Proof of Brazilian negotiating skills: the case of Chinese textiles
29/09/2005The invasion of Chinese products on the world market has harmed several countries, and that now threaten to impose protectionist barriers if the volume of exports does not change. This is the case in Brazil, which should regulate in the coming days the imposition of safeguards for Chinese products that threaten the national industry. In a meeting between members of Camex and Lula in May, it was decided that the president would sign two decrees, regulating safeguards for products in general (lasting up to 2013) and another exclusive for textiles (lasting up to 2008).
Day 23 From June, a public hearing at the Senate's Committee on Foreign Relations and National Defense focused on FIESP's proposal to discuss the recognition of China as a market economy.. The lack of quorum due to the CPI meeting of the Post Office caused the meeting to be postponed until the beginning of the next semester.. Even with this postponement, litigation is gaining prominence in the private sector and in the government. The objective of FIESP and the senators with this audience was to discuss the real consequences that Chinese exports have, both for national production and for Brazilian exports. The possible impacts of this litigation can be more serious than a simple commercial battle. The threat of imposing barriers does not come only from Brazil, also being seen in the USA and Europe. A China, in its turn, counters with the hardening of its position for the liberalization of agricultural products, mainly in multilateral trade forums, as in the WTO. If China confirms this tougher stance, the G-20 negotiations will be very compromised. Being an important member of the bloc, adopting a position contrary to what was being defended will show a weakening of the group's position in international negotiations. To Brazil, block leader, this retaliation would weaken all the diplomatic effort that has been applied successfully in the Doha Round. However, the most sensitive point of trade relations between China and Brazil is in the supply of soybeans, today the main commodity export of Brazilian agribusiness. The relationship of dependence between the two countries with regard to the purchase and sale of soybeans allows China to have in its imports a bargaining chip for trade negotiations., economic and political. Of the total volume of soybeans exported by Brazil, 30% has China as its destination. It is important to consider the possible impacts on soybean that will result from the imposition of safeguards on imports of Chinese products, especially textiles. The importance of this commodity for the Brazilian trade balance prevents its commercialization from being put at risk, or traded as a bargaining chip; the maintenance of the current economic policy also depends on the permanence or growth of grain exports. The decrease in shipments of Brazilian soy to China, fruit of American and Argentine super-harvests, may be aggravated by the imposition of safeguards. The large market offer will enable China to negotiate in a favorable position with Brazil, both in commercial and political aspects. It is enough to know which country the country is most willing to give in to.. The imposition of the barrier will be cautious. Brazil seeks to signal to China that safeguarding will only be adopted as a last resort and after negotiations. With this, the government seeks to calm the sectors of the economy affected by Chinese exports., and those who may be affected by possible country retaliation, the maximum example of soy. * Focus R.I Director. – advisory & Consulting & Rela ccedil; & otilde; s International and Vice President of C & acirc; mara With & eacute; Argentine-Brazilian Commerce S & atilde; Paul ** Focus R Consultant. I. – advisory & Consulting International Relations (www.focusri.com.br)originally published in:
RelNet – RelNet columns in. 11 ,mês 1-6 ,year 2005