Who in Brazil Will Gain from Global Trade Reforms?

Carlos Azzoni, Jonathan Brooks, Joaquim Guilhoto and Scott McDonald

No 12-2005, TD NEREUS from Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS)

Abstract: The potential impacts of multilateral trade liberalisation on developing countries are the subject of numerous controversies. One particular concern is that Brazil, a major agricultural exporter and a country with one of the world’s most unequal income distributions, will reap a substantial share of the potential benefits to developing countries from agricultural trade reform, and that most of those benefits will go to large scale commercial farmers rather than the country’s smallholders. This claim is explored via a global general equilibrium model and a national model of Brazil containing multiple agricultural and non-agricultural households. Brazil is found to account for nearly one-half of all the benefits to developing countries deriving from global agricultural trade reform. These gains are associated with improvements in the welfare of each group and a lower incidence of poverty. Large scale producers gain more than smallholders as they tend to be relatively specialised in export products, but there are important gains to agricultural employees, who are relatively poor, and to urban households, who benefit from the expansion of the agro-food sector. Overall, there is no discernible impact on income inequality, and no evidence that the gains to commercial farmers occur at the expense of poorer households.

Keywords: Brazil; trade liberalisation; poverty; inequality; agriculture (search for similar items in EconPapers)
JEL-codes: R10 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2005
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Related works:
Journal Article: Who in Brazil Will Gain from Global Trade Reforms? (2007)
Working Paper: Who in Brazil will gain from global trade reforms? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:nereus:2005_012

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