The manufacturing industry in Brazil in the era of global value chains

Lucas Ferraz, Leopoldo Gutierre and Rodolfo Arruda Cabral

No 402, Textos para discussão from FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil)

Abstract: This article presents a comprehensive and detailed overview of the international trade performance of the manufacturing industry in Brazil over the last decades, emphasizing its participation in Global Value Chains. It uses information from recent available global inputoutput tables such as WIOD (World Input-output database) and TIVA (Trade in Value Added, OECD) as well as complementary information from the GTAP 8 (Global Trade Analysis Project) database. The calculation of a broad set of value added type indicators allows a precise contextualization of the ongoing structural changes in the Brazilian industry, highlighting the relative isolation of its manufacturing sector from the most relevant international supply chains. This article also proposes a public policy discussion, presenting two case studies: the first one related to trade facilitation and the second one to preferential trade agreements. The main conclusions are twofold: first, the reduction of time delays at customs in Brazil may significantly improve the trade performance of its manufacturing industry, specially for the more capital intensive sectors which are generally the ones with greater potential to connection to global value chains; second, the extension of the concept of a 'preferential trade partner' to the context of the global unbundling of production may pave the way to future trade policy in Brazil, particularly in the mapping of those partners whose bilateral trade relations with Brazil should receive greater priority by policy makers.

Date: 2015-09-10
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (1)

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