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Argentina has benefited greatly from the increase in prices of agricultural commodities. With a large share of its population with low and medium-low incomes, however, a sizable part of households is likely to be adversely affected by the accompanying rise in the price of the consumption basket. An ex-ante analysis suggests that this is the case. Changes through a less obvious channel (i.e. in factor incomes) are likely to be more beneficial to middle-income households. In general, all households experience losses, with poorer households being the most affected. When accounting for transfers financed through the collection of export taxes, poorer households benefit. In the absence of compensatory measures, increases in the prices of agricultural commodities could potentially have an important impact in terms of indigence and poverty.

This paper empirically explores whether trade preferences can be used as a substitute for industrial policy and help countries achieve their industrialization objectives at the expense of other regional members. Results show that Mercado Común del Sur (MERCOSUR) preferences obtained by Brazilian exporters have led to an increase in exports of relatively sophisticated products in which Brazil does not enjoy a global comparative advantage. On the contrary, smaller members of MERCOSUR export to the region products in which they have strong comparative advantages and with relatively low levels of sophistication. This suggests that MERCOSUR has helped Brazil achieve its industrialization objectives, but has not contributed to the industrialization of its smaller members.

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