Deforestation, Trade Liberalization, and Environmental Politics in the Brazilian Amazon: 1990-2022

This paper explores the relationship between trade liberalization and deforestation in the Brazilian Amazon from the beginnings of widespread trade liberalization in the 1990s to 2022. This paper, through an analysis of deforestation from soy and beef production, concludes that trade openness and foreign direct investment (FDI) alone cannot fully explain the rapid environmental degradation occurring in the Brazilian Amazon. Despite Brazil’s efforts to integrate into global markets, the levels of trade and FDI are relatively low. Instead, the policies of Brazil’s government play a decisive role in shaping deforestation trends. The contrasting presidencies of Luiz Inácio Lula da Silva and Jair Bolsonaro illustrate the significant impact of political leadership on environmental outcomes. Under Lula, pro-environmental policies led to a 70% reduction in deforestation while Bolsonaro’s pro-business and anti-environmental policies led to a resurgence in deforestation. I ultimately argue that while globalization and subsequent trade liberalization contribute to deforestation, the environmental policies of the ruling president are a more significant driver of deforestation.