EFFECTS OF BRAZILIAN INTEGRATION WITH IMPORTANT TRADE PARTNERS USING A COMPUTABLE GENERAL EQUILIBRIUM MODEL

Abstract

The study examines through a Computable General Equilibrium (CGE) model the effects the creation of Preferential Trade Agreements (PTAs) with important trade partners of Brazil would have on key variables for the economy, especially welfare and trade. The results show a significant increase in exports of primary products and low technological intensity, when simulated the partial and full reduction of import tariffs. However, with the full reduction of tariffs and Non-Tariff Barriers (NTBs), Brazilian exports of sectors with higher technological content would be the most benefited, while the partial liberalization of NTBs, besides reducing the magnitude of exports in all agreements, would stimulate more sectors of lower technological content in most agreements. With regard to welfare gains, the same behavior of exports is observed, when reduction of NTBs occur, the greatest welfare gain is obtained in sectors of higher technological intensity.

Keywords

• preferential trade agreements
• computable general equilibrium model
• gtap