SAO PAULO: Brazil will take new steps to protect local industries from a strong exchange rate, including an investigation of Chinese imports that come in improperly through other countries, its trade minister told Reuters Friday. Fernando Pimentel said the probe into the so-called “triangulation” of goods would be the first of its kind in Brazil. The first case will involve blankets from China that were routed to Brazil through Paraguay and Uruguay, with further investigations expected in coming months, he said. The measures come as Brazilian President Dilma Rousseff faces enormous pressure from manufacturers, a key constituency, to slow an avalanche of imports from abroad, especially China. Brazil's currency is trading near decade-long highs, thanks to its booming economy and a flood of capital from the developed world. “We can't sit here watching our industry being devastated by the exchange rate, which isn't going to change (substantially) in the short term,” Pimentel said in an interview. Pimentel will lead a group of officials from Brazil's revenue service and trade ministry to monitor imports, a step he said will substantially improve Brazil's ability to identify dumping and other unfair trade practices. Some Brazilian business leaders have clamored for such a move for months. The measures, plus other recent steps including new barriers to slow down auto imports, have raised concerns of a new wave of protectionism in South America, although Pimentel firmly ruled that out. “This isn't protectionism. These are the instruments we have available to us,” Pimentel said, adding that the measures are permitted by the World Trade Organization. Pimentel said the auto measures in particular were not targeted at any specific country – including Argentina, which has strongly protested the move. “People think this is about Argentina. That's not the case. It's part of a big strategy to protect our industry, not a trade war with anybody,” he said. He called the auto industry “strategic” for Brazil and said a recent spike in auto imports to Brazil was emblematic of local industry's struggles.
