Representatives of Brazil’s steel association, IABr, met this week with finance minister Paulo Guedes to ask for a payback exports program, according to media reports from Valor and Estadao.
Paulo Guedes is a neo-liberal minister, who plans to “open up” the country’s economy by privatizing state-owned companies and reducing state-funded programs for the industrial sector.
The former payback exports program, also known as Reintegra, used to pay back 2 percent of a company’s exports revenue. Then, the benefit was reduced to 0.1 percent, reducing its appeal to the exporting companies. IABr wants the payback export program to increase to between 2 and 3 percent.
IABr was also concerned with a proposed reduction in the steel import tariff, currently at 12 percent. A reduction in the steel import tariff to between 4 and 5 percent, as proposed by the government, would likely impact domestic steelmakers, especially flat and longs producers, a recent Credit Suisse report said.
According to Credit Suisse, it could lead to an increased supply of imported products domestically, negatively affecting local steelmakers. IABr said it doesn’t need any protectionism, but it does want to equally compete with imported products.