The impact of Transatlantic Trade and Investment Partnership (TTIP) on the Brazilian economy

Abstract

The objective of this study is to assess the impact of the creation of a free trade area between the United States and the European Union (EU), i.e. Transatlantic Trade and Investment Partnership (TTIP) on the Brazilian economy, specifically in the five macro-regions. To this end, the General Equilibrium (GtapinGams) model was used from the database of the General Equilibrium Analysis Project of the Brazilian Economy (Paeg). In this sense, two scenarios were estimated; the first with the elimination of import tariffs between the EU and the USA, and the second approaches the full liberalization of trade. In the first scenario, the economic impacts in the Brazilian regions were mostly negative, undermining mainly the sectors of clothing, footwear and the textile industry. In the second scenario, both the Brazilian agricultural export and producer sector are positively influenced. However, the clothing, footwear and manufactured sector were the ones that had higher efficiency losses.