Monday, September 27, 2010

Brazil: Trade Wars and Currency Wars, And Antidumping Wars, Coming

Brazils finance minister says the world faces a trade war and a currency war. He said the governments of several countries including the United States and Japan, are allowing the devaluation of their currencies in order to gain markets in countries that are performing well in their domestic economies, as is the case with Brazil.

Mantega said that the next meeting of the G-20 group will lead the authorities to state that the exchange rate management needs to be much more harmonious between its participants. "I think the floating exchange rate system is better, but it must be floating for everybody,".

The minister said that the devaluation of international currencies like the U.S. dollar brings legitimate concerns to Brazilian industries. "There are countries using the currency advantage by pretense. We must preserve the Brazil market," "It's not fair to us that we can keep the market higher and it will be beneficial for other countries."

Mantega stressed that Brazil needs to get tougher on anti-dumping policy to prevent the entry of goods from other countries in a predatory manner to the domestic industry.

He showed that the government will be even more stringent to deter the entry of foreign products entering the country with very low prices, characterizing dumping. "We have to be tougher on anti-dumping policy to prevent unfair competition,".

The minister emphasized that in light of global recession, Brazil is one of the few countries that grow robustly. In this sense, many nations who experience difficulty are trying to sell "at all costs" their products in the Brazilian market. Mantega said the country should have more anti-dumping cases, but said it also depends on local industries, because they are the ones whih must initiate such complaints with the government to the extent that they feel threatened by foreign competitors.

Take the U.S. Lead

The minister highlighted the example of what happens in the U.S. because, he said, so it is formalized anti-dumping proceedings are suspended purchases of companies involved, and automatically imposed sanctions on countries that practiced unfair trade acts

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