As is well known, the toy sector has been suffering for more than two decades from the application of unreasonable protectionist measures, especially through the imposition of tariff barriers and trade defense measures. The Common Market Council of Mercosur, through Decision No. 60/10, authorized the Member States to apply tariffs different from those stipulated in the Common External Tariff (CET) for heading 9503 up to the level consolidated by the WTO, which is 35%. This understanding was adopted by Brazil, an example of exorbitant protection.
The average effective import tax rate for toys is approximately 32,8%, which far exceeds the practices adopted by other developing countries such as India – 20%, Indonesia – 14.6% and Mexico – 9.1%, resulting in a negative impact on companies in the sector.
Certainly, the importance and validity of protecting the national market is recognized; however, this cannot imply such large discrepancies as to discourage imports and constitute a real obstacle to maintaining business activities in the sector.
Studies that underpinned the aforementioned public consultation demonstrate, moreover, that such a high tax burden has not resulted in any improvement in the national sector or prevented the influx of "pirated" products into the national market, which have become a real risk to children's safety.
The principles of non-discrimination and most-favored-nation treatment within the WTO reject behaviors that create this marginalization of products from abroad. Ideally, there should be a balance between imports and domestic production so that society and the consumer benefit, and by imposing such a high tariff, it is obviously creating almost insurmountable restrictions on the sector, which, consequently, leads to an increase in the prices of regularly imported toys and drives consumers to seek alternatives without any quality control in the "parallel" market.
Public Consultation It is a transparency mechanism that can be used by the Public Administration to obtain information, opinions, and criticisms regarding a specific topic, and its openness provides a valuable opportunity to support the Federal Government with the greatest amount of facts, foundations, and information to underpin the decision on the proposed tariff change, which will certainly have an impact on the entire sector.
To participate, simply visit the page: http://www.camex.gov.br/consultas-publicas/98-assuntos/2641-consulta-publica-strat-se-camex-n-01-2020 and fill out the form.
Source: Camex
News commented on by Laura Ivasco, Specialist Lawyer, OAB: 312.237, Graduated in 2010 from Anhanguera University/SP, Area of expertise: Customs Law, Foreign Trade.
