By Mario Osava
RIO DE JANEIRO, Apr 17 2002 (IPS)

The Brazilian authorities ordered 680 tons of contraband destroyed, using the spectacle of rumbling tractors crushing the illegal goods to highlight the government’s resolve to fight the piracy of intellectual property, a practice that has caused tensions in Brazil-U.S. relations.

Brazil is among the 55 countries mentioned in a report published by the U.S. government earlier this month, characterised as “protectionist” due to its high tariffs and the holes in its efforts to fight a rapidly expanding black market.

To countaract the problem, four U.S. experts were in Sao Paulo this week to train Brazilian police and customs inspectors to ferret out the pirating of compact discs, computer programmes and films, an initiative of the U.S. consulate.

The tractors began Monday to destroy toys, cigarettes, watches, televisions and other goods that have been smuggled into the country via the port of Santos. Most of the items originated in Asisa.

Federal Revenue Secretary Everardo Maciel, Brazil’s top tax and customs official, took advantage of the event to respond to U.S. pressure.

“At least 10 tons of this falsified merchandise passed through the port of New York,” he said, stressing that only a combined international effort will succeed in halting contraband.

It would be more effective to attack the source of production of these goods rather than the sellers, who are scattered all over the world, he argued.

But the spectacle of so many products being smashed by tractors – an effort that will continue for at least another month – will not slow the accelerated expansion of pirating in this country, the director-general of the Brazilian Association of CD Producers, Marcio Cunha Gonçalves, told IPS.

Illegal copies of CDs already claim half the Brazilian market, leading to annual losses of 260 million dollars for the recording industry in sales and of 65 million dollars for the government in lost tax income.

In 1997, pirated copies represented three percent of the music recording market. If nothing is done to fight “the mafias” behind this illegal industry, soon CDs will face the same fate as cassette recordings, a market that has been completely dominated by illegal copies for several years, said Cunha Gonçalves.

An industry that currently provides 60,000 jobs – directly and indirectly – could disappear, and everyone involved in music would suffer, including composers and performers, he added.

Brazil was the world’s sixth largest musical recording market in the world in 1997, and had great growth potential. Today it is in twelfth place in the international ranking, and its future is uncertain.

It is not inevitable that the problem will worsen, according to Cunha Gonçalves. With political will it can be defeated, as the authorities are doing in Mexico, where they have been able to dramatically reduce pirated music through an effective crackdown, he said.

Between 50 and 60 percent of the illegal CDs sold in Brazil, including blank discs, enter the country through its border with Paraguay, reckons the Brazilian Association of CD Producers.

Improved border controls, therefore, could contribute significantly towards reducing piracy, according to the association.

But complete eradication of this illegal activity would be difficult because technology has reached the point that, with small recorders – known as burners -, piraters can produce more than a million CDs a month.

Police recently discovered two clandestine CD recording sites in Goiania, in central west Brazil, and in Sao Bernardo do Campo, near Sao Paulo, but they represent only isolated incidents in what is a widespread illicit industry in this country of 168 million people.

Gonçalves calculates that 80 percent of the CDs sold in Brazil are recordings of Brazilian music. As a result, the losses arising from music piracy hurt the country itself, and affect the United States very little.

The United States likely suffers more from the illegal copying of computer programmes (software) and movie videos or discs, he admitted.

In Brazil, the music industry, unlike film, does not require subsidies to survive, only “that the state meet its obligation to fight crime,” he said.

But widespread impunity stimulates the growing black market, which many here now refer to as “the fourth sector”, in addition to the state, private and “third” sectors, the latter being non- profit organisations.

In addition to CDs, software and movies, there are innumerable other falsified, contraband or stolen products on a market of goods with very attractive prices for the millions of cash- strapped consumers in Brazil.

Brazilian cigarettes exported to Paraguay and smuggled back into the country are sold on the street at half the official price.

And Brazilian culture tends to value the least expensive product over quality or legality, which foments expansion of the illegal market, says inspector Roberto Precioso Junior, of the Federal Police and chairman of the Inter-Ministerial Anti-Piracy Commission, created a year ago.

But the problem is global and it profits also from the improved transportation and looser border controls that have arisen as part of the economic globalisation process.

Businesses throughout Brazil are shutting their doors or going bankrupt because it is impossible to compete with contraband that originates from the other side of the planet.

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