Investigation on Brazil's Change of Tax Method for Imported Textiles

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Brazilian Finance Minister Mantega said on December 28 that in order to protect the domestic textile industry from unfair competition from outside, the Brazilian government is currently formulating a new tariff measure, that is, the pricing method of import duties on imported textiles will be changed from the current "ad valor tariff" (calculated based on the value of the product) to "specific tariff" (calculated based on the weight of the product). The Brazilian government also plans to apply to the WTO to convert this measure into a temporary special safeguard. Mantega said that the Brazilian government is also preparing to apply this measure to other areas, but he did not disclose which areas. The Ministry of Development, Industry and Foreign Trade of Brazil stated that the measure still needs the approval of the Foreign Trade Commission. Relevant people believe that even if Mantega Finance Minister has announced the measure, there are still disputes in the industry.

The chairman of the Brazilian Textile and Clothing Industry Association stated that in 2011, unfair competition from outside has caused 15000 employees in the Brazilian textile industry to lose their jobs. Brazil's textile industry is not playing on an equal footing with China, India and Pakistan, which rely on government support and subsidies.