GENEVA — Brazil is finalizing the legal framework for imposing safeguard quotas against China if it fails to convince Beijing to put the brakes on the surge in shipments of textiles and footwear, senior diplomats said.
Mounting political pressure from domestic producers adversely affected by the sharp increase in Chinese imports forced the government to prepare the trade defense measures.
“There was some concern voiced by Brazilian manufacturers, especially in the shoe and textiles sectors, and the government had to be sensitive to these concerns and try to talk to the Chinese,” said Luis Felipe de Seixas Corrêa, Brazil’s ambassador to the World Trade Organization.
According to Brazilian industry estimates, textile imports from China increased by 47 percent in the first six months of this year, after quotas were lifted among all WTO countries.
Brazil’s Minister of Trade and Industry, Luiz Fernando Furlan, is slated to go to China at the end of the month to try and convince Beijing to ease the flow of trade volume in these sensitive categories.
However, Brazil, which has recognized China as a market economy and has a growing trading relationship with the world’s most populous nation, wants to find a fix that does not have an adverse fallout.
In 2004, China was ranked the world’s third-largest merchandise exporter with shipments valued at $593.4 billion, up 35 percent form the year before. Brazil was 16th with $96.5 billion, up 32 percent for the year, according to WTO data.
“We want to handle this in the best possible spirit,” de Seixas Corrêa said.
China is also a member of the Brazilian-led G20 group in the Doha global trade talks that has emerged as a counterweight to the U.S. and the European Union in the negotiations on agriculture. However, should it fail to secure a deal, the mechanism will be in place for affected industries to file for safeguard action.
Brazil would not be the first developing country to resort to such trade defense instruments. Its neighbor, Argentina, as well as Turkey, are other developing nations that imposed safeguards on Chinese textiles and apparel this year.