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GTAP Resource #1261

"The Free Trade Area of Americas and the Regional Development in Brazil"
by Ferreira-Filho, Joaquim Bento

The changes in a country’s economic structure generally don’t spread evenly through the geographic space. This is particularly true in large countries, where the concentration and specialization of the economic activity, the nature of the technology and its process, its position in relation to the consumption centers, and many other variables can affect the way through which an exogenous shock is internalized and absorbed by the national economy. The effects at regional level are hard to predict, given the complexity of the regional inter-relations.
In this paper a static inter-regional applied general equilibrium model of Brazil is used to analyze the impacts of the Free Trade Area of Americas – FTAA formation upon the Brazilian economy, disaggregated at state level (27 regions). The model is derived from the ORANIGFR, calibrated with Brazilian data for the 1996 year, and the regional economies are modeled through a “top-down” approach. It is linked to the GTAP model according to a new methodology developed by Horridge and Ferreira Filho (2003) that allows the Brazilian inter-regional model to have results consistent with the global model.
Three different scenarios are analyzed and compared: one where the same pattern of agreement observed in the North America Free Trade Area - NAFTA would result for FTAA, one where a linear 100% cut in all tariffs between the FTAA member countries apply, and another one where a 100% tariff cut between Mercosur and the European Union apply. The three scenarios imply different assumptions about the agriculture/industry products relative liberalization in trade, and have important differential impacts at regional level. These options and their meanings are discussed in the paper.

Resource Details (Export Citation) GTAP Keywords
Category: 2003 Conference Paper
Status: Published
By/In: Presented at the 6th Annual Conference on Global Economic Analysis, The Hague, The Netherlands
Date: 2003
Created: Ferreira-Filho, J. (4/30/2003)
Updated: Bacou, M. (5/5/2003)
Visits: 2,253
- South America

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