Brazilian Textile and Clothing Associations files safeguard action against imports

Brazilian Textile and Clothing Associations files safeguard action against imports

On August 23, 2012 the Brazilian Textile and Apparel Industry Association (ABIT) filed a safeguard petition covering 50 clothing products accounting for 82 % of Brazil’s total apparel imports

The petition is focusing on apparel imports from all suppliers and regions and not just Chinese ones. The filing includes over 2000 pages of information filed to Brazil’s Ministry of Development, Industry and Commerce (MDIC). ABIT favours the establishment of quotas on apparel imports, but would accept the imposition of safeguard tariffs in addition to the 35 % most-favoured-nation duty rates currently in place.

In principal the ABIT’s petition is confidential but ABIT focuses on the 240 percent increase in apparel imports during 2007 to 2011 accompanied by a significant decrease in domestic production. Most of the import growth derives from Asia and predominantly from China. ABIT claims that the imports and currency fluctuations have resulted in a strong Brazilian currency versus an undervalued CNY. In addition the economic downturn has led to sluggish apparel sales to the USA and EU generating excess Asian production and Asian countries seek to export these to other markets like Brazil.

As it is the case in other countries, of course the Brazilian Association of Textile Retailers is opposed to the ABIT filing claiming that the Brazilian industry has not kept pace of innovation and cost reductions promoted by the global textile industry. It mentioned also the fact that only 35 companies have presented data to the MDIC in a universe of some 30000 manufacturers in Brazil.

The timeframe of the future decision by Brazilian authorities is not known, as well as if they decide to reject or accept the petition or to initiate an official investigation. If MDIC is to take safeguard action the ministry would have to determine that the named apparel items in the petition were imported into Brazil in such increased quantities as to cause or threaten serious injury to the Brazilian industry that produces the same product or are in direct competition with the imported article. Presently, the country has only one safeguard measure and non in the textile area in place.

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