Brazil protects its … wines?

on 14/06/12 at 8:58 am

Wine

Brazil is widely celebrated for having some of the world’s best beaches, soccer, and Carnival festivities.

Wines? Um, no.

Nevertheless, Brazil is considering steps to protect its tiny domestic wine industry from an onslaught of imports, in what may be the most bizarre – and controversial – example to date of rising trade protectionism in South America.

President Dilma Rousseff’s government recently agreed to evaluate an emergency request from Brazilian wine producers that, if approved, could raise tariffs on many imported wines from countries including Chile, France and Spain. A final decision is expected by August, officials say.

The temporary protection measure, known in trade parlance as a “safeguard,” has been hailed by some winery owners as their only possible salvation. They argue that Brazil’s overvalued currency, high taxes and other soaring costs have left them unable to compete with imports.

Elsewhere, though, the request has sparked a backlash.

Brazil’s trading partners, already irritated by its recent protectionist moves in other sectors including the auto industry, are expressing outrage. And in big Brazilian cities such as Sao Paulo, some restaurants have removed domestic wines from their menus to protest what they see as overreach by a politically connected industry with an inferior product.

FULL STORY via Reuters