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Brazil Lowers Duties on Additional Products

Brazilian authorities recently announced the addition of 275 items to a list of foreign capital goods and information technology and telecommunications goods that benefit from reduced duty or duty-free treatment under the Ex-Tarifario regime. Of this total, 251 items are capital goods (229 new and 22 renewals) and the remaining 24 are IT and telecom goods (14 new and 10 renewals). Classified in HS chapters 73, 84, 85, 87 and 90, the capital goods will benefit from a reduced duty of two percent through 31 December 2017 (down from a duty of 14 percent), with the exception of two items that will benefit from such treatment through 31 December 2016. The IT/telecom goods, which are classified in HS chapters 84, 85 and 90, will also benefit from a reduced duty of two percent (down from 16 percent) through 31 December 2017.

Brazil’s Foreign Trade Chamber (CAMEX) indicates that 19.29 percent of the goods benefiting from the duty reductions under Resolution 33/2016 and Resolution 34/2016 originate in Germany, 22.16 percent originate in Finland, 14.07 percent originate in Italy, 10.83 percent originate in the United States, 8.24 percent come from South Korea, 6.91 percent come from the Netherlands and 4.20 percent originate in mainland China. These concessions have been granted to domestic manufacturers that are planning to expand production or begin new operations representing a total investment that exceeds US$791 million.

CAMEX also recently added through Resolution 35/2016 a total of 60 items and modified the description of one item in the list of automotive parts that benefit from a reduced two percent duty, down from 10, 14, 16, 18 or 20 percent. Moreover, CAMEX has established tariff-rate quotas on the products listed below to correct a lack of supply in the Brazilian market.

  • Corn
    A maximum of one million tonnes of corn classified under NCM 1005.90.10 will benefit from duty-free treatment for a period of six months. Out-of-quota merchandise will be subject to a regular MFN rate of eight percent. This action comes in response to a request from the Brazilian meat sector, which claims it needs the tariff reduction to gain access to cheaper feed for its poultry and pork operations.
  • p-Xylene
    A maximum of 90,000 tonnes of p-Xylene classified under NCM 2902.43.00 will benefit from duty-free treatment from 24 May through 19 November. Out-of-quota merchandise will be subject to a regular MFN rate of 12 percent. p-Xylene is used as an input for the production of terephthalic acid, which is used in the manufacture of PET resin (a chemical used in the production of liquid bottles in the food sector and polyester fibres in the textile sector).
  • Casein
    A maximum of 1,900 tonnes of casein classified under NCM 3501.10.00 will benefit from a reduced two percent duty for a period of one year. Out-of-quota merchandise will be subject to a regular MFN rate of 14 percent. Casein is used in the production of various dairy products such as cheese.
  • Vinyl Co-polymers
    A maximum of 5,000 tonnes of vinyl chloride-vinyl acetate co-polymers classified under NCM 3904.30.00 will benefit from a reduced two percent duty for a period of one year. Out-of-quota merchandise will be subject to a regular MFN rate of 14 percent.
  • Human Serum Albumin
    Up to 240,780 vials (10 grams each) of human serum albumin classified under NCM 3002.10.37 will benefit from duty-free treatment for a period of six months from 4 April. Out-of-quota merchandise will be subject to a regular MFN rate of four percent.

In addition to the above, the Brazilian government has reduced from eight or 14 percent to zero the duty on certain pesticide products classified under NCM 3004.90.69 and 3808.91.91 as part of on-going efforts to reduce the cases of Zika virus in the country. Brazil has also lowered from eight percent to zero its duty on certain medicines used in the treatment of diabetes and certain heart and brain conditions. Moreover, the duty on certain moulds classified under NCM 8480.71.00 that are used in the vulcanisation and shape-moulding of tyres has been reduced from 30 percent to 14 percent.

Content provided by Picture: HKTDC Research
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