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Here's a great supplement to my piece today, a Bloomberg commentary predicting the continued slashing of Brazilian interest rates. Among the interesting points: 100 economists surveyed by the Brazilian Central Bank said interest rates would drop to 11% by the end of 2009, and that the two leading candidates for president in 2010, Jose Serra and Dilma Rousseff, seem to favor lowering rates. The headline, "Brazil Kisses High Interest Rates Farewell," exaggerates the writer's conclusion, but writers don't write headlines. (Except in this Reporter's Notebook, so blame me for the pun.)
And the big news this morning is that the Brazilian government retreated somewhat on their decision earlier this week requiring importers to seek government pre-approval before goods arrived in Brazil. The policy, which was widely interpreted as blatant act of protectionism-via-bureaucracy, was decried from all sides of the private sector and even by many government officials. But Brazil is hardly alone in its barrier-erecting instincts in times of financial crisis, as has also been widely noted here. Both the House and Senate versions of President Obama's stimulus package restrict what foreign goods can be purchased with the appropriated funds. The House version, passed yesterday, prohibits foreign-made steel; the Senate version, still pending a vote, prohibits foreign made just-about-everything. Brazil loves bureaucracy, the U.S. loves legislation, and neither, these days, loves free trade.