Regional Integration and Labor Content of Brazilian External Trade

Brazil is currently negotiating several free trade agreements, being certainly the FTAA and the Mercosur-EU FTA the most important. The main objective of the present work is to estimate the impact of these agreements on the employment in Brazil, according to the workers' degree of qualification. We calculate then the present labour content of exports and imports and apply afterwards the exports and imports growth rates for each scenario. Calculations show that Brazil is a net labour exporter, mainly of less qualified work. Because of the differences in the bilateral trade composition, for the European Union (EU), Brazil is a less qualified work exporter and a more qualified work importer. With the United States of America, the imbalance between work content of exports and imports is weaker. The simulations show that the realization of the three scenarios - Mercosur-EU, FTAA and the simultaneous accomplishment of the two agreements - would generate 3.1 million jobs. The FTAA would generate 15 thousand jobs more than the Mercosur-EU agreement and 11 thousand beyond the job generated in the third scenario. In all cases, the more benefited work category would be the less qualified one, being the FTAA the best option for the most qualified work categories