Impacts of U.S. agricultural subsidies in expansion of Brazilian agribusiness

Abstract

In the forums of multilateral negotiations of the World Trade Organization (WTO) there has been a strong debate which tries to eliminate the agricultural subventions in the developed countries. However, the United States has increased the amount of these subsidies causing distortions in the world agricultural trade. Therefore, the purpose of this research has been to evaluate these American subsidies impacts (Loan Deficiency Payments) given between 2002 and 2007 upon the Brazilian agribusiness growth. The findings allow to deduce that the reduction of the subsidies in the United States might promote the growth of the Brazilian agribusiness production and might produce trade surplus in the trade balance in this sector as well as the growth of both exports and imports. Hence the cuts in these subsidies would contribute to a bigger competitiveness of the Brazilian exports and would generate opportunities to the agribusiness growth.