it weakens the country’s trade defense mechanisms.
“We will monitor imports from China to identify any goods that spike. We will use all our resources to protect the Brazilian industrial sector,” declared Skaf.
By recognizing China as a market economy, Brazil will have trouble dealing with dumping by the Chinese no matter how talented government overseers may be, says Fiesp.
With the recognition, Brazil is now obligated to use Chinese domestic prices as the basis of comparison (instead of prices in other countries, which is the norm).
The problem with that is that China is really not a market economy, but a state-run, command-type economy, where prices are kept artifically low and do not reflect market realities, explained Skaf.
According to the Fiesp president, there will now almost certainly be a flood of Chinese imports washing up on Brazilian shores.
Translator: Allen Bennett