Latin American Politics & Society 48.2 (2006) 171-180
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Trade Liberalization and Economic Integration in the Americas:
Causes and Consequences
Ninety-seven percent of economists in U.S. academic institutions favor free trade (Prasch 1996). At the same time, many in the neoclassical camp believe that governments will be reluctant to embrace trade liberalization because of the existence of a small but powerful coalition of domestic interest groups that depend on protection for the maintenance of their rents. Why, then, does trade liberalization take place? Does it always contribute to economic growth and sustainable development? While neoclassical economists usually answer these questions (particularly the second one) through cross-country econometric analyses that use dubious proxy variables for trade liberalization (Rodríguez and Rodrik 2001), other social scientists prefer to pursue case studies of particular countries, regions, and economic sectors. The five books reviewed in this essay constitute a rich and varied representation of this methodology and shed much light on the causes and consequences of trade liberalization and economic integration in the Americas. [End Page 171]
Why Trade Liberalization Takes Place
After decades of protectionism and a state-led development model, trade liberalization has extended throughout Latin America since the 1980s through unilateral measures and regional and multilateral agreements. How was this shift possible? Was it the result of external pressures or of domestic preferences? The books by Sara Schoonmaker and Michael Lusztig give apparently opposite answers.
Schoonmaker approaches the question from a multidisciplinary perspective that combines a political-economic interpretation of neoliberal globalization (particularly trade liberalization and foreign investment deregulation) with discourse analysis. The main argument of her book is that struggle over discourse plays a central role in the process of neoliberal globalization, and that the U.S. government and international organizations have occupied a rather influential position in this struggle.
Concentrating in the Brazilian telecommunication and informatics industries, Schoonmaker analyzes consecutive episodes of conflict between the Brazilian and U.S. governments over the definition of the optimum policy for the development of these sectors. While the Brazilian government initially adopted a domestic-centered promotion of telecommunications and informatics, the United States used neoclassical arguments in favor of unconstrained market allocation to push for free trade.
The first conflict between Brazil and the United States took place during the 1970s over access to the telecommunication network in developing countries. When technological innovations in the telecommunication sector (including digitalization and the integration of telecommunications and computers) allowed for the transmission of data between computers in different countries, telecommunication policy became particularly important for production and trade. Developing countries, which until then had controlled the network and implemented independent telecommunication policies, began receiving pressure from the U.S. government and transnational corporations (TNCs); both insisted on the importance of unrestricted access to the network in order to increase the productivity and efficiency of global production and trade.
During the late 1970s, the struggle slowly moved toward the regulation of the flow of digital data across countries. Developing countries understood the importance of controlling these flows to reduce information dependency and benefit from the development potential of informatics and telecommunication. Brazil was particularly...