Despite the recent measures taken by the Brazilian government to boost the country’s economic activity, the nation’s steel association, IABr, said Brazil is not protecting its steel industry the way it should.
In a conference call with journalists this week, IABr expressed its concerns regarding the current approach Brazil has adopted toward its trade defense system.
IABr said that some of the “points of concern” include the nation’s claim that the country is finally improving its economy, the liberalization and the consequent weakening of the nation’s trade defense systems, and changes in regulations that oblige companies to procure a certain level of goods and services from Brazilian sources, the “local content policy.”
“The government has tried to sell the idea that we’re already going through a recovery process, which hasn’t occurred, which isn’t occurring and which won’t occur this year,” said the president of IABr, Marco Polo.
“The government’s claim of economic liberalization goes in the opposite way of the world. We often hear that Brazil is one of the most closed markets. We have to be careful to not confuse a closed market with protectionism,” he said.
“We have a world that is walking away from globalization. There’s a steel glut in the world and all countries are trying to protect themselves,” Marco Polo said.
The executive also said Brazil should view exports an exit to the country’s sluggish demand for at least the next 10 years, as domestic demand starts to improve again.
“Everyone is operating at 50 their capacity. Some mills are operating at 70 percent and others at 40 percent their capacity. There’s a very huge level of idleness in the local steel sector,” he said.
IABr called for regulations that incentivize the use of steel and other industrial products made in Brazil, with the local content policy, so the local steel sector could use the still idle capacity.