American Free Trade Association Research Articles

Regional Integration in Latin America: States, Markets and Organizations

This paper is based on the research related to regional integration attempts in Latin America and their effect on the economic development of Latin American countries. Recent analyses clarify that the US’ intervention in the politics of Latin America has been the main obstacle of the regional integration process. Most importantly, political fragmentation of the countries in the region affects the success of the organizations that are formed for the regional integration. This is especially visible in the political processes of the countries such as economic crises in Argentina, political instability in Venezuela and increasing migration to the US from Latin American countries. Notable studies reveal that despite the regional integration efforts, the economic benefits to the region has been limited compared to the benefit of the global economic powers. Different from the current literature, this paper focuses on the internal dynamics of Latin American countries. In this respect, this paper investigates the effect of the regional integration attempts for the economic development of the countries in Latin America. In this regard, the rational state behaviour was found as an important element to explain in relation to the Latin American integration attempts. With a liberal intergovernmentalist perspective, this paper aims to reveal the success of regional integration attempts in Latin America with the cases of Latin American Free Trade Association (LAFTA), Southern Common Market (MERCOSUR) and Andean Community (CAN). The main argument of this paper is that increasing economic cooperation and creating a reconstruction model with a financial assistance to the less developed countries in the region have led to a regional economic development in cohesion with the policies of the regional powers of Latin America.

Evolution of Mercosur intra-regional trade from 2016 to 2020

The first attempts at the Latin American integration process showed a highly pragmatic character, without many concerns for medium and long-term projects. The main concern was to expand intra and extra-regional trade. However, since the 1980s (the decade considered the lost decade for Latin America), when the external debt crises and the adjustment policies recommended by the International Monetary Fund (IMF) led the region to a higher poverty rate due to the social costs of such policies, Latin America has been rethinking its integration. The creation of LAIA (Latin American Integration Association), in 1980, replacing LAFTA (Latin American Free Trade Association), in 1960, and its sub-regional integration have changed Latin America’s economic growth trajectory from the 1990s. Within the scope of LAIA, Mercosur was created in 1991, with the objective of promoting intra and extra-regional trade expansion through the elimination of tariff barriers among its members, implementing a Common External Tariff. The full members of Mercosur are Argentina, Brazil, Paraguay and Uruguay. The bloc also has associated members: Bolivia, Chile, Peru, Colombia, Ecuador, Guyana and Suriname and observer members, namely Mexico and New Zealand. This work was developed to verify whether Mercosur, with the elimination of tariff barriers between full members and the Common External Tariff, has been able to meet its main objective, which is to expand intraregional trade among its members. Therefore, the main objective was to verify whether there was trade expansion between the bloc's full partners between the years 2016 and 2020. The methodologies used for this purpose were descriptive statistics and literature review. Aiming to evaluate the annualized rate of change of trade in the period covered, it was decided to use the Compound Annual Growth Rate (CAGR), which is a differential of this research. The results showed that within the bloc, Brazil had Argentina as its main trading partner. It was observed that there was an expansion of intraregional trade between 2016 and 2018, followed by a considerable reduction of this trade during the period 2019-2020, but that Brazil still continued to be the member that obtained the largest intra-regional trade balances. Paraguay, in turn, did not show the same trend of commercial reduction for all other partners in 2019 and 2020. In addition, in 2020, even with the COVID 19 pandemic, Paraguay managed to increase its exports to Brazil and Argentina, showing a contrary trend only to their exports to Uruguay. Uruguay, in turn, expanded its imports from partners throughout the period, except for Paraguay in 2020, where its exports exceeded imports. With regard to Argentina, its exports to members began to fall in 2019 and increased in 2020, especially in relation to Brazil. The country also drastically reduced its imports from Brazil and Paraguay in 2019 and 2020, although it also considerably expanded imports from Paraguay

What Is Economic Globalization Without Trans-boundary Migration?

The world is often regarded as a global village or borderless globe where various countries freely interconnect and interrelate towards achieving a global goal. Globalization has occasioned international cooperation amongst States through the formation of several treaties and international organizations with economic objectives. This article evaluates the law and attitude of States and International organizations towards economically motivated trans-boundary migration. Particular reference is made to World Trade Organization(WTO), European Union(EU), African Union (AU), Economic Community of West African States (ECOWAS) and North American Free Trade Association(NAFTA). Findings reveal that the legal and institutional frameworks in support of trans-boundary economic migration are very weak, thereby allowing States’ interest to prevail over the globalization objectives. State practices are geared towards placement of several obstacles, such as imposing criminal sanctions, which limits trans-boundary economic migration. This prejudice is more obvious when the trade in service is a South-North movement of labour. These challenges have led to the irresistible conclusion that economic globalization is but a political fiction yet to take root in reality. It is further contended that, the puzzle of economic globalization cannot be completely fixed, except States fully embrace, accepte and liberalize the missing piece of trans-boundary migration. Globalization, Trans-boundary migration, Economic migration, South-North movement, Trade liberalization.

Foreign Trade of the European Union : Dominant Fluctuations

The article analyzes the most important changes that have taken place over the past five years in the dynamics and geographical structure of foreign trade relations of the European Union (EU) as the largest entity in the system of modern international commodity trade. It is shown that, despite such rather unfavorable external factors as the increase in general turbulence in world commodity trade, the expansion of the zone of protectionist and sanctions measures, trade conflicts, the EU was able to maintain its dominant position in international commodity exchange. At the same time, the European Union has pushed the main competitors, as the latest statistics show a significant decrease in the share of the North American free trade Association (NAFTA, consisting of the United States, Canada, Mexico) and Japan in international exports. Continuing to pursue a balanced foreign trade policy, the EU used its traditional instruments not only to increase its activity in general and outside the European region, but also to maintain a positive balance of foreign trade. In addition, there are hopes for the resumption of goodneighbourly trade relations between the European Union and the Russian Federation, which have been complicated in recent years by the introduction and extension of sanctions measures by the EU and Russia's response. The author presents new statistical materials, numerous calculated data, for the first time introduced into the domestic scientific circulation.

THE NORTH AMERICAN FREE TRADE ASSOCIATION (NAFTA) AND ITS ECONOMIC EFFECTS

The North American Free Trade Association (NAFTA) was founded in 1994 and includes the US, Canada and Mexico. Most of the tariff and non-tariff barriers were abolished after the agreement went into force. The Association has significantly contributed to deepening trade between member states and the growth of investments. NAFTA is an example of how the member states can benefit from free trade. Although NAFTA was established just 24 years ago, the benefits brought by it to the member countries are quite significant; in particular, gross domestic product (GDP) of the member countries increased, the GDP per capital increased, employment rate grew. NAFTA provides an example that free trade has and will have a future. According to various studies, since 1993 the number of the employed has grown by 40 million people. It should be noted that the U.S. export to Canada grew from 100 million USD in 1993 to 267 million USD in 2016 and to Mexico from 142 million USD to 498 million USD. The U.S. import from Canada amounted to 111 million USD in 1993 and 278 million USD in 2016; while import from Mexico grew from 151 million USD to 572 million USD. Every fourth job in Mexico depends on the export sector. The majority of economic analysis shows that NAFTA is beneficial for the economy of North America and the residents of the member countries; however, it damaged a number of sectors. In addition, it is argued that withdrawal from NAFTA and restoring trade barriers will negatively affect U.S. economy and expenses. However, Mexico will be much more affected as jobs will be reduced and economic growth will slow down both in short and long term perspectives. NAFTA has great support in the U.S. (as well as in Canada and Mexico). The survey by Gallup conducted in February 2017 showed that over 70% of Americans consider that NAFTA was good for America. Georgia has trade and economic (and not only) relations with NAFTA member countries, especially with its strategic partner US.

Un Órgano de Solución de Controversias para la ALADI

The Latin American Integration Association (ALADI) was created by means of the Montevideo Treaty of 1980. Its creation is due, on the one hand, to the failure of the project to create a Latin American common market through the Latin American Free Trade Association (ALALC), which had been created through the Treaty of Montevideo in 1960. From that perspective, the function of ALADI was the preservation of the "historic heritage" of LAFTA, which is nothing more than giving effect beyond the late LAFTA to the partial agreements of trade liberalization that had been reached in the multilateral and bilateral rounds within the framework of that organization.

Exploring the Causes for Change in Regional Third Party Dispute Settlement

AbstractWhat explains change in third party dispute settlement in regional international organizations (RIOs)? This paper confronts this question by exploring the extent to which different explanations of institutional change hold in the context of trade RIO third party dispute settlement. The paper considers the role of three variables in explaining dispute settlement reform: the balance of power, the level of trade interdependence between member states and the nature of the organization's founding contract. A truth table reveals that although power and trade interdependence can explain some cases of institutional reform, the nature of the organization's founding contract is the strongest predictor for change in dispute settlement. Nevertheless, the analysis shows that not all cases can be explained, and that the influence of other institutions on the same issue can also play an important role. A case study of the Latin American Free Trade Association illustrates the importance of the institutional environment in which the RIO operates for institutional reform.

Corporaciones públicas multinacionales para el desarrollo y la integración

Latin American integration, like any similar experience, must be accomplished both between spaces of vast aggregate dimension, and between a variety of national groups structured in socio-economic, institutional, political and cultural systems; all this as part of a general process in which the aspects and levels interact, interpret and condition each other. This work tries to draw a balance of integration through the Latin American Free Trade Association (LAFTA/ALALC), and proposes the formula of multinational public corporations as one of the agents of this process. These appear as one of the agents, instruments and mechanisms that can participate in a combined process of development and integration.

The Emergence of Industrial Relations in Regional Trade Blocks - A Comparative Analysis

This article analyses the emergence and institutionalization of regional industrial relations arrangements in six regional integration agreements (European Union, North American Free Trade Association, Mercado Común del Sur, Economic Community of West African States, Southern African Development Community, Association of Southeast Asian Nations). In each, the article investigates human and social rights, labour standards, residence and social security rights of migrants, regional union and employer organization, and provisions for social dialogue. The article tries to explain the comparative differences in emergent regional industrial relations by testing four competing hypotheses based on integration and institutional theories specified at the regional and national level.

The Evolution of NAFTA

Today, the world has indeed become more sharply demarcated in regional terms. The tendency for regionalism is evident both in developed as well as developing countries. The three distinct dimensions of regional space for the tendency to regionalism are: area (commonly known as territory); contiguity (parts are proximate to other or remote); and size (the extent of its scope). After the end of the Cold War phase in international politics, some very important developments took place, that is, ‘regionalism’. Regionalism has become an inescapable international political reality and an acceptable alternative to understand unilateral action and undependable United Nations (UN) intervention. Europe was merely a starting point for a further set of comparable experiments in integration. And, on the heels of European experience, there duly came attempts to create common markets and free trade associations in the Middle East, Africa, the Pacific and the Americas: the world was indeed filled in the 1960s with proposals for North American Free Trade Agreement (NAFTA), Pacific Free Trade Area (PAFTA), Latin American Free Trade Association (LAFTA) and even more. The NAFTA is the single example of a free trade area representing a group of two developed and one developing country. The NAFTA involves the creation of the world’s largest free trade agreement (FTA), with combined gross national product (GNP) of $6.3 trillion and a population of 363 million. The NAFTA, unlike other trade agreements, is not concerned exclusively with trade but also deals with environmental and labour standards. It is the first case of a developing country’s accession to this type of agreement with developed states on a fully reciprocal basis.

El papel del capital multinacional en los procesos de integración regional (ALALC y Mercosur)

En este artículo se analiza la función de la inversión extranjera directa en general, y del capital multinacional en particular, en el proceso de integración cristalizado en la Asociación Latinoamericana de Libre Comercio (alalc, 1960) y en el Mercado Común del Sur (Mercosur, 1991). Se revisan las posturas teóricas de mayor peso en materia de integración económica en el ámbito regional, tanto en la posguerra como en la actualidad, y se articulan con estadísticas sobre inversión extranjera directa y estrategias de las empresas multinacionales provistas por la onu, la cepal y la alalc para comprender la incidencia de los mecanismos que promueven las economías centrales en los espacios periféricos como América Latina.

Integración económica latinoamericana: Proceso ALALC/ALADI, 1950 – 2000, vol. 3

The last tome of Gustavo Magariños’s three volumes examines efforts to promote economic integration in Latin America. In this volume, Magariños amplifies his focus dramatically; whereas the prior studies were characterized by curt observations, his analyses in the third are expanded as he surveys the political and economic crises that hit the movement throughout the 1960s and 1970s. He discusses Cuba, the election of Salvador Allende, and the strains that these developments placed on the Latin American Free Trade Association (LAFTA), known as ALALC in Spanish. The author argues that the integration process ultimately failed due to lack of political will. He maintains that politicians disowned the integration movement from the very beginning by leaving it in the hands of technocrats responsible for negotiating trade concessions via industrial sectoral commissions. LAFTA thus died a slow death, officially expiring in 1980. During LAFTA’s existence, legislators and presidents (civilians or generals) were nowhere to be seen, a reflection of their ambivalence and hostility to the process.Economic integration was part of a larger public debate concerning economic growth, which became the victim of a rivalry between foreign or domestic commercial interests seeking to protect their internal markets, however limited, and those that favored broader regional development. Commercial interests eventually prevailed in the encounter because of their control of the sectoral commissions, which were tasked with determining tariffs concessions to be made by each national industry, such as automobiles, petrochemicals, electronics, and so on. As an example of this struggle, Magariños cites the duplicity of Eduardo Frei. While claiming commitment to LAFTA, Frei worked behind the scenes to create the rival Andean Community (AC) in 1968, which continued to serve officially as an organization within LAFTA. The AC’s objective was to protect domestic industry from foreign competition regardless of its point of origin. It soon became clear in this dual world of technocracies that the AC was the liege lord for member states. Globalization figures prominently in the post-1980 Latin American states as they sought to expand trade via bilateral agreements in the new Asociación Latinoamericana de Integración (ALADI), which took over from LAFTA. Significantly, ALADI invited Cuba to join the organization in 1980. Magariños argues that a major problem of LAFTA/ALADI was that a “strong element of regional autarky sought to strengthen resistance to a long period of dependency,” thus hindering integration by promoting import substitution against other Latin American states. Though Latin American states might balk at tariffs concessions with each other, they could only buy time. Eventually, international competition forced Latin American states to embrace integration as the raison d’être.This Spanish-language work requires the reader to have an above average command of the language due to the writer’s elegant literary manner. The book is well documented with extensive Spanish-language primary and secondary sources. The author is reluctant to deal with the personalities involved in the process; hence, we have little insight into the dynamics between individual negotiators. Adding this approach would have allowed the author and reader an opportunity to highlight the many complex issues in the integration process. This is not an oversight, as the author clearly believes it is the process and issues that merit consideration rather than individuals. This makes for a rather dry and tedious study. Nevertheless, Magariños’s book is indispensable for understanding the globalization process in Latin America. Readers will conclude that economic integration is too important to be left to technocrats and politicians. The author is to be commended for his important contribution to our understanding of a complex and often ignored process.

Two Halves of a Whole: Teaching International and Comparative Employment Law

While labour and employment law involves facets of both international and comparative law that are interesting and valuable, the best way to organize an advanced course for US law schools is to study both: Understanding of either is dependent on understanding both. The study of international labour and employment law at the level of the International Labour Organization (ILO) and regional international organizations such as the EU and the North American Free Trade Association (NAFTA) labour side accord take on real meaning and significance by showing their relationship with the national labour and employment laws of the major countries of the world. A unified international and comparative labour law course is an ideal way to develop and deepen the understanding that law students need to practice law in an ethical and professionally responsible way.

Asia/Pacific Regional Trade Agreements: An empirical study

At the same time as the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) have been encouraging trade liberalized, there has been a proliferation of Regional Trade Agreements (RTAs). These RTAs also aim to reduce trade barriers, but they do so it in a preferential way. There is continued debate as to whether such RTAs are an effective way of achieving free trade, or if increased trade among members causes less trade with non-member countries? If RTAs increase total trade, this is known as ‘trade creation’, whereas if the extra trade occurs at the expense of non-members, this is called ‘trade diversion’. Trade creation implies improved welfare, whereas ‘trade diversion’ may adversely affect welfare. This paper examines five different RTAs using a gravity model to see if they have been trade creating or trade diverting. Annual data from 26 countries covering five RTAs in the Asia and Pacific region for the years 1980–2000 was used. The results show that the effects of the different RTAs varied remarkably. The Association of South East Asian Nations (ASEAN) and the Australian and New Zealand Closer Economic Relations (CER) fostered greater trade with trading partners and with the rest of the world. While the Asian Pacific Economic Cooperation (APEC), the Southern Cone Common Market (MERCOSUR) and the North American Free Trade Association (NAFTA) tended to be trade diverting, that is, they expanded intra-bloc trade at the expense of trade with others.

Integración regional andina en salud

Despite their shared history, the Andean countries are socially and politically diverse, with heterogeneous health realities and complex integration processes. General developments such as the Latin American Free Trade Association and Latin American Integration Association have existed for decades, along with others of a regional scope, like the Andean Community of Nations, Caribbean Community, and Central American Common Market. The health field has a specific instrument in the Andean Region called the Hipólito Unánue Agreement, created in 1971. Integration processes have concentrated on economic aspects, based on preferential customs agreements that have led to an important long-term increase in trade. Less progress has been made in the field of health in terms of sharing national experiences, knowledge, and capabilities. Analysis of experiences in health has shown that integration depends on the countries' respective strengths and to a major extent on national political processes.

Managing US–Mexico “border health”: An organizational field approach

During World War II Mexican and US health professionals and organizations constructed a transnational organizational field to manage the border's public health problems. Despite barriers to inter-organizational cooperation, including disparate administrative structures and North–South stratification, the field's transnational approach to health on the border has continued for 60 years. Using archival data to track changes in the number and types of organizations, this article argues that the field practitioners call “border health” reconfigured during the North American Free Trade Association (NAFTA) decade from an era of loosely organized professionals to a specialized bureaucracies era. This change brought new vitality to border health, with transnational ties increasing and diversifying, but has not weakened entrenched cross-border inequalities. The organizational history of the US–Mexico border health field demonstrates how macro-politics and inter-organizational stratification shape transnational public health problems.

The Pearl River Delta and Hong Kong: an evolving cross-boundary region under “one country, two systems”

The complementary processes of globalization and regionalization have resulted in the proliferation of cross-boundary regions in the world since the 1980s. Existing studies have primarily concentrated at supranational paradigms or nation-based level of analysis in some specific regions, such as European Union (EU), North American Free Trade Association (NAFTA) and Association of Southeast Asian Nations (ASEAN), etc. This paper presents a salient sub-national cross-boundary region under “one country, two systems” in China, taking the Pearl River Delta (“the PRD” hereafter) and Hong Kong as a case. It argues that the PRD and Hong Kong have been evolving into a cross-boundary region, as a result of intensified socio-economic interaction between them over the past two decades. Previous studies have identified the role of Hong Kong as the largest source of foreign investment and entrêpot during the process of the dramatic economic development of the PRD in the 1980s and the mid-1990s. However, the changes of their relationship after Hong Kong returned to the Chinese sovereignty in 1997 are still poorly understood and analyzed. The paper attempts to update and fill the gap in the literature with the investigation of the transformation of the cross-boundary interaction between the PRD and Hong Kong in the post-1997 period. Particular attentions are paid to the paradigm shift and evolving patterns of the PRD-Hong Kong cross-boundary region under the unique framework of “one country, two systems”.

International protection of trade secrets when using the Internet

Protection and enforcement of trade secrets outside the USA have been minimal and undeveloped and of particular concern when using the Internet. Substantive and procedural laws vary from country to country. In recent years there has been a move toward harmonization under the North American Free Trade Association (NAFTA) and the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement under the General Agreement on Tariffs and Trade (GATT) 1994. However, the provisions of TRIPS allow for varying periods for member countries to come into compliance. In the meantime international protection of trade secrets is uncertain, thus necessitating the development and implementation of strategies for preserving trade secrets in the international business environment. This paper discusses those strategies, beginning with defining and identifying a company’s trade secrets and the formulation of various policy measures to be taken to protect trade secrets, with emphasis on the risks inherent in the loss of trade secrets when using the Internet and how to eliminate or reduce that risk.

Beyond Transnational Governance

REFERENCES TO WORLD GOVERNMENT have long been treated as utopian notions held by a few visionaries. This much-dismissed vision is re-examined here in light of the fact that self-determination based on national governments, to the extent that it existed a generation ago, is increasingly curtailed by transnational developments. Weapons of mass destruction (and the means to build them) are traded across national borders. Hate materials, drugs, guns, and child pornography banned in one country are readily accessed via the internet in others. Civil war in one country (for example, Yugoslavia) threatens others with massive immigration. Crime is increasingly organized across state lines and is on the rise.(1) Women and children are sold across borders into slavery for sex and forced labour.(2) A currency collapse in Russia, Thailand, or Indonesia rattles the world's financial markets. A computer virus set loose in the Philippines causes worldwide disruptions. Supranational corporations shift capital and jobs from one nation to another, circumventing national policies, regulations, and taxes. While these problems and others like them differ greatly from one another, they have one common denominator: the national institutions that are supposed to express people's preferences in these matters are increasingly ineffective in coping with them.This article takes for granted that the old functional approach is properly discredited, that the fact that there is a growing need for some different form for managing transnational problems does not mean that a new system will necessarily develop. Nor does it mean that world government is necessarily the only or the likely response, even if some new global architecture does arise. Rather, the discussion focuses on recent changes in global architecture, whether they might suffice to deal with the increase in transnational problems, and the different types of global architecture that could arise in response to the future escalation of these problems.INTERGOVERNMENTAL SYSTEM IS OVERLOADEDReference was made to the decreasing ability of national governments to cope with rising problems that are increasingly transnational in nature. The same holds true for the old international system, based on bi- or multilateral agreements by national governments and on international organizations composed of national governments, largely because the old system is not well suited for a high volume of significant governing activities.One major reason for the increasing inadequacy of the old international system is that it is largely an intergovernmental one that draws on formal procedures, relies on decision-making by representatives of national governments, and involves large numbers of actors. In this system, worldwide policies are formed - as is well known - through negotiations, via accredited diplomats or other national representatives, sometimes involving as many as two hundred nations. Diplomats must consult with and receive instructions from home-based authorities (the Department of State and the White House in the United States or their equivalents in other countries). Significant parts of these agreements must be ratified by national legislatures, which takes years. Often they are not ratified at all or demand further adaptation, which then requires years more of inter-national negotiations.Moreover, when agreements finally are reached, they are often not honoured or are openly breached; frequently, the mechanisms for enforcement either do not exist or are themselves cumbersome, slow, and weak and can handle only a small volume of traffic. The argument may be made that the North American Free Trade Association (NAFTA), the General Agreement on Tariffs and Trade (GATT), and the World Trade Organization (WTO) have worked reasonably well.(3) However, one should note that trade is different in character from most other transnational issues,(4) and it is hence a mistake to generalize from the experience of trade treaties and organizations to other transnational treaties and organizations. …

Trade creation and trade diversion in the EEC, the LAFTA and the CMEA: 1960-1994

In a simplified version of the gravity model, appropriate dummy variables have been introduced to analyse the effects of both trade creation and trade diversion by three economic organizations, the European Economic Community (EEC), the Latin American Free Trade Association (LAFTA) and the Council of Mutual Economic Assistance (CMEA), for the period 1960-94. Five-year intervals are the main subject of measurement. The results show that both trade creation dummies and trade diversion dummies have statistically significant coefficients, which show the appropriateness of this new approach. The trade creation effect and trade diversion effect of each institution are proved to be generally weakening during the 1990s. It is also observed that each Organization has a distinctive international trade character. For Japanese trade, a similar approach is used to analyse nonaligned trade by Japan, with particular interest in the effects of these three institutions on trade with Japan. The result is that there is no strong evidence that the EEC and the LAFTA trade with Japan any more or less than the hypothetical level predicted by basic explanatory variables, while the CMEA increased its trade with Japan up to the hypothetical level during the analysis period.