Private sector is mobilized against tariffs, says former WTO director general
The former director general of the WTO (World Trade Organization), Roberto Azevêdo, this week assessed the scenario of the trade dispute between Brazil and the United States and stated that the new tariffs imposed by the Americans follow a strategy that had already been signaled by the White House.
In an interview with CNN Money, Azevêdo classified the moment as part of a "pre-announced itinerary". According to him, the United States adopted a political decision to promote the reindustrialization of the country by increasing import tariffs, with the aim of stimulating domestic investment and increasing revenue to finance economic incentive programs.
The former WTO director explained that the tariffs originally overturned by the American courts in January, as they were not sustainable under the argument of national emergency, are being resumed by other legal instruments.
Among them are a 10% horizontal tariff, applied based on legislation related to the balance of payments, and country- and sector-specific surcharges, implemented through the so-called Section 301. In the case of Brazil, the investigation underlying this measure has been underway since last year.
Although he assesses that the Brazilian situation is slightly better than at the height of the trade tension, Azevêdo warned that the scenario remains worrying. According to him, the tariff burden on Brazilian products fell from around 50% to 37.5%, but remains at a high level.
"The previous tariffs added together were 40 plus 10, it was 50%. Now we are more or less at 25 plus 12.5, which is 37.5%", he stated.
In the assessment of the former WTO director, a tariff of this magnitude continues to be enough to compromise the competitiveness of several exporting sectors. He highlighted that, added to the Section 232 measures - justified by the United States for reasons of national security and which affect products such as steel, aluminum, furniture and wood -, the restrictions affect a significant portion of Brazilian exports.
"Most of the time, you make exports unfeasible. We stop exporting," he said.
Azevêdo also highlighted that the Brazilian private sector remains strongly mobilized to try to minimize the impacts of the measures. According to him, entities such as Fiesp (Federation of Industries of the State of São Paulo) and CNI (National Confederation of Industry) closely monitor the negotiations and maintain constant dialogue with Brazilian and American authorities.
Despite this, he warned of the risk of the trade dispute being incorporated into the Brazilian electoral debate. For the former WTO director, the focus of discussions must remain on economic impacts and the preservation of jobs.
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"What we must not do is be tempted to use everything that is happening for electoral purposes", he stated. "Jobs are on the horizon and we need to make this a priority and not necessarily the elections."
Regarding negotiations with Washington, Azevêdo defended a pragmatic and comprehensive stance. Although the American investigation is focused on topics such as tariffs on ethanol, deforestation, PIX, regulation of digital platforms and intellectual property, he believes that the dialogue can also advance on other fronts.
According to the former WTO director, issues such as strategic minerals, including rare earths, and rules for electronic transmissions can open up space for understanding between the two countries.
"It's a question of creativity, identifying opportunities to talk to the other side and trying to find areas of convergence", he concluded.
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Source: CNN