clipping â negociações internacionais
08.05.2018
CLIPPING INTERNACIONAL NEGINT Brasília, 08 de maio de 2018
Índice I. OMC _______________________________________________ 2 Azevêdo, more than 30 WTO members call for restraint, Appellate Body fix __ 2 US move to unilaterally hike tariffs may spiral into trade war, India tells WTO 3 II. NEGOCIAÇÕES REGIONAIS E BILATERAIS _________________ 4 Italy Favors Trade Quotas Only in Broad Agreement With U.S. ____________ 4 Singapore and Brazil sign pact to avoid double taxation __________________ 5 III. OUTROS ____________________________________________ 7 Paraguay to host new round of EU-Mercosur negotiations in mid-May _______ 7 ‘Privatization’ Is No Longer a Dirty Word in Brazil, Even in an Election Year __ 8 Brazil vehicle production climbs by 40 pct in April _____________________ 10
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I. OMC Azevêdo, more than 30 WTO members call for restraint, Appellate Body fix World Trade Online (Estados Unidos) World Trade Organization Director General Roberto Azevêdo and more than 30 WTO members on Monday called for trade tensions to cool and for the impasse over Appellate Body vacancies to be resolved, though neither statement called out the United States by name. The statement from WTO members states that the group is “concerned about increased trade tensions and related risks for the multilateral trading system and world trade. We encourage WTO Members to refrain from taking protectionist measures and to avoid risks of escalation. We call on Members to resolve their differences through dialogue and cooperation, including through WTO bodies and, as appropriate, recourse to WTO dispute settlement.” The statement has been signed by Argentina, Australia, Canada, South Korea, Mexico, Singapore and others. It is still open for signature and will be finalized Tuesday. Heads of delegation at the WTO and Azevêdo met informally on May 7. The countries take note of “difficulties in concluding negotiations and divergent positions on trade and development.” The members do not name any countries, but the United States and China have recently traded tariff threats, and a recent meeting between top Trump administration officials and top economic advisers to Chinese President Xi Jinping ended last week without a significant outcome. On the Appellate Body, the members write that they “emphasize the importance of filling all current and future vacancies on the Appellate Body without delay." Azevêdo offered similar remarks at the heads of delegation meeting. “Concerns about rising trade tensions and the blockage in appointments to the Appellate Body are very widely shared among the membership. As long as tensions persist between major trading partners, the risk of a serious escalation remains very real,” he said. 2
08.05.2018
“We must do all we can to avoid going down this path and taking measures that are difficult to reverse. When trade restrictions are pursued in this way it can threaten growth and job creation everywhere,” Azevêdo continued. “I am continuing to talk to members, and urge all sides to be very cautious in how they proceed.” Azevêdo praised members for taking up measures -- which he did not name -- in the Safeguards Committee, Trade in Goods Committee, and General Council. The United States has faced heat at the Safeguards Committee over its Section 232 tariffs on steel and aluminum, which many WTO members consider safeguards despite U.S. claims that the tariffs are driven by national security considerations. “The system was built to resolve these problems in a way that prevents further escalation -- and so it is right that members are using it. I believe that the WTO has a crucial role to play here -- as we have done many times before,” Azevêdo said. Azevêdo also urged members to find a path forward on the Appellate Body. “It is also of utmost importance that members work to resolve the impasse regarding nominations for the Appellate Body. If we do not find a solution here -- whatever shape that solution may take -- we could severely compromise the whole multilateral trading system." “I can't emphasize enough the systemic importance of this point. So again I urge members to engage and talk to each other in a solution-finding mode.” The Trump administration has blocked a nomination process to fill vacancies in the Appellate Body over systemic complaints about what it decries as judicial activism. Three of the seven seats on the Appellate Body are currently vacant.
US move to unilaterally hike tariffs may spiral into trade war, India tells WTO The Economic Times (Índia) India on Monday said that the US’ move to impose higher tariffs on steel and aluminium products on grounds of national security are an abuse of global trade provisions that could spiral into a trade war. 3
08.05.2018
The US has imposed a 25% import tariff on steel and 10% on aluminium to protect its national security and domestic producers. “Such unilateral measures, on the grounds of security exceptions, are an open and blatant abuse of the World Trade Organization provisions,” India said in an informal meeting of heads of delegations of the WTO, first after the US’ action in March. Raising the issue as a systemic one, India warned that this has a “clear risk of spiralling into a trade war” since it will prompt other countries to take retaliatory measures. India also expressed “its deep concern on the unilateral trade policy measures applied on steel and aluminium products by one member”. The US department of commerce in February found that the quantities of steel and aluminium imports “threaten to impair national security,” as defined by Section 232 of the Trade Expansion Act. Investigations under this section help determine the effects of imports on the US’ national security and give the US President the ability to address threats by restricting imports through tariffs. India stated that the security exception clause should not become a proxy instrument for applying a global safeguard in an opaque manner, and breaching bound tariff commitments made at the WTO. The US’ bound rates on core steel such as alloy and steel products is 0% and on aluminium products, including metals, is 0-5%. Bound rates are the legally-bound commitments on customs duty rates, which act as ceilings on the tariffs that countries set.
II. NEGOCIAÇÕES REGIONAIS E BILATERAIS Italy Favors Trade Quotas Only in Broad Agreement With U.S. Bloomberg (Estados Unidos)
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Italy favors tolerating quotas on metal imports to the U.S. to avert a trans-Atlantic trade war only as part of a broader agreement involving other sectors too, outgoing Economic Development Minister Carlo Calenda said. The European Union is considering the option should President Donald Trump impose restrictions on steel and aluminum shipments, according to EU officials in Brussels speaking on condition of anonymity. “I am not in favor of tolerating quotas on metals unless this is part of a broader agreement,” Calenda said in a phone interview. “This would benefit both the EU and the U.S.” “Instead of fighting over metals, we should take this opportunity to negotiate an agreement with the U.S. which is acceptable to public opinion, on tariffs and non-tariff barriers, eliminating all the controversial chapters of the Trans-Atlantic Trade and Investment Partnership,” Calenda said, mentioning the automotive, pharmaceutical and textile sectors in particular. A condition for a deal would be that any U.S. limits on steel and aluminum from the 28nation bloc be set at levels no lower than its 2017 shipments to the American market, the EU officials said. EU exports to the U.S. last year of both types of metal were worth a combined 6.4 billion euros ($7.6 billion). The EU would still reserve its right to seek arbitration and possible retaliation within the rules of the World Trade Organization, but a moderate response could buy the bloc time until November, when the U.S. has mid-term elections that could change the political calculus in Washington, according to one of the officials.
Singapore and Brazil sign pact to avoid double taxation Channel NewsAsia (Singapura) Singapore and Brazil have signed an accord to avoid double taxation, the two countries said in a joint statement on Tuesday (May 8).
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The bilateral Avoidance of Double Taxation Agreement (DTA) was signed on Monday by Singapore Foreign Minister Vivian Balakrishnan and his Brazilian counterpart Aloysio Nunes Ferreira, who is on a three-day official visit to Singapore. The two nations have also initiated discussions on a free trade agreement between Singapore and MERCOSUR, which comprises member states Argentina, Brazil, Paraguay, and Uruguay. They aim to launch the first round of negotiations in the third quarter of 2018. The ministers noted the growing trade and investment co-operation between the two countries, while Mr Nunes Ferreira also welcomed Singapore’s investments in Brazil. Singapore companies are active participants across critical sectors in Brazil, including oil and gas, infrastructure, real estate, agriculture, and transport, the joint statement said Last year, trade in goods amounted to US$3.4 billion, making Brazil Singapore’s third largest trading partner in Latin America. Brazil is currently Singapore’s largest source of frozen chicken, frozen beef and frozen pork. Since 2004, bilateral trade in services has grown at a compound annual growth rate of 33.9 per cent, totalling US$1.7 billion in 2016. During his trip, Mr Nunes Ferreira also extended an invitation on behalf of Brazil President Michel Temer for President Halimah Yacob and Prime Minister Lee Hsien Loong to visit Brazil.
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III. OUTROS Paraguay to host new round of EU-Mercosur negotiations in mid-May The Santiago Times (Chile) By mid-May, Mercosur and the European Union (EU) will have a new meeting to try to close the free trade agreement. Paraguayan Foreign Minister Eladio Loizaga confirmed that he is in contact with his peers to define the date of the meeting that would be in Asunción. The European Union and Mercosur want to close the free trade agreement that is being discussed almost twenty years ago by mid-year. The negotiators of both blocks agree that in the last year much progress was made and that an agreement is very close. Minister Loizaga confirmed that he is in talks with his Mercosur colleagues to set a new meeting date with his European counterparts to adjust the final details and finally close the agreement. “I’m talking with colleagues to set a date in the middle or end of this month to meet with European representatives. We are very confident in being able to reach an agreement shortly, “he said. Two weeks ago the representatives of Mercosur and the European Union had a new negotiation round where there was little progress. The parties were optimistic, but also made it clear that there is a need for resignations to reach an agreement. The Europeans, openly, asked Mercosur to be flexible; but Minister Loizaga indicated that the two sectors would have to make concessions in order to finally have a balanced and consensual text. The free trade agreement with the EU has been held back from the last two meetings of negotiators because of the lack of consensus on issues related to the agricultural and automotive sectors. The main objector of the automotive issue is Brazil, which is not satisfied with a total opening of the regional market. It calls for a gradual process that extends for at least ten years.
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08.05.2018
While Europeans question the demands of Mercosur to enter the block unhindered with agricultural products.
‘Privatization’ Is No Longer a Dirty Word in Brazil, Even in an Election Year Bloomberg (Estados Unidos) In one of the most iconic photo moments of his presidency, Luiz Inácio Lula da Silva waves a pair of hands slicked with crude oil from a petroleum platform operated by Brazil’s government-run oil company, Petrobras. The country’s state-heavy economy was roaring, buoyed by the global commodity boom, prompting Lula to later declare, “God is Brazilian.” Twelve years later, Lula is in jail, Petrobras is reeling from a massive corruption scandal, and Brazil’s era of undisputed resource nationalism has reached an ignominious end. As presidential elections in October approach, the long-unthinkable is now being openly debated: Should public assets be sold off? “I’d sell all the state companies,” billionaire and presidential hopeful Flávio Rocha proclaimed recently. Alvaro Dias, a centrist running for the Podemos party, has proposed a “radical downsizing” of the state. These politicians are banking that anger over corruption, the worst recession on record, and empty public coffers can help bring about a change in voters’ attitudes toward privatization. It’s a risky bet, given a recent survey showing that 7 out of 10 Brazilians oppose the idea, led by the poorer and less-educated. “Turning toward the private sector is less a question of ideology than it is of mathematics—the state is bankrupt,” says Marco Troyjo, a Brazilian-born professor of international and public affairs at Columbia University in New York. “It’s an historic debate. In all its history, the state always dominated economic activity in Brazil.” Brazilians pay the equivalent of nearly one-third of gross domestic product in taxes, one of the highest shares in the world. Besides the myriad state and federal levies, businesses also complain of excessive red tape and regulation, which they say discourage entrepreneurialism. The country ranks 153rd out of 180 nations in the anti-tax Heritage Foundation’s Index of Economic Freedom, compared with France, ranking 71st, and Mexico, in 63rd place.
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Geraldo Alckmin, who’s running for president for the second time, exemplifies the change in mindset. In 2006 he campaigned wearing a vest and a cap festooned with statecompany logos to rebut claims he was a “privatizer.” Alckmin, who in April stepped down as governor of São Paulo—the country’s richest and most industrialized state—so he could join the presidential race, has promised to sell the government’s controlling stake in Petrobras. The company had an overall stock market value of more than $87 billion as of May 7. Jair Bolsonaro, a former army captain who’s the front-runner in opinion polls among eligible presidential hopefuls, broadly supports selling state assets, though he also champions restrictions on foreign ownership of farmland and mineral deposits. “We shouldn’t opt for privatization in all cases,” he said in March. This wouldn’t be the first time Brazil has put state assets on the auction block. In the 1990s the federal and state governments sold scores of businesses, including the telephone monopoly and mining and steel companies. The sales allowed the enterprises to draw much needed financing, technology, and managerial know-how that improved operations and production—often to the benefit of Brazilian consumers. Even so, left-ofcenter politicians complained of sweetheart deals benefiting political cronies or foreign investors. “The stigma from that earlier experiment with privatization is gone,” says Rodrigo Garcia, a congressman with DEM, a right-of-center party that’s fielding a presidential candidate for the first time in almost two decades. Referring to two large, state-owned banks, he says: “Today you can say you want to sell Banco do Brasil or Caixa Econômica or merge them. You can explain this to society easily.” The federal mint and Congonhas Airport in São Paulo are among the state-owned assets being considered for sale. The planned June 14 auction of a management concession for the Lotex scratch card lottery has generated interest from several industry giants, including International Game Technology, Scientific Games, and Intralot, the finance ministry says. Any plans for auctions that do move forward will face real challenges, including prepping battered companies for sale and beefing up the regulatory environment to prevent onetime public monopolies from becoming private ones. Despite such obstacles, Renato Nobile, chief executive officer of BullMark Financial Group, is encouraged that presidential
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08.05.2018
candidates are willing to discuss what was once a taboo topic. “With one or two exceptions, there are no disaster candidates in terms of economic policy,” says Nobile. “Independent of who wins, there’s a bigger chance of getting a pro-market candidate than in previous elections.”
Brazil vehicle production climbs by 40 pct in April Xinhua (China) Vehicle production in Brazil climbed by 40 percent in April year-on-year, the national association of automakers, Anfavea, announced on Monday. According to the report, 266,111 vehicles were made in April, including cars, trucks and buses, compared with 189,487 units in April 2017. Between January and April, the Brazilian automotive industry has been racing ahead, seeing 20.7 percent growth, with a total production of 965,865 units. However, the total volume of vehicles produced is slightly lower than the average of the last decade for the first four months of the year (975,000 units). According to Anfavea, 253,000 vehicles were exported in 2018 so far, marking a 7.5 percent hike on the record export level seen in 2017. Domestic sales also showed a strong rebound, reaching 763,000 units by April, or 21 percent more year-on-year. This marked recovery, driven by exports, has also helped employment to grow in the automotive sector. Total jobs for the sector climbed from 126,500 to 131,700 in a year, or growth of 4.1 percent. Automakers have indicated they hope to close 2018 with an overall production rise of 13.2 percent, which would translate to slightly more than 3 million produced vehicles. According to Anfavea, domestic sales should reach around 2.5 million units, or 11.7 more than last year. 10
08.05.2018
It also expects exports to reach a new all-time high, with around 800,000 units sent overseas.
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CLIPPING INTERNACIONAL NEGINT Brasília, 08 de maio de 2018
Índice I. OMC _______________________________________________ 2 Azevêdo, more than 30 WTO members call for restraint, Appellate Body fix __ 2 US move to unilaterally hike tariffs may spiral into trade war, India tells WTO 3 II. NEGOCIAÇÕES REGIONAIS E BILATERAIS _________________ 4 Italy Favors Trade Quotas Only in Broad Agreement With U.S. ____________ 4 Singapore and Brazil sign pact to avoid double taxation __________________ 5 III. OUTROS ____________________________________________ 7 Paraguay to host new round of EU-Mercosur negotiations in mid-May _______ 7 ‘Privatization’ Is No Longer a Dirty Word in Brazil, Even in an Election Year __ 8 Brazil vehicle production climbs by 40 pct in April _____________________ 10
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08.05.2018
I. OMC Azevêdo, more than 30 WTO members call for restraint, Appellate Body fix World Trade Online (Estados Unidos) World Trade Organization Director General Roberto Azevêdo and more than 30 WTO members on Monday called for trade tensions to cool and for the impasse over Appellate Body vacancies to be resolved, though neither statement called out the United States by name. The statement from WTO members states that the group is “concerned about increased trade tensions and related risks for the multilateral trading system and world trade. We encourage WTO Members to refrain from taking protectionist measures and to avoid risks of escalation. We call on Members to resolve their differences through dialogue and cooperation, including through WTO bodies and, as appropriate, recourse to WTO dispute settlement.” The statement has been signed by Argentina, Australia, Canada, South Korea, Mexico, Singapore and others. It is still open for signature and will be finalized Tuesday. Heads of delegation at the WTO and Azevêdo met informally on May 7. The countries take note of “difficulties in concluding negotiations and divergent positions on trade and development.” The members do not name any countries, but the United States and China have recently traded tariff threats, and a recent meeting between top Trump administration officials and top economic advisers to Chinese President Xi Jinping ended last week without a significant outcome. On the Appellate Body, the members write that they “emphasize the importance of filling all current and future vacancies on the Appellate Body without delay." Azevêdo offered similar remarks at the heads of delegation meeting. “Concerns about rising trade tensions and the blockage in appointments to the Appellate Body are very widely shared among the membership. As long as tensions persist between major trading partners, the risk of a serious escalation remains very real,” he said. 2
08.05.2018
“We must do all we can to avoid going down this path and taking measures that are difficult to reverse. When trade restrictions are pursued in this way it can threaten growth and job creation everywhere,” Azevêdo continued. “I am continuing to talk to members, and urge all sides to be very cautious in how they proceed.” Azevêdo praised members for taking up measures -- which he did not name -- in the Safeguards Committee, Trade in Goods Committee, and General Council. The United States has faced heat at the Safeguards Committee over its Section 232 tariffs on steel and aluminum, which many WTO members consider safeguards despite U.S. claims that the tariffs are driven by national security considerations. “The system was built to resolve these problems in a way that prevents further escalation -- and so it is right that members are using it. I believe that the WTO has a crucial role to play here -- as we have done many times before,” Azevêdo said. Azevêdo also urged members to find a path forward on the Appellate Body. “It is also of utmost importance that members work to resolve the impasse regarding nominations for the Appellate Body. If we do not find a solution here -- whatever shape that solution may take -- we could severely compromise the whole multilateral trading system." “I can't emphasize enough the systemic importance of this point. So again I urge members to engage and talk to each other in a solution-finding mode.” The Trump administration has blocked a nomination process to fill vacancies in the Appellate Body over systemic complaints about what it decries as judicial activism. Three of the seven seats on the Appellate Body are currently vacant.
US move to unilaterally hike tariffs may spiral into trade war, India tells WTO The Economic Times (Índia) India on Monday said that the US’ move to impose higher tariffs on steel and aluminium products on grounds of national security are an abuse of global trade provisions that could spiral into a trade war. 3
08.05.2018
The US has imposed a 25% import tariff on steel and 10% on aluminium to protect its national security and domestic producers. “Such unilateral measures, on the grounds of security exceptions, are an open and blatant abuse of the World Trade Organization provisions,” India said in an informal meeting of heads of delegations of the WTO, first after the US’ action in March. Raising the issue as a systemic one, India warned that this has a “clear risk of spiralling into a trade war” since it will prompt other countries to take retaliatory measures. India also expressed “its deep concern on the unilateral trade policy measures applied on steel and aluminium products by one member”. The US department of commerce in February found that the quantities of steel and aluminium imports “threaten to impair national security,” as defined by Section 232 of the Trade Expansion Act. Investigations under this section help determine the effects of imports on the US’ national security and give the US President the ability to address threats by restricting imports through tariffs. India stated that the security exception clause should not become a proxy instrument for applying a global safeguard in an opaque manner, and breaching bound tariff commitments made at the WTO. The US’ bound rates on core steel such as alloy and steel products is 0% and on aluminium products, including metals, is 0-5%. Bound rates are the legally-bound commitments on customs duty rates, which act as ceilings on the tariffs that countries set.
II. NEGOCIAÇÕES REGIONAIS E BILATERAIS Italy Favors Trade Quotas Only in Broad Agreement With U.S. Bloomberg (Estados Unidos)
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Italy favors tolerating quotas on metal imports to the U.S. to avert a trans-Atlantic trade war only as part of a broader agreement involving other sectors too, outgoing Economic Development Minister Carlo Calenda said. The European Union is considering the option should President Donald Trump impose restrictions on steel and aluminum shipments, according to EU officials in Brussels speaking on condition of anonymity. “I am not in favor of tolerating quotas on metals unless this is part of a broader agreement,” Calenda said in a phone interview. “This would benefit both the EU and the U.S.” “Instead of fighting over metals, we should take this opportunity to negotiate an agreement with the U.S. which is acceptable to public opinion, on tariffs and non-tariff barriers, eliminating all the controversial chapters of the Trans-Atlantic Trade and Investment Partnership,” Calenda said, mentioning the automotive, pharmaceutical and textile sectors in particular. A condition for a deal would be that any U.S. limits on steel and aluminum from the 28nation bloc be set at levels no lower than its 2017 shipments to the American market, the EU officials said. EU exports to the U.S. last year of both types of metal were worth a combined 6.4 billion euros ($7.6 billion). The EU would still reserve its right to seek arbitration and possible retaliation within the rules of the World Trade Organization, but a moderate response could buy the bloc time until November, when the U.S. has mid-term elections that could change the political calculus in Washington, according to one of the officials.
Singapore and Brazil sign pact to avoid double taxation Channel NewsAsia (Singapura) Singapore and Brazil have signed an accord to avoid double taxation, the two countries said in a joint statement on Tuesday (May 8).
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The bilateral Avoidance of Double Taxation Agreement (DTA) was signed on Monday by Singapore Foreign Minister Vivian Balakrishnan and his Brazilian counterpart Aloysio Nunes Ferreira, who is on a three-day official visit to Singapore. The two nations have also initiated discussions on a free trade agreement between Singapore and MERCOSUR, which comprises member states Argentina, Brazil, Paraguay, and Uruguay. They aim to launch the first round of negotiations in the third quarter of 2018. The ministers noted the growing trade and investment co-operation between the two countries, while Mr Nunes Ferreira also welcomed Singapore’s investments in Brazil. Singapore companies are active participants across critical sectors in Brazil, including oil and gas, infrastructure, real estate, agriculture, and transport, the joint statement said Last year, trade in goods amounted to US$3.4 billion, making Brazil Singapore’s third largest trading partner in Latin America. Brazil is currently Singapore’s largest source of frozen chicken, frozen beef and frozen pork. Since 2004, bilateral trade in services has grown at a compound annual growth rate of 33.9 per cent, totalling US$1.7 billion in 2016. During his trip, Mr Nunes Ferreira also extended an invitation on behalf of Brazil President Michel Temer for President Halimah Yacob and Prime Minister Lee Hsien Loong to visit Brazil.
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08.05.2018
III. OUTROS Paraguay to host new round of EU-Mercosur negotiations in mid-May The Santiago Times (Chile) By mid-May, Mercosur and the European Union (EU) will have a new meeting to try to close the free trade agreement. Paraguayan Foreign Minister Eladio Loizaga confirmed that he is in contact with his peers to define the date of the meeting that would be in Asunción. The European Union and Mercosur want to close the free trade agreement that is being discussed almost twenty years ago by mid-year. The negotiators of both blocks agree that in the last year much progress was made and that an agreement is very close. Minister Loizaga confirmed that he is in talks with his Mercosur colleagues to set a new meeting date with his European counterparts to adjust the final details and finally close the agreement. “I’m talking with colleagues to set a date in the middle or end of this month to meet with European representatives. We are very confident in being able to reach an agreement shortly, “he said. Two weeks ago the representatives of Mercosur and the European Union had a new negotiation round where there was little progress. The parties were optimistic, but also made it clear that there is a need for resignations to reach an agreement. The Europeans, openly, asked Mercosur to be flexible; but Minister Loizaga indicated that the two sectors would have to make concessions in order to finally have a balanced and consensual text. The free trade agreement with the EU has been held back from the last two meetings of negotiators because of the lack of consensus on issues related to the agricultural and automotive sectors. The main objector of the automotive issue is Brazil, which is not satisfied with a total opening of the regional market. It calls for a gradual process that extends for at least ten years.
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08.05.2018
While Europeans question the demands of Mercosur to enter the block unhindered with agricultural products.
‘Privatization’ Is No Longer a Dirty Word in Brazil, Even in an Election Year Bloomberg (Estados Unidos) In one of the most iconic photo moments of his presidency, Luiz Inácio Lula da Silva waves a pair of hands slicked with crude oil from a petroleum platform operated by Brazil’s government-run oil company, Petrobras. The country’s state-heavy economy was roaring, buoyed by the global commodity boom, prompting Lula to later declare, “God is Brazilian.” Twelve years later, Lula is in jail, Petrobras is reeling from a massive corruption scandal, and Brazil’s era of undisputed resource nationalism has reached an ignominious end. As presidential elections in October approach, the long-unthinkable is now being openly debated: Should public assets be sold off? “I’d sell all the state companies,” billionaire and presidential hopeful Flávio Rocha proclaimed recently. Alvaro Dias, a centrist running for the Podemos party, has proposed a “radical downsizing” of the state. These politicians are banking that anger over corruption, the worst recession on record, and empty public coffers can help bring about a change in voters’ attitudes toward privatization. It’s a risky bet, given a recent survey showing that 7 out of 10 Brazilians oppose the idea, led by the poorer and less-educated. “Turning toward the private sector is less a question of ideology than it is of mathematics—the state is bankrupt,” says Marco Troyjo, a Brazilian-born professor of international and public affairs at Columbia University in New York. “It’s an historic debate. In all its history, the state always dominated economic activity in Brazil.” Brazilians pay the equivalent of nearly one-third of gross domestic product in taxes, one of the highest shares in the world. Besides the myriad state and federal levies, businesses also complain of excessive red tape and regulation, which they say discourage entrepreneurialism. The country ranks 153rd out of 180 nations in the anti-tax Heritage Foundation’s Index of Economic Freedom, compared with France, ranking 71st, and Mexico, in 63rd place.
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Geraldo Alckmin, who’s running for president for the second time, exemplifies the change in mindset. In 2006 he campaigned wearing a vest and a cap festooned with statecompany logos to rebut claims he was a “privatizer.” Alckmin, who in April stepped down as governor of São Paulo—the country’s richest and most industrialized state—so he could join the presidential race, has promised to sell the government’s controlling stake in Petrobras. The company had an overall stock market value of more than $87 billion as of May 7. Jair Bolsonaro, a former army captain who’s the front-runner in opinion polls among eligible presidential hopefuls, broadly supports selling state assets, though he also champions restrictions on foreign ownership of farmland and mineral deposits. “We shouldn’t opt for privatization in all cases,” he said in March. This wouldn’t be the first time Brazil has put state assets on the auction block. In the 1990s the federal and state governments sold scores of businesses, including the telephone monopoly and mining and steel companies. The sales allowed the enterprises to draw much needed financing, technology, and managerial know-how that improved operations and production—often to the benefit of Brazilian consumers. Even so, left-ofcenter politicians complained of sweetheart deals benefiting political cronies or foreign investors. “The stigma from that earlier experiment with privatization is gone,” says Rodrigo Garcia, a congressman with DEM, a right-of-center party that’s fielding a presidential candidate for the first time in almost two decades. Referring to two large, state-owned banks, he says: “Today you can say you want to sell Banco do Brasil or Caixa Econômica or merge them. You can explain this to society easily.” The federal mint and Congonhas Airport in São Paulo are among the state-owned assets being considered for sale. The planned June 14 auction of a management concession for the Lotex scratch card lottery has generated interest from several industry giants, including International Game Technology, Scientific Games, and Intralot, the finance ministry says. Any plans for auctions that do move forward will face real challenges, including prepping battered companies for sale and beefing up the regulatory environment to prevent onetime public monopolies from becoming private ones. Despite such obstacles, Renato Nobile, chief executive officer of BullMark Financial Group, is encouraged that presidential
9
08.05.2018
candidates are willing to discuss what was once a taboo topic. “With one or two exceptions, there are no disaster candidates in terms of economic policy,” says Nobile. “Independent of who wins, there’s a bigger chance of getting a pro-market candidate than in previous elections.”
Brazil vehicle production climbs by 40 pct in April Xinhua (China) Vehicle production in Brazil climbed by 40 percent in April year-on-year, the national association of automakers, Anfavea, announced on Monday. According to the report, 266,111 vehicles were made in April, including cars, trucks and buses, compared with 189,487 units in April 2017. Between January and April, the Brazilian automotive industry has been racing ahead, seeing 20.7 percent growth, with a total production of 965,865 units. However, the total volume of vehicles produced is slightly lower than the average of the last decade for the first four months of the year (975,000 units). According to Anfavea, 253,000 vehicles were exported in 2018 so far, marking a 7.5 percent hike on the record export level seen in 2017. Domestic sales also showed a strong rebound, reaching 763,000 units by April, or 21 percent more year-on-year. This marked recovery, driven by exports, has also helped employment to grow in the automotive sector. Total jobs for the sector climbed from 126,500 to 131,700 in a year, or growth of 4.1 percent. Automakers have indicated they hope to close 2018 with an overall production rise of 13.2 percent, which would translate to slightly more than 3 million produced vehicles. According to Anfavea, domestic sales should reach around 2.5 million units, or 11.7 more than last year. 10
08.05.2018
It also expects exports to reach a new all-time high, with around 800,000 units sent overseas.
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