Brazil announces plan to protect and boost economy

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Brazil announces plan to protect and boost economy

BRASILIA, BRAZIL (BDCi) — Brazil’s president Dilma Rousseff has announced the Plano Brasil Maior, or “Bigger Brazil Plan” to protect industries from foreign rivals and fight against cheap imports from Asia, toughening border controls and increasing anti-dumping measures.

The program as well cuts $16 billion in taxes until the end of 2012 and is focused on defending domestic manufacturers, affected by competition from Asian countries, mostly China, and recent currency appreciation, according to Brazilian newspaper, Estado de São Paulo.

One of the biggest goals of this plan is to set policy that makes Brazilian companies more cost-competitive globally which could also boost exports of Brazilian software and services.

Even though Brazil is one of the world’s fastest-growing consumer markets, the country’s manufacturers have been struggling with rising imports fueled by weakened currencies to the Brazilian real.

Due to the abundance of foreign imports, mainly from China, industrial production in Brazil has been falling in recent months.

Brazil has accused the U.S. and China of lowering the value of their currencies, driving up the real, which has gained 6% against the U.S. dollar this year.

Speaking at the unveiling of the plan, Finance Minister Guido Mantega said Brazil was operating on “a predatory, competitive world stage” and promised rigorous regulation of imports, reported BBC.

Brazil’s government believes that many countries try to bypass import controls by routing goods through a third country. Last month, Estado de Sao Paulo revealed documents from a Chinese company discussing a particular triangulation method through the Los Angeles port, the busiest container port in the U.S., to avoid Brazilian anti-dumping tariffs.

By: Adrianna Lobo
Source: BBC & Estado de São Paulo
2 August 2011

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