Regional, Multilateral and Unilateral Trade Policies of Mercosur for Growth and Poverty Reduction in Brazil

Posted: 26 Mar 2004

See all articles by Glenn W. Harrison

Glenn W. Harrison

Georgia State University - J. Mack Robinson College of Business

Thomas F. Rutherford

Centre for Energy Policy and Economics

David G. Tarr

International Trade Analysis

Angelo Gurgel

FEARP - Universidade de Sao Paulo

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Abstract

This paper determines the impacts of the Free Trade Agreement of the Americas (FTAA) for Brazil under alternative assumptions concerning the returns to scale and the nature of competition in several industries, emphasizing the effects on the agribusiness activities. The GTAPinGAMS applied general equilibrium model is used to run the simulations. The results suggest different changes in output, imports, exports, and prices under alternative assumptions about market structure. The FTAA allows the exploitation of economies of scale and reduction of markups in almost all industries, with evidences of rationalizing and pro-competitive effects occurring in the industries under imperfect competition. The welfare gains from the FTAA are larger in the model with market imperfections. If the FTAA excludes products from the agribusiness sectors, the Brazilian agricultural industries will exploit less the economies of scale.

Keywords: Economic Integration, Trade Policy, Poverty, General Equilibrium

JEL Classification: F15, F17, F13, F14

Suggested Citation

Harrison, Glenn William and Rutherford, Thomas F. and Tarr, David G. and Gurgel, Angelo Costa, Regional, Multilateral and Unilateral Trade Policies of Mercosur for Growth and Poverty Reduction in Brazil. Pesquisa e Planejamento Economico, Vol. 33, No. 1, April 2003. Available at SSRN: https://ssrn.com/abstract=520222

Glenn William Harrison

Georgia State University - J. Mack Robinson College of Business ( email )

P.O. Box 4050
Atlanta, GA 30303-3083
United States
407-489-3088 (Phone)
253-830-7636 (Fax)

HOME PAGE: http://www.cear.gsu.edu/

Thomas F. Rutherford

Centre for Energy Policy and Economics ( email )

ETH-Zentrum
Zurich, CH-8092
United States
+41 (0)44/632 6359 (Phone)
+41 (0)44/632 1622 (Fax)

HOME PAGE: http://www.cepe.ethz.ch/

David G. Tarr

International Trade Analysis ( email )

7901 Hispanola Avenue
Apt. 1102
North Bay Village, FL 33141
United States
5712242796 (Phone)

HOME PAGE: http://https://sites.google.com/site/davidgtarr/

Angelo Costa Gurgel (Contact Author)

FEARP - Universidade de Sao Paulo ( email )

FEARP/USP, Av. dos Bandeirantes, 3900
Ribeirao Preto, 14040900
Brazil
+55 (16) 36023904 (Phone)

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