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Effects of EU-Mercosur trade agreement on bilateral trade: the role of Brexit

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  • Sanguinet, Eduardo
  • Alvim, Augusto

Abstract

This article aims to assess the impact of the EU-Mercosur Agreement on the Brazilian economy using the Computable General Model (CGE) Global Trade Analysis Project (GTAP). The study proposes two sets of simulations – one with the United Kingdom as a member of the EU and the other without being a member, according to Brexit context. There is evidence of positive effects on foreign trade and on the welfare level in Brazil, with emphasis on manufactured goods and the grains of crops. The EU consolidates its presence in global trade. The results show that Mercosur benefits Brazilian foreign trade, making it a strategic partner at the regional level. It is concluded that Brexit can reduce Brazilian gains in the EU-Mercosur agreement, being important the discussion about the creation of another agreement involving the United Kingdom.

Suggested Citation

  • Sanguinet, Eduardo & Alvim, Augusto, 2020. "Effects of EU-Mercosur trade agreement on bilateral trade: the role of Brexit," MPRA Paper 103010, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:103010
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    References listed on IDEAS

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    1. Angel Aguiar & Badri Narayanan & Robert McDougall, 2016. "An Overview of the GTAP 9 Data Base," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(1), pages 181-208, June.
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    More about this item

    Keywords

    Policy analysis; GTAP; Brexit; Brazil; Mercosur.;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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