Trade Policy in Brazil. What is the Agenda?

Transcription

1 Inter-American Development Bank Trade Policy in Brazil. What is the Agenda? Mauricio Mesquita Moreira, Senior Trade Economist Integration and Trade Sector Brazil and the United States: Trade Agendas and Challenges of the Bilateral Relationship Woodrow Wilson International Center for Scholars October 16, 2007

2 Outline Background Level and structure of protection. Market access. Infrastructure.

3 Opening up was substantial 60 Average MFN and Mercosur Tariff Brazil, MFN MNF Manufacturing Mercosur Average tariff (%) Source : For MFN Kume et al. (2000) and Receita Federal. For Mercosur, Estevadeordal et al. (2000) and Receita Federal.

4 And the results encouraging. 3.5 Figure 1 - Post Trade liberalization Total Factor Productivity Growth. Brazil, Mexico, Korea and Taiwan (%) Taiw an ( ) Korea ( ) Brazil ( ) Brazil ( ) Mexico ( ) Mexico ( ) Source: Mexico: , Tybout e Westbrook s (1995) and L&M (2003). Brazil : , Muedler (2002) and , L&M (2003). Korea: Hahn Taiw an: Aw, Chen e Roberts 2001

5 And the results encouraging. Figure 2 - Average TFP Growth by Firm and Industry : Brazil, Manufacturing 2.7 Traded industry Non-Traded industry in Mercosur Exporters Non-exporters Imported imputs-users Source: Lopez-Cordova e Moreira 2003 (%)

6 Import Penetration and Export Ratios in Manufacturing: Brazil and Mexico, Import penetration and exports ratios (% Imports Brazil Imports Mexico Note: Import penetration divided by domestic consumption. Export ratio is exports divided by output. Data for Mexico does not includes maquilas. Source : Own calculations based on IBGE and INEGI Manufacturing Surveys.

7 Jan-90 May-90 Sep-90 Jan-91 May-91 Sep-91 Jan-92 May-92 Sep-92 Jan-93 May-93 Sep-93 Jan-94 May-94 Sep-94 Jan-95 May-95 Sep-95 Jan-96 May-96 Sep-96 Jan-97 May-97 Sep-97 Jan-98 May-98 Sep-98 Jan-99 May-99 Sep-99 Jan-00 May-00 Sep-00 Jan-01 May-01 Sep-01 Figure 3- Relative Price of Capital Goods. Brazil Jan. 90 a Dez Note: Based on data from the wholesale price index (IPA) and general price index (IGP-OG), Fundação Getúlio Vargas.

8 The Agenda: (1)Level and Structure of Protection Figure 10 - Simple Average Nominal Tariff for Selected Countries. 2001/2002 (%) Hong Kong Switzerland Norway New Canada Australia US Nicaragua Portugal European Costa Rica Filipinas Japan Chile Guatemala Honduras Indonesia Iran El Salvador Israel Korea Taiwan Jamaica Panama Bolivia Russia Malaysia South Africa Ecuador Hungry Colombia Venezuela Saudi Arabia Mozambiqu Argentina Brazil Peru Nepal Turkey Yugoslavia Poland Jordan China Vietnam Mexico Pakistan Cambodia Thailand Algeria Kenya Zimbabwe Egypt Nigeria India Tunisia Source: Trains

9 The Agenda: (1)Level and Structure of Protection 14.0 Figure 12 - Capital Goods Tariffs* for Selected Countries. 2001/2002 (%) Brazil China Indonesia Korea Thailand * Broad Economic Categories (UN), weighted by imports tariffs for Thailand and Korea. 2002, for the other countries. Source: Trains

10 The Agenda: (1)Level and Structure of Protection Figure 11 - Nominal and Effective Tariffs by industry. Brazil 2002 (ISIC 2 digits, %) AGRICULTURE APPAREL BASIC METALS CHEMICALS COMMUNICATIO EQUIPMENT COMPUTING MACHINERY ELECTRICAL MACHINERY FABRICATED METAL PROD. FISHING FOOD PRODUCTS AND FURNITURE INSTRUMENTS LEATHER MACHINERY AND EQUIPMENT MINING METAL MINING NON-METAL MOTOR VEHICLES OIL EXTRACTION OTHER NON-METTALIC OTHER TRANSPORTATION PAPER AND PAPER PRODUCTS PUBLISHING RECYCLING REFINED OIL RUBBER AND PLASTIC FORESTRY TEXTILES TOBACCO WOOD PROD. Nominal Effective Note: Effective Rates of Protection based on the Corden's (1974) method. The technical coefficients are base on 1998 national accounts data, Table 1. Nominal Tariffs are from Trains.

11 Agenda : (2) Market access Gains from trade depend not only on liberalizing at home, but also on opening market abroad. Brazil s recent performance on the latter has been poor: No substantial gains in agriculture and erosion (LAC) and even negative preferences for manufacturing (LAC, US and EU). Trade policy seems to have been guide by the (questionable) notion that South-South (SS) agreements are inherently good for growth and North-South (NS) agreements risky and dangerous. This view seems to ignore (a) size and endowments limitations of SS and (b) the nature of the threat to manufacturing coming from Asia.

12 Agenda : (2) Market access Tariffs Paid in the US Market. Manufacturing Goods (%) China 6.0 India 6.0 Brazil 4.4 Costa Rica 2.8 Mexico Average tariff

13 Agenda : (2) Market access Tariff Paid on Chile's Market (%) MEX 5.3 CHL USA 3.4 Tariff Paid on Peru's Market (%) BRA 14.6 BRA 2.6 CHL Simple Average PER MEX 10.7 USA Simple Average

14 Agenda : (3) Trade Costs Figure 3-Weighted Average Ad Valoren Freight and Tariff for Select LAC Countries. Intraregional and US Exports % ARG BOL BRA CHL COL ECU MEX PER PRY URY VEN freigth US tariff US freight LAC tariff LAC Note: Intraregional exports includes Brazil, Argentina, Chile, Peru and Uruguay. Source: own calculations based on ALADI