GENEVA — Increased globalization of production of industrial goods, coupled with exchange rate misalignments, could provoke “irreversible losses” in the manufacturing structure of countries with overvalued currencies such as Brazil, warned a top textile and apparel industry executive.

“Exchange rate misalignments are at the heart of the problems faced by the industrial sector in Brazil,” said Josué Gomes da Silva, chief executive officer of Coteminas, Brazil’s second-largest textile and apparel group.

Coteminas merged with Springs Industries Inc. of Fort Mill, S.C., in 2005 to form Springs Global S.A., a Brazilian company.

Da Silva told a two-day forum on exchange rates and trade this week at the World Trade Organization that in 2011 Brazil’s manufacturing sector suffered “a very strong negative impact” caused by the competition of imports in the domestic market.

In 2011, Brazil’s deficit in manufactured goods reached $92.5 billion, whereas in 2006 it had posted a surplus of $5.1 billion. According to United Nations statistical data, Brazil’s exports of textiles last year were $1.1 billion, while imports hit $4.3 billion. Similarly, Brazil’s apparel exports were worth only $193 million, while imports reached $2 billion.

Most of these imports come from countries with depreciated currencies, while Brazil’s real has remained overvalued by 30 to 42 percent, he noted.

Da Silva cited textiles, apparel, leather, chemicals and electrical machinery as sectors that dropped significantly in 2011. Last year, manufacturing output in Brazil’s textile sector contracted 14.9 percent, apparel fell 4.4 percent and leather declined 10.4 percent, he said.

The ceo said between 2001 and 2007, his firm was able to boost exports more than sixfold only to see the trend reversed and shrink its exports back to where it was five years later. They totalled only $99 million in 2011, sharply down from the high of $635 million posted in 2007.

“We have relocated production to other countries,” he said.

Exchange rate misalignment, da Silva said, “also greatly reduces the protection granted by both bound and applied tariffs in out trade.”

He said recent research had found that a 30 percent appreciation of the real “shows that Brazilian import tariffs are actually negative for all groups of products. This creates incentives for imports.”

The deputy assistant of the U.S. Treasury, Mark Sobel, who took part in the forum, said, “A strong consensus now exists on the importance of promoting market-determined exchange rate systems, enhancing flexibility to reflect underlying economic fundamentals, avoiding persistent exchange rate misalignments and refraining from competitive currency devaluation.”

Da Silva urged trade diplomats to think about mechanisms that would control exchange rate effects over international trade.

However, experts from central banks and ministries of trade and economy pointed out that trade policy measures were not an appropriate response to nontrade concerns. Governments have to address the root causes of exchange rate misalignments, including the management of monetary policies, summed-up ambassador Martin Glass of Hong Kong, who chaired the forum.

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