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2019 | OriginalPaper | Buchkapitel

13. Global Implications of International Integration of the Brazilian Economy

verfasst von : Elias C. Grivoyannis

Erschienen in: International Integration of the Brazilian Economy

Verlag: Palgrave Macmillan US

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Abstract

International economic integration of national economies establishes value supply chains that create exploitable economic dependencies. National economies can benefit from their exploitation of benefits from their supply of exports and their demand for imports. Descriptive statistics are used to present the standing of Brazil, in terms of its international economic integration, compared to that of emerging and advanced economies. The views of unrestricted trade with liberal exploitable economic dependencies and restricted trade in an economic interdependence with reciprocity and justice are discussed. Implications for Brazil and the global economy from Brazil’s international integration are derived.

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Vorheriges Kapitel Mercosur’s Trade Performance and the Brazilian Economy

A geographical diversification of bilateral relationships is an example of a measure of extensive international openness. This can be computed as the ratio between the number of actual partners and the total number of potential partners (the total number of countries in the world). A more precise measure of diversification as a measure of extensive international openness is the inverse of the Herfindahl concentration index, sometimes called the “number of equivalent partners”.

The trade-to-gross domestic product (GDP) ratio with a given country is one example of a measure of intensive international openness.

The international trade statistics of Mexico are significantly influenced by Mexico’s membership in North American Free Trade Agreement (NAFTA), the regional group of economic integration for the three countries of North America, Canada, the United States, and Mexico.

English Proficiency Index website.

See: Elstrodt Heinz-Peter et al. (2014), Connecting Brazil to the world: A path to inclusive growth, The McKinsey Global Institute (May). There is extensive literature on the relationship between competitiveness, trade openness, and productivity. See, for example, Richard E. Baldwin, On the growth effects of import competition, National Bureau of Economic Research working paper number 4045, April 1992; Philippa Dee et al., The impact of trade liberalization on jobs and growth, OECD trade policy working paper number 107, January 2011; and Otaviano Canuto, Matheus Cavallari, and Jose Guilherme Reis, Brazilian exports: Climbing down a competitiveness cliff, World Bank policy research working paper number 6302, January 2013.

Three branches of “dependency theory” can be identified in the economics literature. The debates among the liberal reformers [inspired by Prebisch (1950 and (1959)], the Marxists [Andre Gunder Frank)], and the world systems theorists [Wallerstein (1974)].

See: Prebisch Raúl (1950) and (1959).

This summary of the Dependency Theory is based on Ferraro (2008).

Exploitable dependency relies upon a belief that there exists a clear “national” economic interest which can and should be articulated for each country. This national interest can only be satisfied by addressing the needs of the poor within a society rather than through the satisfaction of corporate or governmental needs. Trying to determine what is “best” for the poor is a difficult analytical problem over the long run. Dependency theorists have not yet articulated an operational definition of the national economic interest.

Low per-capita income in developing countries reduces the domestic market for domestic production of industrial goods, and low investment in human capital reduces labor productivity and international competitiveness of domestic production. As a result, the ability of a developing country to create jobs for its own labor force and create a market for its own domestic industrial production curtails its economic power in international trade negotiations.

The disparity in the distribution of economic benefits from an exploitable dependency among trade-partner countries is not only a result of capitalism, as the dominant economic system in the world economic order, as the Marxian views of Frank (1967) and (1967 [1969]) advocate but also a result of “captured” governments of developing countries by their elites.

New York Daily Intelligencer, July 2, 2018, http://nymag.com/daily/intelligencer/2018/07/trumps-u-s-fart-act-would-pull-america-out-of-the-wto-united-states-fair-and-reciprocal-tariff-act.html

See President’s statement at: https://www.whitehouse.gov/briefings-statements/statement-president-regarding-trade-china-2/

See Bob Bryan (2018), “It’s On: Trump’s trade war kicks off with tariffs on $34 billion worth of Chinese goods”, Business Insider, July 6. http://www.businessinsider.com/trump-china-trade-war-tariffs-go-into-effect-soybeans-tech-2018-7

Observations on this section are based on Cervo 2010.

Cervo Luiz Amado 2010. A ascensao do Brasil no cenario internacional: o Brasil e o mundo (Brazil’s Rise on the International Scene: Brazil and the World). Revista Brasileira de Politica Internacional 53 (special edition): 7–32.

This hypothesis should consider the fact that part of their trade with Brazil takes place within the group of the Mercosur countries while Mexico is bordering the US and is a member of NAFTA.

See: https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/digital-globalization-the-new-era-of-global-flows

See: http://rodrik.typepad.com/ is global equality the enemy of national equality. Pdf

See: http://www.mckinsey.com/global-themes/employment-and-growth, poorer-than-their-parents-a-new-perspective-on-income-inequality.

See: http:/www.hup.harvard.edu/catalog.php?.isbn=9780674737136

See: https://www.weforum.org/agenda/2017/02/why-globalization-isnt-it-in-retreat-its-gone-digital

See: http://www.dhl.com/content/dam/downloads/g0/about_us/logistics_insights_2016/dhl_gci_2016_full_study.pdf

For representative empirical trade literature on the effects of international economic integration on inequality see: Feenstra and Hanson (1996); Borjas et al. (1997); Broda and Romalis (2008); Krugman (2008); Goldberg and Pavcnik (2007). For representative literature on the effects of international financial flows on growth and volatility, see: Prasad and others (2007) and Kose and others (2009). For the effects of financial globalization on inequality, see: Roine et al. (2008); Claessens and Perotti (2007); and Demirgüç-Kunt and Levine (2007).

For a comprehensive review of the empirical literature testing Kuznets’ hypothesis, see Fields (2001)

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Titel: Global Implications of International Integration of the Brazilian Economy
verfasst von: Elias C. Grivoyannis
Verlag: Palgrave Macmillan US
Buch: International Integration of the Brazilian Economy
Print ISBN: 978-1-137-46295-4

Electronic ISBN: 978-1-137-46260-2

Copyright-Jahr: 2019
DOI: https://doi.org/10.1057/978-1-137-46260-2_13

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