Essay on Brazil: Embracing Globalization?

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BRAZIL: EMBRACING GLOBALIZATION?
Background
This case focuses on Brazil's development strategy since World War II and on the change of the economic model following the debt crisis of the 1980s. At the time of the case Brazilian officials are deciding whether regional integration or globalization offer the best route to economic prosperity and development. This case illustrates the challenges that developing countries face in defining trade policy. It also introduces the role of regional trade blocks as an alternative to globalization. At the current time regionalism seems to be very much in vogue and seems to be much more likely to be the basis for future trade system changes than comprehensive trade treaties.
Brazil's Import
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One way to meet these goals was to use WTO forum to fight against practices that damaged Brazilian interests. Due to the failure of WTO's 1999 Seattle Conference, Brazil's hopes were dimmed. Brazil could try to negotiate bilaterally with the US and Europe or it could use the alternative of strengthening the Mercosur union. Brazil went on Mercosur way negotiating with Argentina to diminish traditional geopolitical rivalries, to weaken respective military establishments, and to consolidate the emerging democracies.
Mercosur project is called the common market of South America. It is a trading zone, regional integration, between Brazil, Argentina, Uruguay, and Paraguay, founded in 1991 by the Treaty of Asunción, which was later, amended and updated by the 1994 Treaty of Ouro Preto. Its purpose is to promote free trade and the fluid movement of goods, people, and currency among member states. Mercosur was seen as giving the capability to combine resources to balance the activities of other global economic powers such as the United States and the European Union. By January 1, 1995, 90% of the intra-regional trade circulated free of tariffs and quotas. The member countries adopted a common external tariff (CET) and quotas with nonmember countries. After the creation of Mercosur, trade among the member countries increased rapidly despite the differences in the member countries, making
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