Brazil’s auto parts industry could be the hardest hit if the United States suspends trade benefits for that country because of piracy of US movies, music and software, trade experts reportedly said on Thursday.

According to Reuters, Mark Smith, executive vice president of the Brazil-US Business Council, said the Bush administration’s announcement it was renewing trade benefits for Brazil for only 90 days, instead of the usual full year, increases pressure on that country to crack down on copyright and patent violations.

“It does send a signal to the Brazilian government that the (United States) is seriously watching Brazil’s performance in the intellectual property area,” Smith reportedly said.

The International Intellectual Property Alliance, a US consortium of music, movie, software and book publishing associations, has long pushed for the United States to suspend benefits for Brazil under the Generalised System of Preferences in retaliation for copyright theft, the report noted.

The GSP program reportedly allows Brazil and other developing countries to ship thousands of goods to the United States without paying duties – Brazil exported $US2.5 billion worth of goods to the United States under the programme in 2003.

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US trade officials said on Wednesday they would renew Brazil’s eligibility for the GSP programme for 90 days while continuing to review the copyright industries’ petition, Reuters said, adding that IIPA estimates that US companies lost more than $700 million in sales in Brazil during 2003 because of piracy and approximately $2.2 billion during the three years its petition has been under consideration.

A Brazilian trade expert, who spoke on condition that he not be identified, told Reuters $500 million to $600 million of the products that Brazil ships to the United States under the program are auto parts and accessories.

Suspending benefits for Brazil would be a two-edged sword because US companies like Ford and General Motors could face higher costs, he reportedly said.

At the same time, there’s a good chance Brazil will be able to show the United States enough progress on copyright protection to keep the programme intact, he said, according to Reuters.