Brazil pushing for an end to G20 anti-protectionism pledge

3rd November 2011, Comments 0 comments

Brazil is pushing fellow G20 states to drop a pledge made during the group's summit last year to shun protectionism until 2013, a G20 summit source said Thursday.

Brazilian officials are frustrated by what they see as China's protection of its own markets by keeping its currency artificially low, and are contemplating steps of their own to shield domestic suppliers from competition.

The G20 powers pledged during their 2010 Toronto meeting to "renew for a further three years ... our commitment to refrain from raising barriers or imposing new barriers to investment or trade in goods and services."

They also agreed to prevent measures "imposing new export restrictions or implementing World Trade Organization-inconsistent measures to stimulate exports, and commit to rectify such measures as they arise."

Brazil now wants to drop the pledge, as it moves to protect its local markets which are suffering from the impact of a strengthening real and intense competition from Asia, a source said.

Discussions for a final G20 declaration are ongoing, with the final text to be released at the end of two-day meeting on Friday.

Faced with a stampede of new brands mainly from Asia, the Brazilian government decided in September to slap a whopping 30 percent tariff on all vehicles that are not at least 65-percent made in Mercosur, the South American trade bloc.

That tax has been suspended until mid-December, after a Chinese automaker won a challenge in Brazil's supreme court against the move.

The WTO warned in late October that protectionism appeared to be gaining ground in parts of the world amid current economic difficulties.

"There is a growing perception that trade protectionism is gaining ground in some parts of the world as a political reaction to current local economic difficulties," the WTO said.

There are "signs of a revival in the use of industrial policies to promote national champions and of import substitution measures to back up that policy," it noted.

In addition, more export restrictions -- targetted mainly at minerals and food products -- were imposed during May to mid-October than in the past, the WTO added.

© 2011 AFP

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