The impact of trade liberalization on economic growth in MERCOSUR countries

Abstract

This study intends to evaluate the impact of trade liberalisation on economic growth; import tariff is used as a proxy for underlying liberalisation. An empirical analysis was conducted on the Mercosur countries all of which, five years after their accession to the WTO, were demonstrating a consistent tendency towards liberalisation, agricultural and food trade both included, over almost ten years. The time period is seven consecutive years, from 2001 to 2007. Panel data regression models are used; a number of control variables are also included. The study concludes that there is a slight positive impact of liberalisation on growth, no matter the model being used.