Brazil froze all investigations of dumping practices by other countries after a presidential decree in October prohibited the tax agency from sharing information, Trade Minister Miguel Jorge said.

About 70 probes cannot be completed without data such as the amount of goods imported and the price paid, Jorge told reporters in Brasilia. Brazil’s tax agency halted the exchange of sensitive data days after President Luiz Inacio Lula da Silva issued the decree on Oct. 5, Jorge said.

“It’s a collapse,” Jorge said. “Without data from the tax agency we can’t investigate.”

Lula’s decree tightened access to Brazil’s tax database after records of family members and others allied with opposition presidential candidate Jose Serra were illegally obtained by individuals with ties to the ruling Workers’ Party.

Brazil currently has 69 anti-dumping retaliatory measures in place, the second highest number in the world, Jorge said. The suspended probes involve products such as cement from Mexico and Venezuela and shoes and magnets from China.

Latin America’s biggest economy is not going thru a process of deindustrialization, Jorge said. Domestic and foreign investments in Brazilian industry more than doubled to $130 billion in the four years ended in November, from $60 billion in the previous four-year period.

“We have some industrial sectors operating with 92 percent of installed capacity, which is production at full steam anywhere in the world,” Jorge said. “We have some very competitive sectors and others that are not so competitive. It’s possible some sectors will disappear, that’s part of the game.”

Brazil may adopt a new industrial policy after President- elect Dilma Rousseff takes office on Jan. 1, Jorge said. The ministry will submit to Rousseff’s team a proposal requiring companies to reduce prices or invest in research and development in exchange for zero taxes on investments, he added.

To contact the reporter on this story: Iuri Dantas in Brasilia at idantas@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

By Iuri Dantas - Dec 8, 2010

Source: bloomberg.com