Economic Integration: Impacts and Alternative Responses in Brazil's Northeast

The impacts of economic integration on Brazil's Northeast are evaluated using a static, long run, general equilibrium model of trade with Armington and small country assumptions to identify sectoral impacts. Based on the results, alternative responses for the region are discussed. The model includes six aggregated sectors: grains, non-grains, food, minerals, and machinery and five regions/countries: Northeast Brazil, Brazil, Mercosul, Alca and the rest of the world. The simulations performed included: the reduction of trading barriers based on the Mercosul agenda, including the elimination of tariffs among Mercosul member countries and stipulation of common external tariffs; the formation of a free trade area of the Americas-Alca (i.e. no tariffs for goods imported from Nafta, Central America, Caribbean and rest of South America); and the maintenance of a uniform exchange rate overvaluation on a customs union scenario. Results indicate improved trade balance for Mercosul and changes in sectoral contributions to gross regional product, with loses for the mineral sector and gains for the machinery and the Northeast textile sectors. This pattern is strongest for the tariff reduction scenarios. In terms of exchange rate overvaluation the losers are agricultural export producers. It is shown that the Northeast non-agricultural sectors have higher opportunities with economic integration and so special emphasis should be given to textiles and cotton production through investment in training and technology.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Agricultural Economics

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2015

Author dc:creator

• Carvalho, Eveline Barbosa Silva

Contributors dc:contributor

• Winter-Nelson, Alex

• Economics, Agricultural

Language dc:language

eng

Identifier

(MiAaPQ)AAI9912206

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/83022