Brazil’s industry probe can lead to possible China trade sanctions

Brazilian President Luiz Inacio Lula da Silva on Thursday authorized the country's trade ministry to investigate whether Brazilian industries have been damaged by alleged unfair from Chinese imports, the first step toward imposition of possible trade sanctions against China.

The order for the , signed by Silva and published in Thursday's Federal Register, authorizes the Brazilian Trade and Development Ministry "to investigate for actions that tend to create disorderly market conditions within Brazil for affected domestic companies." It didn't offer a time frame for completion of the investigation.

Once it completes its probe, the trade ministry can make recommendations as to possible sanctions, including tariff increases and import quotas, the AP reports.

Cheap Chinese imports have cut Brazil's trade surplus with China by more than half this year, according to the ministry.

Earlier this week, Trade and Development Minister Luiz Fernando Furlan said Brazil was considering the imposition of trade sanctions against China after failed talks on voluntary quotas for key products, including textiles, footwear, toys and auto parts. Furlan returned from Beijing on Friday after the breakdown of talks on voluntary Chinese restrictions on exports to Brazil.

Through the end of August, Brazil has exported US$4.1 billion (Ђ3.4 billion) in goods to China, while importing US$3.3 billion (Ђ2.7 billion) for a surplus of US$800 million (Ђ663 million). That was down 51 percent from the first eight months of 2004, before Brazil granted China market economy status during a visit by Chinese President in late 2004. AM

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