In May 2004, the Mercosur and the European Union made their last offers in their negotiations for trade liberalization aiming to reach a Free Trade Agreement in the near future. In this paper the authors intend to evaluate the impacts of both offers on the Brazilian foreign trade. The estimated results indicate additional exports of 947 million dollars, 40% of which consisting of sales of just one product: ethanol. Nevertheless, the increase in ethanol exports depends on changes in demand provoked by the implementation of a new environmental policy in the European Union. The additional Brazilian imports were estimated in 1,3 billion dollars. The analysis shows that the on going negotiations on goods clearly involve two different agreements: one of an ambitious liberalization for industrialized products and another of a quite restricted liberalization for agricultural processed goods. The unbalanced results would probably worsen if the service sector had been included in the analysis.
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Length: Date of creation: 2004 Date of revision: Handle: RePEc:anp:en2004:082
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Find related papers by JEL classification: F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations