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Trade Restrictions in Brazil : Who Pays the Price?

Author

Listed:
  • Araújo, Sónia

    (OECD)

  • Flaig, Dorothee

    (OECD)

Abstract

This study finds that a unilateral reduction in Brazil’s relatively high barriers to trade would increase its integration into the world economy and expand production and jobs. Using a multi-region Computable General Equilibrium model that is particularly wellsuited to gauge the impact of trade policy shocks in global value chains, this study documents the effects of reducing important barriers to trade in Brazil: reducing import tariffs and local content requirements, and eliminating indirect taxes levied on exports. The largest gains in production and exports would accrue to manufacturing sectors, contradicting the widespread perception in Brazil that lifting trade protection would reduce the share of manufacturing in production. Moreover, deeper integration into global value chains would raise economic efficiency, and the higher share of foreign intermediate goods used in production would lead to lower prices, boost international competitiveness, and also benefit Brazilian households.

Suggested Citation

  • Araújo, Sónia & Flaig, Dorothee, 2017. "Trade Restrictions in Brazil : Who Pays the Price?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 32(2), pages 283-323.
  • Handle: RePEc:ris:integr:0713
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    Cited by:

    1. Yelena Andreyeva & Andrei Maltsev & Mikhail Maslennikov & Artyom Ratner, 2018. "Global Economic Relations of a Region in the Investigations of the Institute of Economics of the Ural Branch of the Russian Academy of Sciences," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(2), pages 612-622.

    More about this item

    Keywords

    Trade Policy; Global Value Chains; Brazil; General Equilibrium Model;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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