Unequal trade, unequal gains: the heterogeneous impact of MERCOSUR

Rodolfo Campos and Jacopo Timini

No 2114, Working Papers from Banco de España

Abstract: We estimate the impact of MERCOSUR on trade flows and on gains from trade for its member countries using a standard modern general equilibrium quantitative structural gravity model. We find a highly heterogeneous impact on bilateral trade flows and gains from trade. We estimate that gains from trade attributable to MERCOSUR are equivalent to a 4.0 % increase in per-capita consumption for Argentina. For the other countries, gains from trade are smaller: 0.8 % for Uruguay, 0.5 % for Paraguay, and 0.3 % for Brazil. We study whether Brazil would benefit from withdrawing from MERCOSUR and signing a trade agreement with a different trade bloc but conclude that net gains from such a switch would be small, if any.

Keywords: general equilibrium; international trade; MERCOSUR; structural gravity model; trade agreements (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 F62 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2021-03
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Unequal trade, unequal gains: the heterogeneous impact of MERCOSUR (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:2114

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