Question

Discuss how countries end up with their import/ export structure and how they detected their comparative advantage; mention how Brazil's terms of trade changed over time.

Answer 1

In the present world of globalization we find internarional trade prevalent in almost every corner of the world . Countries engage in import and export of goods and services with each other . Now the import export structure of a country develops on the basis of opportunity costs and relative abundancy of factor of production . Comparative advantage is detected on the basis of opportunity costs . The lesser time and lesser resources a country takes with respect to another makes it the exporter of that good and importer of the other .

Brazil's TOT changed after the decentralized and open economy policies adopted by the country . The country is an active user of contingency methods , like anti-dumping , has been enhanced by intellectual property rights , exercised tariff measures in the past . Liberalization in financial and service sector , changed TOT drastically . Brazil had trade relations with Canada . Now not only crude oil and coffee beans but Brazil is also an exporter of aircraft , chemicals, semi manufactured goods .