Brazil includes US-made boats on retaliatory tariff list
By IBI Magazine
Brazil today released a list of US products that it will include on a retaliatory tariff. According to the National Marine Manufacturers Association (NMMA), US-built powerboats to be imported into Brazil are on the list, while US-built sailboats and engines are not. The proposed hike is scheduled for April 8th, and would double the tariff on US imported boats from 20 to 40 per cent. The list of dozens of goods also includes American-made cars, refrigerators and agricultural goods. Brazil is being allowed to raise tariffs by the World Trade Organization (WTO) because of an ongoing trade dispute on cotton subsidies. "We lost a dispute within the WTO regarding cotton subsidies to US farmers," said Cindy Squires, chief counsel public affairs/director of regulatory affairs for the NMMA. "The WTO then told Brazil that it could institute a retaliatory tariff on other products in the amount that US cotton producers have benefited over their Brazilian counterparts." NMMA worked with Brazil's marine industry association, ACOBAR, to have boat engines removed from the list of targeted items. Many Brazilian boatbuilders rely on US engines to complete their boats. "My guess is that imported boats, should this new tariff policy actually be enforced, will pretty much be priced out of the market," said Bill Craddock, president of Mercury Marine in Brazil. Besides the tariff, local and regional authorities impose taxes on new boats. Squires is hoping that boats will eventually be removed from the list. US Secretary of State Hillary Clinton met with Brazilian Foreign Minister Secretary Celso Amorim last week to begin negotiations on this issue. Both countries expect an agreement to be reached before the list becomes effective. Squires said she is attempting to find out which US builders export boats into Brazil in order to build a lobbying coalition. "Unfortunately, we're caught in the middle of a fight that is not our making," says Squires. "It's all about cotton. But it's not over yet. The list will most likely change in the next 30 days."
(8 March 2010)
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