Brazilian Trade Policies: Some Observed and Estimated Effects of the 1990s Liberalization

This paper seeks to examine economic effects of Brazil’s trade policy liberalization in the early-1990s. The effects in Brazil, along with those of many other countries pursuing similar reforms, have been contentious. The period in question was one of macroeconomic turmoil followed by successful stabilization, and various policies were pursued sometimes simultaneously, rendering it analytically difficult to separate out various policy effects. The paper examines the existing evidence on the country’s productivity growth and employs a computable general equilibrium (CGE) model to simulate the effects of trade policy changes. The analysis suggests that the trade policy reforms resulted in significant welfare gains for Brazil. KeywoRds trade liberalization, protection, general equilibrium model analysis Jel ClassifiCation F14  Faculdade de Ciências Econômicas, Universidade do Estado do Rio de Janeiro (UERJ). E-mail: [email protected]. O autor agradece à Fundação de Amparo à Pesquisa do Estado do Rio de Janeiro (FAPERJ) pelo apoio financeiro.  Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto – FEA-RP/USP. Endereço para contato: Av. dos Bandeirantes, 3900 – Monte Alegre – Ribeirão Preto SP. CEP: 14090-900. E-mail: [email protected]. (Recebido em julho de 2007. Aceito para publicação em junho de 2008).