JAC suspends factory opening in Brazil.
Chinese automaker accuses Brazil of disregarding WTO guidelines by increasing the IPI tax and of having an irrational policy, according to a Folha report.
247 – The automaker JAC accused Brazil of disrespecting WTO (World Trade Organization) guidelines by increasing the IPI (Tax on Industrialized Products) rate, according to a report in Folha de S.Paulo published this Friday. The Chinese company confirmed that it will reassess the opening of its factory in Brazil, announced in August with planned investments of R$ 600 million.
In a written response to the newspaper, JAC accused Brazilian policy of being "discontinuous, irrational, and biased" and said that the attitude had damaged the confidence of the company and other automakers in investing in the country. "Therefore, JAC is forced to reassess its investment decision in Brazil," it stated. The company cited three alleged violations by Brazil of the general guidelines of the WTO: market access, fair competition, and non-discrimination.
According to the report, JAC representatives met with the Ministry of Commerce on Tuesday to pressure the Chinese government to act in favor of the company, but as of yesterday there had been no official statement on the matter. The factory was expected to begin producing approximately 100 vehicles per year in 2014, generating 3.500 direct jobs and another 10 indirect jobs.