_<u>Table 10: Effects on imports, exports and real GDP due to combined or partial shock (Indices, BaU = 100 in 2015)</u>_

||D|emand si|de|S|upplysi|de|"|Welfare|"|
|---|---|---|---|---|---|---|---|---|---|
||Imp|ort Volu|mes|Exp|ort Volu|mes|R|eal GD|P|
||Full<br>Liber.|Deep<br>Doha|Weak<br>Doha|Full<br>Liber.|Deep<br>Doha|Weak<br>Doha|Full<br>Liber.|Deep<br>Doha|Weak<br>Doha|
|Combined (Own +<br>|Rest of<br>|the Wor|ld libera|lization)|shock -|-- BaU =|100|||
|Agri|105.7|98.3|99.1|122.4|100.7|100.2|102.9|100.0|99.9|
|Non-Agri|121.3|103.3|102.7|121.0|102.7|102.0|100.1|100.0|100.0|
|Economywide|120.8|103.1|102.5|121.2|102.5|101.8|100.2|100.0|100.0|
|Own shock --- Ba|U = 100|||||||||
|Agri|107.3|98.9|99.8|114.5|100.8|100.2|102.0|100.2|100.0|
|Non-Agri|113.1|100.8|100.2|116.6|101.0|100.3|100.2|100.0|100.0|
|Economywide|112.9|100.8|100.2|116.4|101.0|100.3|100.3|100.0|100.0|
|Rest of the World|shock --|- BaU =|100|||||||
|Agri|96.8|99.4|99.4|107.1|99.9|99.9|101.0|99.8|99.8|
|Non-Agri|107.5|102.4|102.4|104.2|101.7|101.7|99.9|100.0|100.0|
|Economywide|107.1|102.3|102.3|104.4|101.5|101.6|100.0|100.0|100.0|

Note: For each variable, these indices are calculated as the ratio of the level in the trade scenarios to that of the BaU scenario for the last year (2015) and multiplied by 100. Source: Authors’ calculations.

For three key variables, Table 10 shows the effects of the total and partial shocks as indices calculated on the levels reached in the final year, with the final year for the BaU equal to 100. In the case of the full liberalization scenario and across all variables, own liberalization accounts for a large share of the total shock. Imports in agriculture actually increase more in the partial own liberalization shock than in the combined shock, given that the external shock drives international agricultural prices up. The reduction of the mentioned anti-(agriculture-)export bias implicit in the initial protection, is also explaining the large share of export and real GDP effects accounted by the own liberalization shock.

Decomposition results for the Doha scenarios are less clear cut. The magnitudes of the shocks are much smaller, however even the very low levels of domestic tariff abatement seem to matter for the final result. A relevant policy lesson emerges from the comparison of the two partial shocks panels of Table 10: a passive non reciprocating attitude may bring some advantages; however these are quite limited, even in the extreme case where every one in the world but Brazil implements full liberalization. In fact, these externallyinduced benefits may be greatly enhanced by an active domestic liberalization reform.

For their poverty and income distribution implications, changes in factors’ markets are the most important aspect of the structural adjustment caused by trade reform. Changes in wages and sectoral employment are linked to changes of goods prices through the production technology and the functioning of the factor markets. Different production technologies are approximated by different factor’s intensities across sectors, as shown in Table 4, and labor markets function so as to mimic realistic adjustment possibilities: 40