Trade Liberalization and Integration of Domestic Output Markets in Brazil

47 Pages Posted: 4 Oct 2018 Last revised: 5 Oct 2018

Date Written: October 3, 2018

Abstract

This paper describes how different policy distortions have been impeding better integration of Brazil's external and internal product markets and discusses how these distortions have prevented domestic firms from benefiting from multiple sources of efficiency gains. The paper first focuses on the costs of barriers to global integration, followed by an overview of policy induced stringencies hampering domestic integration. Drawing from general and partial equilibrium analyses, the paper also provides evidence of potential impacts of removing some of those distortions and discusses policy options to promote better allocation of resources across the economy. The main conclusion of the paper is that Brazil could gain significantly from opening to foreign trade. Yet, for Brazil to take full advantage of the opportunities that external integration offers, domestic markets also need to function better, so it is key to ensure that the removal of external barriers to integration is coordinated with the removal of internal distortions to domestic market integration.

Suggested Citation

Reis, Jose Guilherme and Iootty, Mariana and Signoret, Jose and Goodwin, Tanja and Licetti, Martha and Duhaut, Alice and Lall, Somik V., Trade Liberalization and Integration of Domestic Output Markets in Brazil (October 3, 2018). World Bank Policy Research Working Paper No. 8600. Available at SSRN: https://ssrn.com/abstract=3260298

Jose Guilherme Reis (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Mariana Iootty

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Jose Signoret

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Tanja Goodwin

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Martha Licetti

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Alice Duhaut

World Bank

1818 H Street, NW
Washington, DC 20433
United States

Somik V. Lall

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/slall

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