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

Download or read book Regional, Multilateral, and Unilateral Trade Policies of MERCOSUR for Growth and Poverty Reduction in Brazil written by Angelo Gurgel and published by World Bank Publications. This book was released on 2003 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.