Potential impacts of the MERCOSUR-EU Agreement in Brazil and Argentina automotive value chains
Abstract
This paper studies the potential effects of the Mercosur-EU agreement for the automotive value chain in Argentina and Brazil, identifying the potential trade balance movements of each partner. Its main results indicate that the EU will improve its trade balance in most automotive and auto parts products. In addition to the differences in international competitiveness, other factors encourage these results, such as differences in production scale between partners, greater tariff preferences granted by Mercosur, greater potential demand for vehicles in Argentina and Brazil than in the EU, higher requirements in the EU market in terms of regulations on product and process quality, among others.
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