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Brazil’s Trade Liberalization and Growth: Has it Failed?

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  • Mauricio Mesquita Moreira

    (Inter-American Development Bank)

Abstract

Unfulfilled expectations about economic growth in Brazil has led many observers to question the ability of the new, open trade regime to put the economy back on an path of sustainable growth. Whereas the country’s growth record has been really poor, the evidence suggests that the underlying causes had nothing to do with trade. Quite the contrary. This paper shows that trade liberalization has given an important contribution to two of the main drivers of growth: productivity and investment in physical capital. It argues that these gains were not turned into growth due to an unfavorable macro and institutional environment. It also claims that Brazil could have enjoyed more gains from trade, had it pursued a more aggressive trade policy at home and abroad. The paper concludes by outlining the main issues of a pro- growth, trade policy agenda for the country.

Suggested Citation

  • Mauricio Mesquita Moreira, 2004. "Brazil’s Trade Liberalization and Growth: Has it Failed?," International Trade 0412008, EconWPA.
  • Handle: RePEc:wpa:wuwpit:0412008 Note: Type of Document - pdf; pages: 19
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    File URL: http://econwpa.repec.org/eps/it/papers/0412/0412008.pdf
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    Cited by:

    1. Vito Tanzi, 2005. "Building regional infrastructure in Latin America," INTAL Working Papers 2642, Inter-American Development Bank, INTAL.
    2. Nazmi, Nader & Revilla, Julio E., 2008. "Economic Efficiency and Growth: Evidence from Brazil, China, and India," WIDER Working Paper Series 086, World Institute for Development Economic Research (UNU-WIDER).
    3. Anneke Jessen & Christopher Vignoles, 2005. "Jamaica: trade, integration and the quest for growth," INTAL Working Papers 1264, Inter-American Development Bank, INTAL.
    4. Marcelo de Paiva Abreu, 2006. "The FTAA and the Political Economy of Protection in Brazil and the U.S," IDB Publications (Working Papers) 2666, Inter-American Development Bank.
    5. Manuel Orozco & Rachel Fedewa, 2007. "Leveraging efforts on remittances and financial intermediation," INTAL Working Papers 1448, Inter-American Development Bank, INTAL.
    6. Elsnit, 2005. "Second Annual Conference of the Euro-Latin Study Network on Integration and Trade, ELSNIT : Issues papers," INTAL Working Papers 2414, Inter-American Development Bank, INTAL.
    7. Eric T. Miller, 2005. "Achievements and challenges of trade capacity building : a practitioner's analysis of the CAFTA process and its lessons for the multilateral system," INTAL Working Papers 1268, Inter-American Development Bank, INTAL.
    8. Mario Jales & Marcos Sawaya Jank & Shunli Yao & Colin Carter, 2006. "Agriculture in Brazil and China : challenges and opportunities," INTAL Working Papers 1296, Inter-American Development Bank, INTAL.
    9. Marcelo de Paiva Abreu, 2006. "The FTAA and the political economy of protection in Brazil and the US," INTAL Working Papers 2646, Inter-American Development Bank, INTAL.
    10. Elsnit, 2006. "Third Annual Conference of the Euro-Latin Study Network on Integration and Trade, ELSNIT : Issues papers," INTAL Working Papers 2416, Inter-American Development Bank, INTAL.
    11. Mauricio Mesquita Moreira, 2009. "Brazil's Trade Policy: Old and New Issues," IDB Publications (Working Papers) 9295, Inter-American Development Bank.
    12. Marcelo de Paiva Abreu, 2005. "The FTAA and the political economy of protection in Brazil and the US," Textos para discussão 494, Department of Economics PUC-Rio (Brazil).
    13. Mauricio Mesquita Moreira, 2009. "Brazil's Trade Policy: Old and New Issues," IDB Publications (Working Papers) 2508, Inter-American Development Bank.
    14. Vito Tanzi, 2005. "The production and financing of regional public goods," INTAL Working Papers 2824, Inter-American Development Bank, INTAL.
    15. Nader Nazmi & Julio Revilla, 2011. "Brazil’s growth performance: a comparative perspective to the Asian giants," Economic Change and Restructuring, Springer, pages 7-24.
    16. Luis A. Arias & Alberto Barreix & Alexis Valencia & Luiz Villela, 2005. "The harmonization of indirect taxes in the Andean Community," INTAL Working Papers 2820, Inter-American Development Bank, INTAL.
    17. Robert Devlin & Ziga Vodusek, 2005. "Trade related capacity building : an overview in the context of Latin American trade policy and the MERCOSUR-EU association agreement," INTAL Working Papers 1262, Inter-American Development Bank, INTAL.
    18. Acharya, Sanjaya, 2011. "Making unilateral trade liberalisation beneficial to the poor," Socio-Economic Planning Sciences, Elsevier, vol. 45(2), pages 60-71, June.
    19. Juan S. Blyde, 2006. "Assessing the impacts of intellectual property rights on trade flows in Latin America," INTAL Working Papers 1274, Inter-American Development Bank, INTAL.
    20. Arbache, Jorge Saba, 2004. "Do Structural Reforms always Succeed? Lessons from Brazil," WIDER Working Paper Series 058, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Brazil; Trade; Growth;

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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