Does Trade Liberalization Always Decrease Union Bargaining Power?

The theoretical and empirical literature shows that union wages are more responsive to international import competition than nonunion wages, thus, reducing unions bargaining power. In this paper, we track the influence of unions on wages in Brazil before and after the trade liberalization in the beginning of the 1990s. We find that union bargaining power increased rather than decreased after economic openness. Our results seem to be related to the bargaining framework prevailing in the Brazilian labor market