How Brazil has been targeted by international trade barriers

. Aug 07, 2018
How Brazil has been targeted by international trade barriers

Pão de queijo, the traditional, gluten-free Brazilian chewy cheese roll, has been making waves in New York City. A number of restaurants serving this signature food from the state of Minas Gerais have popped up over the past few years. In the European Union, however, they are banned. Labeled as a dairy product, pão de queijo can’t be exported to the EU – even though, by the group’s own rules, the fact that the product contains only 20 percent of milk derivatives should prevent pão de queijo from being tagged as dairy.

That is just one of the 20 trade barriers identified by Brazil’s National Confederation of Industry (CNI) – 17 of which have been imposed by members of the G-20, the group of the world’s 19 biggest economies plus the European Union.

According to data from Fundação Getulio Vargas, the country’s leading think tank, Brazil loses around 14 percent of its exports due to trade barriers and sanitary controls – amounting to USD 30.5 billion in 2017 alone. Some of the country’s main exports, such as sugar, meat, orange juice, and electronics, are the main targets.

While the European Union has imposed restrictions on Brazilian meat after a series of sanitary scandals, some of the restrictions smack of pure protectionism, such as the pão de queijo example.

</span></p> <p><span style="font-weight: 400;">One such case surrounds the export of Brazilian papayas. Tons of the fruit have been left to rot in American ports as authorities say, without technical basis, that Brazilian fruit shipments include dead insects. In Japan, orange juice from Brazil must pay higher tariffs than its competitors &#8211; 25.5 percent against 21.3 percent over products coming from elsewhere. In Mexico, Brazilian electronics are regulated by norms not based on international reference rules. </span></p> <h2>A coalition against trade barriers</h2> <p><span style="font-weight: 400;">By raising awareness about the issue, the CNI hopes to elaborate &#8211; alongside the federal government &#8211; a strategy to lift these barriers, which look likely to increase in number owing to a worldwide trend of protectionism.</span></p> <p><span style="font-weight: 400;">&#8220;The agribusiness sector is the worst-affected, as we are very competitive in this field. And that has led many countries to create trade barriers to prevent us from taking a bigger market share,&#8221; says Constanza Negri, trade policy manager at the CNI. &#8220;The more active our diplomacy gets, the quicker it will be to reverse the situation, through bilateral channels or even the World Trade Organization,&#8221; she continues.</span></p> <p><span style="font-weight: 400;">But the CNI is also aiming at removing some of the hurdles created by Brazil&#8217;s own bureaucracy. Delays resulting from lengthy customs processes can elevate export costs by 13 percent &#8211; and import costs by 14 percent.</span></p> <p><span style="font-weight: 400;">The CNI backs the creation of a unified trade system, which could lift Brazil&#8217;s trade volume from its current level of USD 180 billion up to USD 250 billion. The group representing Brazilian industry also wants to strengthen the &#8220;Authorized Economic Operator&#8221; (AEO) program &#8211; a certification that speeds up trading processes for certain companies. Imports from companies under the AEO regime can be cleared, on average, in less than four hours &#8211; while it takes up to 36 hours for all the others.</span></p> <h2>Main trade barriers against Brazilian products</h2> <hr> <p><img class="alignnone size-large wp-image-6915" src="" alt="brazil export import trade barriers trade war" width="1024" height="608" srcset=" 1024w, 300w, 768w, 610w, 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></p> <hr> <ul> <li><b>U.S.: </b><span style="font-weight: 400;">Brazilian dairy products are subjected to quotas. Also, the U.S. claims that Brazilian papaya shipments contain dead insects.</span></li> <li><b>Mexico:</b><span style="font-weight: 400;"> Restrictions on electric parts and electronics.</span></li> <li><b>Ecuador: </b><span style="font-weight: 400;">Demands specific certificates for textile products.</span></li> <li><b>Bolivia: </b><span style="font-weight: 400;">Imposes specific bureaucratic hurdles for Brazilian footwear and clothing.</span></li> <li><b>Argentina:</b><span style="font-weight: 400;"> Excessive demands on paper products and textiles.</span></li> <li><b>European Union: </b><span style="font-weight: 400;">&nbsp;Doesn&#8217;t allow Brazilian <em>pão de queijo</em> (considered a dairy product, in conflict with the EU&#8217;s own standards). Brazilian pork is also banned.</span></li> <li><b>Germany: </b><span style="font-weight: 400;">Brazilian paint is subjected to higher tariffs.</span></li> <li><b>Nigeria: </b><span style="font-weight: 400;">Ban on Brazilian beef.</span></li> <li><b>South Africa: </b><span style="font-weight: 400;">Higher tariffs for Brazilian bread products, cakes, biscuits, and pasta.</span></li> <li><b>Russia: </b><span style="font-weight: 400;">Specific bureaucratic demands for Brazilian medical products.</span></li> <li><b>Japan: </b><span style="font-weight: 400;">Higher tariffs on orange juice, restrictions on beef. Japan also restricts imports of pasta with specific preservatives, and the local subsidies to the sugarcane industry reduce the competitiveness of Brazil&#8217;s sugarcane bagasse.</span></li> <li><b>China: </b><span style="font-weight: 400;">Orange juice from Brazil is overtaxed. </span></li> <li><b>India: </b><span style="font-weight: 400;">The local government has implemented a price policy on sugarcane.

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