Economics, Econometrics and Finance
4 years ago

MERCOSUR Trade Bloc Drives Down Prices for Nonmember Exports to Brazil

American Economic Review
How Regional Blocs Affect Excluded Countries: The Price Effects of MERCOSUR
Won Chang, L. Alan Winters

Paper Summary

The MERCOSUR trade bloc has caused prices of exports from countries outside the bloc to Brazil to decrease significantly. This happened because Brazil stopped charging tariffs to MERCOSUR members, making other exporters lower their prices to compete.

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