Abstract:
The present article evaluated the impacts of the Trade Agreement between the European Union (EU) and Mercosur on the Brazilian economy, focusing on the sector of roasted and soluble coffee (processed), which will have export tariffs eliminated in 4 years after its implementation. This may be considered one of the largest free trade areas in the world, and the elimination of tariffs is expected to increase exports of the processed coffee sector to the EU by 33%. Input-Product analysis was used, based on data from the national accounts with 128 products and 68 sectors in 2017, to estimate the Rasmussen-Hirschman connection indexes, dispersion indexes, product, income, taxes, and job multipliers. It was observed that the increase in exports may provide an increase in the gross value of national production of R$ 158.3 million (directly and indirectly), in addition to generating 1.2 thousand new jobs, R$ 24.6 million in labor income, and R$ 6.5 million in taxes. Even though this agreement is not considered a key sector in the Brazilian economy, it was found that the growth of processed coffee exports, after its implementation, may favor the country's economic activity, providing growth in national production, employment, income, and taxes.
Keywords:
trade agreement; soluble coffee; European Union; input-output matrix
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