IDEAS home Printed from https://ideas.repec.org/p/ris/nereus/2024_004.html
   My bibliography  Save this paper

The Political Economy behind Trade and Land Use: Legal Amazon in the EU-Mercosur Free Trade Agreement

Author

Listed:
  • Leal, Alan

    (Departamento de Economia, Universidade de São Paulo)

  • Haddad, Eduardo

    (Departamento de Economia, Universidade de São Paulo)

Abstract

Contingent free trade agreements are an instrument of interaction between countries that is being used more recently. In this paper, we consider the European Union-Mercosur Free Trade Agreement and how this FTA can be used by EU to induce certain land use changes in Brazil. This analysis uses a quantitative trade model and different trade arrangements to test whether these conditional trade agreements accomplish what they originally intend. We find that in the case of the EU-Mercosur FTA, Brazilian Legal Amazon states tend to alternate at seeing reduction of land use. However, for the kinds of trade arrangement, among the ones considered in this paper, welfare seems to increase state-wide. This indicates that even if Brazil concede entering in non-totally free trade agreements, there are trade gains to be obtained. Internally to Brazil, nevertheless, a contingent free trade agreement might create some political instability for the country. Our paper aims to anticipate this political discussion by bringing to the front the fact the any kind of trade agreement will benefit states differently.

Suggested Citation

  • Leal, Alan & Haddad, Eduardo, 2024. "The Political Economy behind Trade and Land Use: Legal Amazon in the EU-Mercosur Free Trade Agreement," TD NEREUS 4-2024, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    • Handle: RePEc:ris:nereus:2024_004
    as

    Download full text from publisher

    File URL: http://www.usp.br/nereus/wp-content/uploads/TD_NEREUS_04_2024.pdf
    File Function: Full text
    Download Restriction: ris
    ---><---

    References listed on IDEAS

    as
    1. Pellegrina, Heitor S., 2022. "Trade, productivity, and the spatial organization of agriculture: Evidence from Brazil," Journal of Development Economics, Elsevier, vol. 156(C).
    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. Gabriel Browne de Deus Ribeiro & Maria das Dores Saraiva De Loreto & Edna Lopes Miranda & Rosária Cal Bastos & Catariny Cabral Aleman & Fernando França da Cunha & Paola Delatorre Rodrigues, 2024. "The Use of Financial Tools in Small-Scale Irrigated Crops to Assess Socioeconomic Sustainability: A Case Study in Tocantins-Araguaia Basin, Brazil," Sustainability, MDPI, vol. 16(5), pages 1-15, February.
    2. Araujo, Rafael & Costa, Francisco J M & Sant'Anna, Marcelo, 2020. "Efficient Forestation in the Brazilian Amazon: Evidence from a Dynamic Model," SocArXiv 8yfr7, Center for Open Science.
    3. Raahil Madhok & Frederik Noack & Ahmed Mushfiq Mobarak, 2022. "Rural-Urban Migration and the Re-organization of Agriculture," Cowles Foundation Discussion Papers 2349, Cowles Foundation for Research in Economics, Yale University.
    4. Bruno Conte, 2022. "Climate Change and Migration: The Case of Africa," CESifo Working Paper Series 9948, CESifo.
    5. Araujo, Rafael & Borges, Bruna & Costa, Francisco J M & Santos, Kelly, 2024. "Seeds of Disparity: the Gender Land Divide from Brazil's Agricultural Transition," SocArXiv dk4bc, Center for Open Science.
    6. Carreira, Igor & Costa, Francisco & Pessoa, João Paulo, 2024. "The deforestation effects of trade and agricultural productivity in Brazil," Journal of Development Economics, Elsevier, vol. 167(C).
    7. Remi Jedwab & Federico Haslop & Roman Zarate & Carlos Rodriguez-Castelan, 2023. "The Effects of Climate Change in the Poorest Countries: Evidence from the Permanent Shrinking of Lake Chad," Working Papers 2023-06, The George Washington University, Institute for International Economic Policy.
    8. Rodrigo Aparecido Jordan & Rodrigo Couto Santos & Ricardo Lordelo Freitas & Anamari Viegas de Araújo Motomiya & Luciano Oliveira Geisenhoff & Arthur Carniato Sanches & Hélio Ávalo & Marcio Mesquita & , 2023. "Thermal Properties and Temporal Dynamics of Red Latosol (Oxisol) in Sustainable Agriculture and Environmental Conservation," Resources, MDPI, vol. 12(9), pages 1-16, September.
    9. Gáfaro, Margarita & Pellegrina, Heitor S., 2022. "Trade, farmers’ heterogeneity, and agricultural productivity: Evidence from Colombia," Journal of International Economics, Elsevier, vol. 137(C).
    10. Heitor Pellegrina & Sebastian Sotelo, 2019. "Migration, Specialization and Trade: Evidence from the Brazilian March to the West," 2019 Meeting Papers 863, Society for Economic Dynamics.
    11. Mingming Li & Marko Milojevic & Dmitry Gura, 2024. "Development of methodology for evaluating sustainable rural development," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(8), pages 21237-21257, August.

    More about this item

    Keywords

    trade; land use; quantitative spatial model;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ris:nereus:2024_004. 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: Eduardo Amaral Haddad (email available below). General contact details of provider: https://edirc.repec.org/data/neuspbr.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.