ABSTRACT
The central argument of this study is that changes in price un-
certainty per se may have important effects on trade and economic structure
ports from some sectors. Any consideration of the role of reduced uncer-
centives to greater exports created by Brazilian commercial and exchange
for a theoretical treatment of the commercial policies examined here, the
Doellinger et al., and Savasini et .a1. 1
The single most striking characteristic of Brazilian economic
exports, the idea took root that futur~ development should be oriented
through a system of import licenses, which were granted according to the
vantage could be profitably exported, with coffee alone accounting for
a multiple exchange rate was adopted. 2 Exports were sold at the official
imports was auctioned by categories. In general capital goods and some
tem was further modified in 1955, when four categories of exports were
parative advantage was assumed to be lower, and lower rates for coffee,
number of imports, with subsidies for some essentials, and premia allowed
One of the important features of Brazilian commercial policy
taxes to the foreign trade sector, in addition to those taxes specific to
production of an export. This provision of the law was not implemented
when the law was revised. 3
regime's economic policy makers, moreover, led by the Minister of Planning,
required by import substitution as one of the many inefficiencies whose
reduction was one of the principal economic goals of the new regime. In-
which for a number of sectors were considerably greater than imports used
The actual impact of the drawback provision is difficult to esti-
mate with any degree of accuracy. The Interministerial Price Council
(CIP) input-output table prepared for 1971 estimated the import content
while manufactured exports were US$ 197.8 million, yielding an import co-
the drawback provisions may actually have made Brazilian manufactured ex-
ports more import intensive than manufactures as a whole. 4
Several of the most important export incentives in the post-1964
Brazil are subject to two ,excise or sales taxes, the federal Imposto
added taxes, since they allow deductions for taxes paid on intermediate
product. 5
In November 1964, Decree Law 4502 exempted exports of manufactured
ture of production and the incidence of the tax tend to make the incentive
greater for exports whose production involves a number of intermediate
stages of production, but does not pay the IPI on the export. The exemp-
Article 24 of the Brazilian constitution exempted exports from payment of
Stto Paulo, Rio de Janeiro, Minas Gerais and Rio Grande do Sul) from which
recent years has been 16.5 percent of the factory price.
