The FTAA and the political economy of protection in Brazil and the US

Abstract

This paper is divided in nine sections. A short introduction puts the subject matter in perspective in the context of the FTAA negotiations. Section 1 deals with obstacles to a successful conclusion of the FTAA both in Mercosur - especially in Brazil. The following section considers briefly how notions about reciprocity and balance of concessions have been applied in multilateral negotiations and how they may be adjusted in the case of negotiations involving free trade areas. The following two triads of sections refer to the United States (sections 3, 4 and 5) and Brazil (sections 6, 7 and 8). Sections 3 and 6 analyze in both economies how protectionist interests are distributed from the point of view of sectors affected and of their location (states and, for the United States, congressional districts). The relative importance of export interests by state is gauged in sections 4 and 7. The relative net balance of protectionist and export interests is evaluated in sections 5 and 8 under different assumptions in an effort to cope with the limitations of the measures used. Section 9 concludes.