GENEVA — With its burgeoning economy, many brands are looking to make inroads into the Brazilian market, but it isn’t easy.
The South American country’s difficult barriers for exporters were highlighted at a recent review of its trade regime at the World Trade Organization. Trading partners including the U.S., the European Union and China have called on Brazil to put an end to protectionist measures such as tariff hikes and restrictive regulations that hinder international competition and spike business costs.
“U.S. exporters face significant uncertainty in the Brazilian market,” David Shark, deputy U.S. permanent representative to the WTO, said late last month. “This uncertainty is amplified by the frequent changes in tariffs made by the Brazilian government to protect domestic industries from import competition.”
Shark said Brazil should act to liberalize trade “by lowering tariffs” and noted that last October, “Brazil increased tariffs to a maximum of 35 percent on 100 industrial products. These tariff hikes could adversely affect Brazil’s competitiveness.” He said they also “create an unpredictable business environment for importers and exporters, and have a chilling effect on investment.”
Despite recent political unrest that began last month over bus and subway fare hikes in São Paulo and grew into massive nationwide demonstrations against government corruption, high taxes and poor public services, but have since subsided, Brazil, along with Russia, India and China, is among what have been dubbed the BRIC countries, representing the fastest-growing emerging economies.
A report compiled by the WTO for the review shows Brazil’s average applied most favored nation tariff in 2012 was 11.7 percent, up from 11.5 percent in 2008, and points out the manufacturing sector benefits “from the highest tariff protection,” with an average applied tariff of 12 percent, up from 11.8 percent in 2008.
The WTO also reveals that Brazil imposes much higher tariffs on imports of textiles and apparel. In 2012, for 790 textile lines, tariffs averaged 22.7 percent, and for 251 apparel lines, tariffs averaged 35 percent, substantially higher than the 12 percent average for all manufactured goods.
The EU’s WTO ambassador, Angelos Pangratis, also criticized Brazil’s determination “to pursue an increasingly protectionist industrial policy.”
“EU entrepreneurs in Brazil are faced with heavy bureaucracy, complex and not always transparent regulation and legislation, late noticing of changes in import-rate rules and labeling requirements, high transactions costs and unpredictability when dealing with Customs authorities,” Pangratis said.
Countries such as Canada, China and Pakistan were critical of amendments made by Brazil in 2010 that mandate preferential margins of 8 to 25 percent for some goods and services in government procurement for goods produced by Brazilian firms or companies that have invested in Brazil. Under the scheme, textiles and apparel are given a preferential margin of 20 percent over foreign competitors.
Yi Xiaozhun, China’s WTO ambassador, indicated his country’s concerns about Brazil’s heavy use of trade remedies, such as antidumping investigations.
Paulo Estivallet de Mesquita, director-general at Brazil’s ministry of external relations, countered that his country has remained open to trade and noted imports of industrial goods increased at an annual rate of 16.2 percent from 2007 and 2012. In 2012, Brazil’s merchandise exports were $242.5 billion, up from $160.6 billion in 2007, and its imports reached $223.1 billion, up from $120.6 billion.
Last year, exports of textiles were worth $970 million, down from $1.4 billion in 2007, while imports reached $4.2 billion, up from $2.1 billion in 2007. For apparel, exports totaled $242.5 million, down from $321.7 million in 2007, but imports surged to $2.4 billion from $603 million in 2007.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)