The International Trade and Customs Newsletter aims to provide information about recent news, trends and government guidelines in Brazil and abroad in connection with international trade, market access, trade remedies, import tariffs and competitiveness. This material is intended for informational purposes and should not be used for decision-making. Specific legal advice can be provided by our lawyers.
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International Trade Team
MDIC publishes proposal for a new industrial policy
On July 20, 2023, the Ministry of Development, Industry, Trade and Services (MDIC), through Resolution CNDI/MDIC 1, published a proposal for a new industrial policy in Brazil, aimed at directing the measures of the State in order to foster the industrial development.
According to this resolution, the new policy is based on the following principles: socioeconomic inclusion; fostering of decent work and increased income; productive and technological development; increased productivity and competitiveness; reduction of regional inequalities; as well as sustainability and qualified international integration.
The resolution establishes that the new industrial policy is organized into missions – which represent the challenges of the Brazilian society – for which specific goals are defined. To this effect, such industrial development missions are aimed at fostering:
I – Sustainable and digital agro-industrial chains meant for food, nutritional and energy security;
II – Economic-industrial healthcare resilience facility in order to reduce the vulnerabilities of the Brazilian Unified Health System (“SUS”), as well as to expand access to healthcare;
III – Sustainable infrastructure, sanitation, housing and mobility intended for productive integration and well-being within cities;
IV – Digital transformation of the industry in order to increase productivity;
V – Bioeconomy, decarbonization, as well as energy transition and security so as to guard resources for future generations; and
VI – Significant technologies for national sovereignty and defense.
Finally, according to this resolution, the missions will be accompanied by aspirational goals to direct the efforts to be made by society when carrying out the measures for its development. The goals will be proposed by the ministries directly involved in the missions, along with the National Council for Industrial Development (“CNDI”), to implement the new industrial policy by 2033.
New Brazilian Export Policy established by the Brazilian Federal Government
On July 10, 2023, Decree 11,593/2023 was published, establishing the new National Export Culture Policy (“PNCE”). The PNCE aims to increase the number of exporting companies within the country as well as to advance the adoption of such exporting culture, especially among small and medium-sized companies. To this end, the decree provides for the following measures:
I – encourage exports and the exporting culture;
II – preparing and training companies interested in exporting activities;
III – sharing good practices regarding product exporting;
IV – encouraging participation in trade-related events;
V – bringing exporting companies closer to institutions that offer export-related services; and
VI – identifying opportunities to advance the exporting culture as well as the export of products and services.
The decree mentioned above also established the National Committee for the Promotion of Export Culture (“CNPCE”), which will be responsible for implementing, executing and monitoring the PNCE, in addition to approving work plans, monitoring the implementation of measures, establishing information exchange between international bodies and entities, and preparing annual reports on the enforcement of policies.
The CNPCE will be chaired by the MDIC and will be composed of the following bodies and entities:
I – Ministry of Agriculture and Livestock;
II – Ministry of Foreign Affairs;
III – Brazilian Trade and Investment Promotion Agency (Apex-Brasil); and
IV – Brazilian Micro and Small Business Support Service.
In addition, according to Decree 11,593/2023, state, confederation and federation representatives of the manufacturing sectors and of collective interests of entities operating in foreign trade, as well as other representatives of civil society, may participate upon invitation from the chair of the committee, though without the right to vote.
MDIC appoints CNDI working groups as well as civil society representatives
On June 19, 2023, Ordinance GM/MDIC 162/2023 was published, defining the members of civil society that will comprise the CNDI. The CNDI was established by Decree 11,482/2023, which determined its composition, as follows: 20 state ministers, the president of the Brazilian Development Bank (“BNDES”), and members of civil society[1]. The ordinance under discussion appoints civil society representative institutions, whose leaders will participate in the meetings and resolutions of the CNDI. Later, on July 13, 2023, Resolution CE/CNDI/MDIC 1/2023 was published, establishing temporary working groups within CNDI in order to discuss matters regarding titles, specific objectives, and goals. To this effect, the following working groups were created:
- Working Group 1: Sustainable and digital agro-industrial chains to eradicate hunger;
- Working Group 2: Health care resilience facility for disease prevention and treatment;
- Working Group 3: Sustainable infrastructure for productive integration;
- Working Group 4: Digital transformation in the Industrial sector;
- Working Group 5: Industrial sector decarbonization, enabling energy transition and bioeconomy;
- Working Group 6: Critical technologies for national sovereignty and defense; and
- Working Group 7: Sustainable housing and mobility for welfare in big cities.
The new resolution also outlines the schedule of meetings and timelines for each working group.
Sources:
[1] https://www.in.gov.br/web/dou/-/portaria-gm/mdic-n-162-de-16-de-junho-de-2023-490420252
New IWG on resilience of value chains
On July 13, 2023, Decree 11,597/2023 was published, establishing the Inter-ministerial Working Group (IWG) on resilience of value chains. The objective of this IWG is to discuss strategies aimed at increasing the resilience of value chains that push inflation, in order to reduce the impacts on food and energy security.
This working group will be composed of two representatives of the Ministry of Finance, one of whom will chair the IWG under discussion, as well as representatives of the following bodies:
I – Executive Office of the President of Brazil;
II – Ministry of Agriculture and Livestock;
III – Ministry of Science, Technology and Innovation;
IV – Ministry of Agrarian Development;
V – Ministry of Development, Industry, Trade and Services;
VI – Ministry of Management and Innovation in Public Services;
VII – Ministry of Environment and Climate Change; and
VIII – Ministry of Mines and Energy.
In view of its estimated duration of 90 days, which may be extended for an equal period of time, the IWG will work on identifying and studying the value chains that put pressure on domestic manufacturing costs in order to map the impacts on food and energy security, from an inflationary point of view. Strategies to combat such unfavorable aspects will be discussed, which should contribute to reducing the burden on costs and improving the productive, technological and commercial structures of the value chains mentioned.
As a result of the discussions, the group will prepare a report to be forwarded to the Finance Minister within 10 days as of the end of its activities.
New MERCOSUR Rules of Origin approved
On July 04, 2023, the new MERCOSUR Rules of Origin (“ROM”) was approved, during the 62nd MERCOSUR Summit, held in Puerto Iguazú, Argentina. The new ROM brings an array of changes, which are aimed at simplifying the existing regulations and streamlining the control over the origin of goods. One of the main changes is the increase from 40% to 45% in the limit of inputs and raw materials imported from outside of MERCOSUR for products manufactured in Brazil. This will apply to all industrial products and more than 80% of agricultural products. As a result of this change, Brazil and Argentina will be subject to the same regulation, whereas Uruguay will have to comply with the limit of 50%, and Paraguay, of 60%.
In addition, the new ROM allows for companies to submit declarations of origin themselves, without the need to obtain the Certificate of Origin from accredited entities, which significantly reduces costs, especially for small and medium-sized producers and exporting companies that must submit a proof of origin so as to export their goods to the MERCOSUR countries. [1]
Under negotiation since 2019, the new ROM is the result of a demand from Brazil’s manufacturing sector, having been defended by representative entities, such as the National Confederation of Industries, which included the topic in its “2023 Industry Agenda for MERCOSUR”.
Sources:
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