With an eye on imports, the ministry creates a “defense of the industry” system


Source: Valor Econômico, 13/11/2008

Amid the fear of a flood of imports due to the global financial crisis, the Ministry of Development, Industry and Foreign Trade is creating the “coordination of defense of the industry”, which will function as “interlocutor” of businessmen with the different government agencies always that the subject is competition with products coming from abroad.

According to the Foreign Trade Secretary, Welber Barral, the new coordination will be responsible for identifying what is the problem experienced by the sector - dumping, safeguarding, under-invoicing, fraud, wrong origin, piracy, smuggling - and talk to the body responsible for inspection the theme.

Government technicians will explain the new system tomorrow to businessmen at the Federation of Industries of the State of São Paulo (Fiesp). If the importer practices dumping, the businessmen will be referred by the new coordination to the Department of Commercial Defense (Decom). If the problem is incorrect classification, they will go to the Foreign Trade Department (Decex). Both belong to the ministry itself.

The defense coordination of the industry will also interact with other government agencies. If the product is under-invoiced, the case goes to the IRS. Pirated products must be examined by the National Institute of Intellectual Property (Inpi). Ministry technicians will be responsible for following up the case until the end. Barral explained that the new coordination was in the strategic planning of the ministry, but the project was anticipated due to the international crisis. "In times of crisis, under-invoicing increases, to pay less taxes and increase margins," explained the secretary.

Roberto Giannetti da Fonseca, director of Fiesp's foreign trade department, said that the Brazilian private sector fears the displacement of “surplus” products to Brazil that are not being absorbed by the United States and the European Union, whose economies have slowed due to the Financial crisis.

The government and the private sector reject the criticism that Brazil is becoming more protectionist in the face of the crisis and that the defense coordination of the industry would respond to these concerns of the business community. “We cannot encourage protectionism in the midst of the crisis. It's a shot in the foot, ”said Barral. "On the other hand, we cannot accept the increase in unfair competition."

The footwear sector is already benefiting from the joint work between the Ministry of Development and the Federal Revenue Service. According to the Brazilian Footwear Industry Association (Abicalçados), the government monitors the price of products that arrive from abroad. The entity produced for the inspectors of the Federal Revenue a kind of guide, which identifies the products with photos and places the reference prices according to the cost of the item. "This measure is not interfering with legal imports, but increasing the number of seizures," said Heitor Klein, executive director of Abicalçados.