S\u00e3o Paulo \u2013 The greater import tax on 100 products, announced last week by the government of Brazil as a way to protect domestic industry, interferes in trade between Brazil and the Arab world. Twenty four products that are included in the list of exceptions were exported to Brazil by the Arabs between January and July this year, totalling revenues of US$ 137.8 million. The value represents 1.8% of all Brazil spent with purchases from the region in the period, US$ 7.3 billion.<\/p>\n
\u201cIt should have an impact,\u201d stated the CEO at the Arab Brazilian Chamber of Commerce<\/b>, Michel Alaby. The main items sold by the Arab world that should start receiving an exceptional surcharge are glass plates, whose exports to Brazil totalled US$ 50 million in the first seven months of the year, followed by polyethylene, with US$ 48.7 million aluminium cables, US$ 20.2 million, epoxy resin, with US$ 3.4 million, tyres for lorries and buses, US$ 1.9 million, and polymer plates, US$ 1.4 million.<\/p>\n
The list of exceptions also includes other products that Brazil imported from the Arabs, but at smaller volumes, like ready potatoes, oxydiethanol, ethylene glycol, polymers, facing, polymer plates, steel laminates and electric engines, among others. Most will start paying a rate of 25% for entrance into Brazil. Glass plates should stop paying 10% tax, rising to 20%. The tax levied on polyethylene should rise from 14% to 20% and that on aluminium cables, which was 12%, should be increased to 25%.<\/p>\n
Alaby recalled that the impact should not be felt just in the higher import tax to be paid, but also on other taxes to be levied, resulting in higher prices, among them the Tax on Industrialized Products (IPI), value added state tax (ICMS) and PIS\/Cofins. \u201cThe difficulty in exporting to Brazil should also rise,\u201d said the CEO, referring to the Arab countries. He recalled, however, that the impact should be felt in foreign trade of these products, but that is should be lower on imports from the Arabs as a whole, in which crude oil is the heaviest product.<\/p>\n
Petrochemicals<\/b><\/p>\n
The energy specialist and director of the Brazilian Infrastructure Centre (CBIE), Adriano Pires, stated that in the petrochemical sector, the growth in import tax should, in the short term, protect the national industry from imported products. \u201cThe national petrochemical industry is expensive as it uses naphtha (as raw material),\u201d he said, recalling that the product depends on oil prices, which have remained high.<\/p>\n
International petrochemical companies tend to use gas as an input, but Brazil, according to Pires, does not have much of the product available. \u201cIf we had cheaper gas, we could have a more competitive petrochemical industry with more modern technology,\u201d said Pires. Brazil imports naphtha for the petrochemical industry from the Arab market. From January to July this year, purchases of the product totalled US$ 1.5 billion and were the second item in the import basket from the region, right behind crude oil, whose purchases were US$ 3.4 billion.<\/p>\n
Mercosur<\/b><\/p>\n
The decision of increasing tax was taken by the council of ministers of the Foreign Trade Board (Camex) last Wednesday (5). The measure still needs to be approved by the other countries that are members of the Mercosur and should be enacted by the end of the month. It does not include members of the South American bloc.<\/p>\n
*Translated by Mark Ament<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"
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