Measuring Shifts in Brazil’s Trade Using International Input-Output Tables

Author(s)

Jeffrey Horowitz, David Riker

In this paper, we use information from the World Input-Output Database (WIOD) and a method for decomposing the value-added contributions of each country in international trade flows to measure shifts in Brazil’s exports between 1995 and 2009. The database allows us to separate gross trade flows into intermediate and final products and to trace Brazil’s value added to the country of final use. Over the fifteen year period covered by WIOD, there was a shift in Brazil’s exports of intermediate and final goods away from services and other manufactured products toward greater specialization in the country’s traditional areas of comparative advantage, agricultural and mineral products. There was also a shift in Brazil’s exports toward East Asia and developing countries and away from the European Union and the United States. However, the redirection of Brazil’s exports to East Asia does not reflect a significant shift in the ultimate destination of Brazil’s value added from its traditional markets. According to our calculations of trade in value added, Brazil’s exports of intermediate goods and services to East Asia have been increasingly incorporated into East Asia’s exports to the United States and the European Union.