IDEAS home Printed from https://ideas.repec.org/p/ags/pugtwp/333242.html
   My bibliography  Save this paper

A Computable General Equilibrium Model (CGE) assessment of the short and long-run impact on Brazil of the European Union – Mercosur Trade Agreement

Author

Listed:
  • Gonzalez Cabrera, Carlos Javier
  • Latorre, María C.
  • Ortiz Valverde, Gabriela

Abstract

The evaluation of trade agreements through general equilibrium models is very useful in the political decision making of States at the level of trade, production and citizens' welfare. This type of simulation allows the combination of several agents, factors of production and different regions, providing very detailed information at the macroeconomic and microeconomic level with the possibility of applying different assumptions that allow different results to be obtained. The "Association Agreement" between the European Union and Mercosur is an agreement that, due to its scope and size of the economies of the blocks that comprise them, is one of the largest ever reached by both, and was signed in 2019 after 20 years of negotiations. The European Union's trade policy tends towards a liberalization that transcends the purely commercial aspect and expands towards aspects related to sustainability and respect for human rights. Mercosur (made up of Argentina, Brazil, Paraguay and Uruguay) is an imperfect customs union whose main economic drive is based on trade in its internal market, and having reached a comprehensive agreement with the EU presents an opportunity to liberalize not only its trade in goods, but also in services, including aspects such as foreign direct investment (FDI) and public procurement, the latter being of special interest because it is hermetic and does not allow foreign companies to compete in its internal market to provide goods and services in the public sector. This gradual liberalization, with certain exceptions that the agreement allows, is attractive to EU companies that want to expand their operations in a huge market. This analysis, however, will focus exclusively on the impact of the agreement on Brazil through a Computable General Equilibrium Model (CGE). Brazil represents approximately ¾ of Mercosur's GDP, so the impact on this member state would largely affect the rest of the trade block.

Suggested Citation

  • Gonzalez Cabrera, Carlos Javier & Latorre, María C. & Ortiz Valverde, Gabriela, 2020. "A Computable General Equilibrium Model (CGE) assessment of the short and long-run impact on Brazil of the European Union – Mercosur Trade Agreement," Conference papers 333242, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333242
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/333242/files/10553.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Timini, Jacopo & Viani, Francesca, 2022. "A highway across the Atlantic? Trade and welfare effects of the EU-Mercosur agreement," International Economics, Elsevier, vol. 169(C), pages 291-308.
    2. Benz, Sebastian & Jaax, Alexander, 2022. "The costs of regulatory barriers to trade in services: New estimates of ad valorem tariff equivalents," Economics Letters, Elsevier, vol. 212(C).
    3. Erwin Corong & Thomas Hertel & Robert McDougall & Marinos Tsigas & Dominique van der Mensbrugghe, 2017. "The Standard GTAP Model, version 7," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 2(1), pages 1-119, June.
    4. Angel Aguiar & Maksym Chepeliev & Erwin L. Corong & Robert McDougall & Dominique van der Mensbrugghe, 2019. "The GTAP Data Base: Version 10," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 4(1), pages 1-27, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. González, Javier & Latorre, María C. & Valverde, Gabriela Ortiz, 2022. "A comprehensive short and long-run assessment on the impact of the EU-Mercosur agreement on Brazil," Conference papers 333391, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Philippidis, George & M'Barek, Robert & Urban-Boysen, Kirsten & Van Zeist, Willem-Jan, 2023. "Exploring economy-wide sustainable conditions for EU bio-chemical activities," Ecological Economics, Elsevier, vol. 210(C).
    3. Kym Anderson & Ernesto Valenzuela, 2021. "What impact are subsidies and trade barriers abroad having on Australasian and Brazilian agriculture?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 265-290, April.
    4. Corong, Erwin & Strutt, Anna, 2020. "Exploring the Impacts of Changing Energy Costs on New Zealand Agriculture to 2030: A GTAP-E-RD Application," Conference papers 333173, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Banerjee, Onil & Crossman, Neville & Vargas, Renato & Brander, Luke & Verburg, Peter & Cicowiez, Martin & Hauck, Jennifer & McKenzie, Emily, 2020. "Global socio-economic impacts of changes in natural capital and ecosystem services: State of play and new modeling approaches," Ecosystem Services, Elsevier, vol. 46(C).
    6. Mun Ho & Wolfgang Britz & Ruth Delzeit & Florian Leblanc & Roberto Roson & Franziska Schuenemann & Matthias Weitzel, 2020. "Modelling Consumption and Constructing Long-Term Baselines in Final Demand," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 5(1), pages 63-108, June.
    7. Haqiqi, Iman & Buzan, Jonathan & Zanetti De Lima, Cicero & Hertel, Thomas, 2020. "Margins of Adaptation to Human Heat Stress: Local, National, and Global Socioeconomic Responses," Conference papers 333237, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Adam Rose & Terrie Walmsley & Dan Wei, 2021. "Spatial transmission of the economic impacts of COVID-19 through international trade," Letters in Spatial and Resource Sciences, Springer, vol. 14(2), pages 169-196, August.
    9. Roson, Roberto, 2022. "Education, Labor Force Composition, and Growth A General Equilibrium Analysis," Conference papers 333421, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Taran Faehn & Gabriel Bachner & Robert Beach & Jean Chateau & Shinichiro Fujimori & Madanmohan Ghosh & Meriem Hamdi-Cherif & Elisa Lanzi & Sergey Paltsev & Toon Vandyck & Bruno Cunha & Rafael Garaffa , 2020. "Capturing Key Energy and Emission Trends in CGE models: Assessment of Status and Remaining Challenges," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 5(1), pages 196-272, June.
    11. Roberto Roson & Emanuela Ghignoni, 2023. "A Numerical Simulation of Educational Mismatch in the Italian Labor Market," Working Papers in Public Economics 241, Department of Economics and Law, Sapienza University of Roma.
    12. Shilong Yang & Xiao Liang & Zhichao Lou & Yanwen Tan & Abdelrahman Ali, 2024. "Analysing the consequences of Regional Comprehensive Economic Partnership on the agricultural economies of China, Australia and New Zealand," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 70(7), pages 362-381.
    13. Gupta, Krisna & Gretton, Paul & Patunru, Arianto, 2022. "Projecting the long run impact of an economic reform: the case of the Indonesian Omnibus Law and concurrent changes in trade policy," Conference papers 333472, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    14. Simola, Antti & Ferrari, Emanuele & Boysen, Ole & Boulanger, Pierre & Nechifor, Victor, 2021. "Food Security in Africa after the African Continental Free Trade Agreement – a Computable General Equilibrium Analysis," 2021 Conference, August 17-31, 2021, Virtual 315891, International Association of Agricultural Economists.
    15. Zhang, Qingyong & Mao, Xianqiang & Lu, Jianhong & Guo, Zhi & Duman, Zaenhaer & Chen, Yongpeng & Song, Peng & Tu, Kevin, 2024. "EU-Russia energy decoupling in combination with the updated NDCs impacts on global fossil energy trade and carbon emissions," Applied Energy, Elsevier, vol. 356(C).
    16. Strutt, Anna & Corong, Erwin & Kravchenko, Alexey & Duval, Yann, 2021. "Carbon border adjustment policies: Potential impacts on the Asia-Pacific region," Conference papers 330212, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    17. Métivier, Jeanne & Bacchetta, Marc & Bekkers, Eddy & Koopman, Robert, 2023. "International trade cooperation’s impact on the world economy," Journal of Policy Modeling, Elsevier, vol. 45(4), pages 713-744.
    18. Sartori, Martina & Ferrari, Emanuele & M'Barek, Robert & Philippidis, George & Boysen-Urban, Kirsten & Borrelli, Pasquale & Montanarella, Luca & Panagos, Panos, 2024. "Remaining Loyal to Our Soil: A Prospective Integrated Assessment of Soil Erosion on Global Food Security," Ecological Economics, Elsevier, vol. 219(C).
    19. Emanuele Ferrari & Christian Elleby & Beyhan DE JONG & Robert M'barek & Ignacio PEREZ DOMINGUEZ, 2024. "Cumulative economic impact of upcoming trade agreements on EU agriculture," JRC Research Reports JRC135540, Joint Research Centre.
    20. Dabo Guan & Daoping Wang & Stephane Hallegatte & Steven J. Davis & Jingwen Huo & Shuping Li & Yangchun Bai & Tianyang Lei & Qianyu Xue & D’Maris Coffman & Danyang Cheng & Peipei Chen & Xi Liang & Bing, 2020. "Global supply-chain effects of COVID-19 control measures," Nature Human Behaviour, Nature, vol. 4(6), pages 577-587, June.

    More about this item

    Keywords

    International Relations/Trade;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:pugtwp:333242. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gtpurus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.