Micro and Macro Determinants of trade temporary barriers: the Brazilian case over the last two decades
AbstractWhen the process of trade liberalisation started in Brazil in the late 1980s, a regime of temporary trade protection was put in place. This paper describes the use of TTB by Brazilian’s authority over the last two decades. We found them to be highly concentrated in a few sectors and to heavily rely on antidumping measures, rather than countervailing or safeguards measures. We also develop a simple empirical model to explain the micro and macroeconomic determinants of TTBs in Brazil. After controlling for the political strength of each HS six-digit sector in Brazil, as well as the time invariant characteristic of each trading partner and the level of domestic economic activity using fixed effects, we found that low import prices are not an important determinant of TTB in Brazil even though more than ninety percent of TTB that were put in place over the last two decades were antidumping cases. TTBs are more likely to be observed when imports are large. But, perhaps more interestingly, in sectors with low MFN tariffs and where MFN tariffs are falling, which suggest that MFN tariffs and TTBs are substitutes. Finally, changes in the bilateral exchange rate are important determinants of TTBs, with appreciations of the domestic currency making the imposition of restrictive TTBs more likely.
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Bibliographic InfoPaper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 0711.
Length: 48 pages
Date of creation: May 2011
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Temporary Trade Barriers; Brazil; Exchange rate;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-22 (All new papers)
- NEP-INT-2011-08-22 (International Trade)
- NEP-LAM-2011-08-22 (Central & South America)
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