São Paulo – Chemical products should have their import taxes raised. The product category was named by the Brazilian minister of Finance, Guigo Mantega, as potential items on the list of products whose import tariffs will be increased, according to a decision made by the presidents of Mercosur countries at a meeting in Montevideo, Uruguay. Each country will be allowed to request increases of up to 35% in import tariffs for 100 products, a measure taken to shield markets from being flooded with imported goods due amidst the international economic crisis. Thus far, the four nations in the bloc were required to charge a common external tariff on imports from third-party countries.
Mantega listed textiles, capital goods and chemicals as areas in which tariffs may be raised. Brazil imports several chemicals from the Arab countries, such as inputs for fertilizer manufacturing and petrochemicals, but the Arab Brazilian Chamber of Commerce CEO, Michel Alaby, believes it is too early to tell whether the decision will affect imports from Arab countries, because the list of products has not been defined yet. The foreign trade director with the Brazilian Chemical Industry Association (Abiquim), Denise Mazzaro Naranjo, believes taxes on fertilizers and petrochemicals will not be raised.
Brazilian imports of organic chemicals from the Arab world reached US$ 7.1 million from January to November this year, including items such as nimesulide, styrene and melamine, according to the Brazilian Ministry of Development, Industry and Foreign Trade. Imports of inorganic chemicals, including phosphoric acids, aluminium fluorides, stood at US$ 126.8 million during the period. Brazil imports other chemicals from the Arabs which are neither rated organic or inorganic by the government.
Naranjo believes that the minister mentioned chemicals as eligible for higher tariffs due to the industry’s high trade deficit. From January to November this year, the director explains, the sector ran a US$ 25 billion deficit. She explains, however, that the deficit is not only due to imports of products that have a negative impact on the market, but also for the purchase of items Brazil needs because it does not manufacture. Naranjo believes that in order to decide on which items’ tariffs to raise, the government will consult the industry, by submitting forms to be filled in. The decision will be made based on those inquiries.
Currently, there already exists a list of tariff exceptions in Mercosur, comprising 100 products for each country. The exceptions, however, may be both upward and downward. The decision made at the bloc’s last meeting concerns only temporarily increased tariffs. “Isolated tariff-related actions for reasons of commercial unbalance stemming from the international economic scenario” is how the countries justified the decision. Besides, Brazil has a commitment to the World Trade Organization (WTO) not to exceed maximum tariffs for each product.
*Translated by Gabriel Pomerancblum
