Latin American Trade and Development in the New International Economy
Little is the same in the international economy since the 1980s. New patterns of investment, production, and trade (i.e., "globalization") present fundamental challenges to governments, firms, and social actors across the board. New forms of governance in the international political economy create new opportunities but also place constraints on what sorts of policies are feasible. Countries that are members of the World Trade Organization (WTO), for example, accept multilateral disciplines on a broad range of economic policies, from how they set and adjust levels of tariffs and subsidies, to how they regulate the entry and operations of foreign investors, to how they go about granting and protecting intellectual property.
Yet globalization and the increased scope of multilateral governance have been accompanied by trends toward regionalization as well. [End Page 210] Throughout the world, we see more firms participating in global markets and more countries participating in global institutions, and we also see more countries pursuing regional arrangements. Regionalism, Ventura-Dias suggests in the introduction to her co-edited volume, is a coping strategy in a world that features more complex and intrusive forms of global economic governance: regional negotiations promise policymakers greater control over the "pace, sequence, and direction" of economic policy (12).
The countries of Latin America and the Caribbean (LAC) evince little deviation from these trends. Virtually every country in the region has adopted "export-oriented" trade and "open" investment regimes and virtually every country is a member of the WTO. At the same time, the region has experienced a spike in bilateral and plurilateral trade and investment agreements. While Latin America has always featured a dense network of regional agreement initiatives, the most salient aspect of the new regionalism in the Americas is the inclusion of the United States (and Canada). Mexico signed the North American Free Trade Agreement (NAFTA) in the early 1990s, and Chile completed a similar agreement with the United States in 2002. More recently, the United States has concluded (or is in the process of negotiating at the time of writing) agreements with the five countries of Central America and the Dominican Republic (DR-CAFTA); Panama; and Colombia, Ecuador, and Peru. And, of course, since 1994 negotiations have continued for the Free Trade Agreement of the Americas (FTAA), a hemispheric agreement including all thirty-four countries in the region (except Cuba).
The broad changes in the global economy and, importantly, the LAC countries' position in and reaction to such changes are the subject of these four books. Globalization and Development emphasizes three fundamental asymmetries that mark the contemporary global economy, and any analysis of international development needs to take these issues seriously. First, our attention is drawn to the realm of credit and finance: the international political economy generates asymmetric vulnerabilities to pressures for pro-cyclical fiscal and monetary policy. Although private capital inflows tend to be pro-cyclical in all countries (i.e., capital is most available and accessible when economies are in good shape), in the developing world outflows demonstrate strong pro-cyclical tendencies as well (i.e., capital becomes hardest to access when it is most needed). Of course...
