MERCOSUR DEVELOPMENT: AN ASSESSMENT OF TRADE FLOWS

This paper search to analyze the effects of the formation of Mercosur Preferential Trade Agreement trade flows of member countries in the 1994-2009 period, using an extended gravity model that includes dummy variables for Mercosur, for UE and NAFTA (importants economic blocs), for the sectors of the economy and member country. The results show that Mercosur obtained the largest increases in trade among all regional integration schemes relevant to member countries, which highlights its importance for the members. When considering the analysis of the sectors, only agriculture had significant value, showing that the products were still predominant in this sector in the export of the Mercosur countries to all countries in the sample both in 1994, as in 2009.