NAFTA and the loss of U.S. market share by Brazil, 1992-2001

This article quantifies Brazil’s loss of U.S. market share to Mexico between 1992 and 2001 as a result of the entry into force of the North American Free Trade Agreement (NAFTA). An expanded version of the constant market share model was used to calculate gains and losses in the competitiveness of Brazilian exports to the United States, by product and by competitor, for subperiods between 1992 and 2001. The model showed Mexico to be the country to which Brazil lost the most market share in the United States between 1992 and 1996. Exchange rate variations and preferential tariff treatment for Mexico on the U.S. market were equally important in Brazil’s loss of export competitiveness to Mexico.