28 February 2013 18:31 [Source: ICIS news]
MEDELLIN, Colombia (ICIS)--Proposed higher import tariffs in Brazil will likely heighten already tense trade relations with many developed countries including the US and European nations, chemical sellers and traders said on Thursday.
Brazil’s Camara de Comercio Exterior (CAMEX), the chamber of international commerce, earlier this month announced plans to possibly raise import tariffs on many foreign products in order to help local industry.
"If you have assets in Brazil, then this helps you, but buyers will ultimately have to pay higher prices," a seller to the region said.
The legislation is still in the public consultation process, which sets a deadline for industry to respond within 30 days.
The sectors that should benefit include petrochemical, pharmaceuticals and capital goods.
Traders in the region were concerned that some chemicals such as styrene, of which Brazil has been a net importer for years, were included in the list.
Petrochemicals included in the list, which could see tariffs rise up to 20%, include phthalic anhydride (PA), adipic acid, n-butyl acetate, ethylene glycol (EG), polyethylene terephthalate (PET), ethylene polymers, polypropylene (PP), styrene and bisphenol A (BPA).
Brazil’s government has been criticized for protectionist policies in recent years.
In September 2012, Brazilian President Dilma Rousseff rebuffed accusations of Brazilian protectionist economic policy at the opening session of the UN General Assembly.
Meanwhile, Brazilian chemical imports continue to climb.
Brazilian imports of chemicals in January reached $3.6bn (€2.7bn), up by 14.2% year on year and down by 1.2% month on month, the nation's chemical industry association Abiquim said earlier this month.
According to the association, Brazil's trade deficit reached $2.4bn in January, adding that its current trade deficit within the last 12 months has reached $28.5bn.
"The results of the trade balance of chemicals in January should be sought with caution," Abiquim's foreign commerce director, Denise Naranjo, said when the report was released.
"The recent recovery of exports, the relative stability of imports, the confirmation of the expectancies regarding the performance of Brazilian economy throughout this year as well as the turbulent international scenario should be the main conditioning factors for the behaviour of Brazil's foreign trade in 2013," she said.
($1 = €0.76)
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