Brazil studies ways to curb Chinese cellphone imports

Brazil's government is studying ways to curb a growing flood of cheap cellphone equipment from China that enters the country well below local manufacturing costs, a local industry official told Dow Jones Newswires.

The official said the Brazilian electronics manufacturers association, Abinee, submitted a request for actions against cheap cellphone imports to Brazil's trade ministry three months ago and is awaiting action on the matter.

"If it's proved that the value of the imports is below costs, the government can take action to balance the situation, such as charging higher taxes or requiring minimum prices for the imported items," the official said.

A spokesman for the trade ministry said the government hadn't yet reached a decision, but could have an announcement "soon" regarding the matter.

Brazilian manufacturers have complained that low-end cellphones from China have been entering the country at around $12 each, less than a third of the cost of similar models produced in Brazil.

According to Abinee, more than one-third of the 57 million cellphones sold in Brazil in 2011 were Chinese imports. In the low-end cellphone market, meanwhile, Chinese imports jumped from 50% of the total in 2009 to more than 85% last year.

The industry official estimated damage from the alleged dumping could be up to $200 million annually, but said the real cost for the country would be in jobs lost.

"The market has been heated lately, but if it slows down, the government will have to act fast to prevent job losses for the sector," he said.

According to the official, among other measures under consideration for curbing cheap imports is use of a recently passed law that would allow the government standards agency, Inmetro, to enforce minimum quality standards for cellphones.

The law would allow agency officials to inspect shipments of cellphone equipment at ports before they officially entered the country.

Recent local press reports also suggested that the Brazilian telecom regulatory agency, Anatel, could also step up quality-control standards for equipment imports.

Anatel officials as of Tuesday morning, however, didn't confirm the reports.