Brazil in the Twenty-First-Century International Trade: Challenges and Opportunities

This chapter discusses the impacts of globalization on international trade patterns and the required shifts in trade policies. Highlighting the effects of production fragmentation, geographic dispersion and the expansion of global value chains (GVCs), the chapter outlines the Brazilian experience to illustrate the difficulties that various countries face in acknowledging this economic reality and providing appropriate policy responses. It draws on the global value chains literature to analyze Brazil's foreign trade policies implemented during the recent ruling of the Labor Party (PT) presidents Lula da Silva and Dilma Rousseff (2003 to 2015), discussing the Brazilian strategy (or the lack of one) to integrate into global value chains. Results of this exercise have led to the conclusion that a non-GVC-oriented trade policy has allowed Brazil to integrate only superficially into globalized international production and commercial flows. The chapter concludes providing an outlook on the policy shifts required for increasing Brazil's insertion into global value chains and boosting a more prominent role in international trade.