Recently, Brazilians were stunned by the news that the United States would be reinstating tariffs on... steel and aluminum Brazilians are using this as a pretext to offset the devaluation of the dollar in Brazil for their exports.
Despite the political issue, when analyzing this scenario from an economic and foreign trade perspective, it becomes clear that the impacts are extremely relevant for Brazil. Generally speaking, in the case of aluminum, there would be a surcharge of 10% on Brazilian exports, and in the case of steel, 25%. Given that this Brazilian semi-finished product serves as raw material for what is produced in the USA, the immediate impacts include an increase in the price of Brazilian products and a rise in production costs for US industries, not only for steel mills but also for automotive companies, among others that use these metals as raw materials. Thus, this scenario generates legal uncertainty not only for the exporter Brazilian as well as for importer American.
In general terms, the US considers the product to be imported at prices that harm competitiveness because they are below that of domestic production and, as a reaction, imposes a surcharge. Trade Defense Measures, Such measures, like surcharges, are legitimate mechanisms for protecting domestic industry, and developed countries typically have greater bargaining power than developing countries to impose them. However, There is a procedure that must be followed to avoid making the decision unjustified and illegal, otherwise it could violate the rules of the World Trade Organization (WTO).
According to economists, this attitude politicizes trade defense processes, disregarding international norms that require a technical evaluation process before adopting such measures. Despite being announced by the US president, the measure has not yet come into effect, as it first needs to be officially approved by the US Department of Commerce, and could also be reversed. Therefore, the Brazilian government can use all available means to respond to the American decision, including within the framework of the WTO Dispute Settlement System, which could grant the Brazilian government the right to retaliation.
The application of Trade defense measures require that an investigation be preceded., with the participation of all stakeholders, where information is verified and compared, so that the application of a measure or the closure of an investigation can be proposed. Among the Trade Defense Measuresl, one has the Antidumping Measures, Subsidies and Countervailing Measures and Safeguards.
As is known, o dumping It is the practice of exporting a commodity to another country at a price below the "normal value".“, understood as a price lower than the cost of production of the good or lower than that practiced internally in the exporting country. Thus, it is understood as antidumping duties A system of compensation aimed at preventing domestic industry from being harmed by imports made at dumping prices, a practice considered unfair in international trade agreements.
In cases of dumping, The investigation must be conducted in accordance with the rules established in the WTO Agreements and Brazilian legislation., ...and the procedures established by the Anti-Dumping Agreement are observed, which may imply contesting the measure adopted at the end of the investigation and its consequent revocation by order of the aforementioned body. Despite being considered... protectionist tools, Its application is technical, following the rules of GATT 1994 that originated the Law No. 9.019, 03/30/1995 , and It has a maximum term of 5 years.
It is common in international trade that exporters They attempt to circumvent restrictions on products imported from their country, being able to transport them to another location and even carry out some processing in a particular country, with the real objective being to try to change their origin and avoid taxes by disguising exports from countries like China.
Nonetheless, There are legitimate ways that importers and exporters can defend themselves against such charges., considering the moment when the surcharge was instituted in comparison with the date of registration of the Import Declaration, in addition to verifying the existence of flaws in the antidumping investigation process, among other factors, depending on each case.
DB Tesser is a leading firm in the sector and offers antidumping strategies based on the evaluation of each specific transaction.
Source: GLOBE
News commented on by Luiza Mesquita, Lawyer at the DB Tesser Law Firm.
