Publication: GVC Participation and Deep Integration in Brazil
Date
2018-11
ISSN
Published
2018-11
Author(s)
Abstract
The production of export goods has
become increasingly unbundled, and countries positioning to
become more integrated in the global economy are
increasingly looking toward global value chains. This paper
uses the Organisation for Economic Co-operation and
Development/World Trade Organization's Trade in
Value Added Database to assess Brazil's current
integration in global value chains. It uses a structural
gravity model estimated with parts and components to analyze
the scope for Brazil to increase global value chain–related
trade. One avenue to raise participation in global value
chains is through (deeper) preferential trade agreements,
and to this end the paper characterizes the level of
integration of Brazil's current preferential trade
agreements. Brazil has witnessed high growth in total
domestic value added embodied in gross exports since 1995,
yet it exhibits lower international engagement in global
value chains, but tends to be stronger as a seller than a
buyer. Most of the participation on the selling side comes
from indirect linkages with domestic input sectors, and
services sectors have been important for growing the
indirect value added in global value chain–oriented exports.
A deep integration agenda focusing not only on border
measures, but also on beyond-the-border measures, would help
Brazil to maximize the benefits from participation in global
value chains. Other than its natural partners, Brazil should
integrate with countries where global value chains are
taking place. New agreements signed by Brazil and Mercosur
with other regional members such as the Pacific Alliance
should also take into consideration provisions such as
investment, competition policy, and intellectual property
rights, which are demonstrated to be very important for
integration in global value chains.
Link to Data Set
Citation
“Hollweg, Claire H.; Rocha, Nadia. 2018. GVC Participation and Deep Integration in Brazil. Policy Research Working Paper;No. 8646. © World Bank, Washington, DC. http://hdl.handle.net/10986/30874 License: CC BY 3.0 IGO.”
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