Methodology and Expected Results

The Brazilian private sector and South-South relations

In the first decade of this century, Brazil launched a new phase in its trade policy, this time prioritizing the South-South relations. This change came about not only in the context of a change in the governing political coalition but also as a result of the difficulties of North-South integration and multilateral trade relations.

Many studies have been, and continue to be, dedicated to understanding the magnitude and drivers of the redirection of Brazilian trade diplomacy in the transition from a center-right to a center-left government. However, these studies focus primarily on the government’s positions and preferences in the field of trade diplomacy.

There have been fewer studies devoted to understanding how the position of the Brazilian commercial sector evolved in response to this paradigm shift in trade policy. In general terms, the objective is to understand how the position of the Brazilian business community changed in light of the government’s prioritizing South-South relations.

Prior to the South-South paradigm, the relationship between the government and the private sector was marked by two stages in the area of trade diplomacy. The first phase was the period of convergence around the model of import substitution through the early 1990s.

The second phase was marked by a period of polarization. In this phase, a segment of the business community, particularly exporters of agricultural products and commodities, defended the government’s need to prioritize dynamic centers of the international economy, such as Europe and United States. Another segment, representing import-sensitive sectors, advocated a combination of protectionism and integration with developing countries, as was the case with South American integration.

There are no studies specifically aimed at understanding how the perceptions of Brazilian society have evolved under this new paradigm marked by the dynamism of South-South relations and the new role of emerging powers in global governance.

Methodology to map the positions of the business community and structure of the system

Mapping the perceptions of the Brazilian private sector will be achieved mainly through a survey directed specifically at the business community and focused primarily on Brazilian trade diplomacy. The survey will have three basic axes of segmentation: sector, region, and size.

Sub-line 1

This sub-line involves interviewing 200 businesspeople according to the distribution described above. For reasons of cost, the research will be limited to the state of São Paulo (both the capital region and other parts of the state). The state’s economic diversity allows the position of its business community to serve as a proxy for the position of the business community across other regions of the country. In other words, in São Paulo state one can find representatives of the three macro-sectors of the economy (services, agriculture, and industry) in firms in different stages of economic activity. The sample will be drawn from the databases of SEBRAE and IBGE. The research will be done through face-to-face interviews administered by a company contracted for this purpose.

This line of research will be complemented by experimental studies applied to trade policy. A first experiment related to views toward Brazil’s trading partners will seek to discover the extent to which ideological factors may influence these views. The studies will be carried out through the use of a questionnaire. The weighted effect of ideological factors will be detected by means of framing, a method already widely used in research centers abroad. This study will be developed through a partnership between the NAP and researchers at North Carolina State University (NCSU).

The NCSU researchers, affiliated with the NAP as contributors, have already volunteered to contribute to the methodological development of the research. The maturation of the methodological framework of this line of research will be the first stage of the NAP’s work. Besides complementing other dimensions of the research – in particular, the determinants of the business community’s positions – the introduction of these experimental studies is intended to establish competence within the Center in state-of-the-art techniques extensively used abroad for political science and international relations research.

Sub-line 2

Each negotiation is taken as an analysis unit throughout the entire study. The first stage of the project, specifically for the first six months, will be devoted to structuring the entire monitoring system and improving the methodological aspects of the research.

There will be a functional division of the teams, which, as shall be seen, will have a multidisciplinary structure, mainly composed of experts in international economics, political scientists, and experts in international relations. Essentially, the teams will be divided into two main groups: one to qualitatively monitor international negotiations and another to perform quantitative analysis, particularly the equilibrium models chosen as the most essential for each of the negotiations incorporated into the tracking system.

The qualitative and quantitative analyses will be integrated into an online information and consultation system. The structure of this system will dramatically reduce the need for on-site meetings of the research team and will even allow collaboration with a team of international consultants, similar to what occurs with the Global Trade Analysis Project.[1]

The flow of the monitoring system will be as follows: 1. Selection of the negotiations most relevant to Brazil (those in which the country is involved, those with an indirect impact on Brazilian foreign trade, or those that serve as reference points for analysis) → 2. Organization of the stages of negotiations (information base) → 3. Qualitative analyses (risks and prospects for Brazilian foreign trade) → 4. Selection of cases for quantitative analysis → 5. Case selection and application of computable general equilibrium models → 6. Inputting data and publishing the database online for consultation (see annex III).

Tasks will be distributed between the teams as follows:

Qualitative analysis team

  • Selecting negotiation cases that will be incorporated into the system and subject to systematic monitoring. These cases will be identified based on analysis of secondary material and consultation with experts on international trade agreements who are capable of identifying negotiations with the greatest potential to impact Brazilian foreign trade.
  • Systematizing the stages of the negotiations and entering periodic updates in the system at key moments in the negotiation processes. This monitoring system will be continuously updated; follow-up monitoring will be undertaken even after the conclusion of the agreement (see the model of the system’s logic structure in the appendix of this proposal).
  • Monitoring the positions and interests of the legislatures of the principal countries involved in specific negotiations.
  • Analyzing cases of ongoing negotiations through qualitative reports. These reports will be of two types. The first type will follow a standardized model and contain a statement of the main risks and potential benefits for Brazilian foreign trade as a whole or for specific sectors. The second type will be free-form to allow for specific analyses also relevant to Brazilian foreign trade.
  • Analyzing strategies used to catalyze negotiations and overcome impasses, especially approaches considered innovative. An example of an innovative strategy for overcoming impasses would be the “critical mass” model put forward during WTO negotiations.
  • Studying international coalitions formed during the negotiating process. A database with participating countries and their negotiating positions would be created specifically for this purpose (see the example of this database’s structure in the proposal’s appendix).
  • Studying innovative tools created by agreement to promote international trade not only directly but also through the areas of tax, international investment, and international competitiveness.
  • Analyzing examples of models of inter-institutional coordination adopted by participating countries in preparation for negotiations. The choice of countries that will be subject to qualitative studies will also be the prerogative of the qualitative analysis team.

Quantitative analysis team

  • Collecting, systematizing, and analyzing relevant data concerning the negotiation in question and data relating to trade, foreign direct and indirect investment, tariff and non-tariff barriers, etc.
  • Organizing and managing the database to be used for monitoring international negotiations.
  • Quantitatively simulating the impacts of negotiations using the computable general equilibrium model according to the methodology employed by the Global Trade Analysis Project (GTAP) coordinated by the Center for Global Trade Analysis at Purdue University’s Department of Agricultural Economics.
  • Developing experimental studies on trade policy from a comparative perspective. Methodology to be developed in partnership with NCSU.

Project timeline

 

Year 1

Year 2

Year 3

1 2 3 1 2 3 1 2 3 1 2 3
Examination of methodological literature x x
Development of the relational database  x  x
Qualitative analysis model development and survey administration x x x x
Qualitative analyses x x x x x x x x x x
Training for GTAP data management x x x x
Quantitative simulations x x x x x x x x x x
Intermediate workshop x
Survey on innovative approaches to trade policy x x x x x x x x x x
Survey on innovation strategies for international negotiations x x x x x x x x x x
Integration of the query system x x x x x x
Final workshop

 

Expected output

- Creation of a system to monitor South-South relations (South-South Observatory) to be accessed online. Focus on IBSA but other emerging economies may also be included.

- Four books related to the South-South theme and articles in scientific journals on the same theme.

- Opinion survey of the private sector. Database available to researchers from other institutions.

- Two international seminars on Brazil and South-South relations.

- Exchange of researchers between Caeni and NCSU.



[1] Information about GTAP: https://www.gtap.agecon.purdue.edu/

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