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  • Publication Date: 09-2015
  • Content Type: Working Paper
  • Institution: Economist Intelligence Unit
  • Abstract: The growth rates witnessed in markets across Latin America in the decade to 2010 pulled millions out of poverty, led to rapid growth of the middle class and helped to demonstrate the promise of emerging markets. Since then, however, growth has slowed dramatically across the region. 2015 will mark the fifth successive year of deceleration in Latin America, which has slowed more than any other emerging market region. With concerns over the ability of emerging markets to withstand a slowdown in China and monetary policy normalisation in the US growing, risks to the growth and financing outlook for Latin America persist. However, as economic recovery starts to gather pace in the region, opportunities for investment and growth will also re-emerge. This report provides a snapshot of the current political and economic landscape in the region, and in some of Latin America’s largest economies: Brazil, Mexico and Argentina. Each article analyses key concerns and presents our view of the outlook going forward, helping you to influence decision-making and economic outcomes for your business.
  • Topic: Development, Economics, Emerging Markets, Globalization, International Trade and Finance
  • Political Geography: Latin America
  • Author: Jose De Gregorio
  • Publication Date: 04-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Latin America's recent economic performance has been disappointing. After a very strong recovery from the Great Recession, growth has slowed considerably, and prospects for 2015 are dim. Among the seven largest economies in the region, output is expected to contract in Argentina, Brazil, and Venezuela, and Chile, Colombia, Mexico, and Peru are projected to grow by only about 3 percent. The decline was not caused by external factors but was mostly cyclical in nature and a result of low productivity. Although monetary and fiscal policies may still have a role in supporting demand in some instances, the main problem in the region is not a lack of demand but low productivity growth. Efforts must be made to foster productivity. Institutional weakness must be addressed and inequality reduced if sustainable high growth is to resume.
  • Topic: Economics, International Trade and Finance, Monetary Policy, Financial Crisis
  • Political Geography: Latin America
  • Author: Monica de Bolle
  • Publication Date: 09-2015
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Public lending by the Brazilian Development Bank (BNDES) may have done more harm than good in Brazil, adversely affecting real interest rates and productivity growth. Specifically, BNDES's large amounts of subsidized lending are responsible for substantial credit market segmentation, choking off monetary policy transmission. As a result, to maintain price stability the Central Bank of Brazil is forced to raise interest rates more than it might do otherwise in the absence of BNDES lending. Restoring Brazil's capacity to grow in the medium term requires a thorough rethinking of the role of BNDES. In particular, the bank's lending rates should be aligned with market prices, term and risk premia, while taking into account that, with an adequate transparency framework, public development banks can increase private sector participation instead of crowding it out.
  • Topic: Development, Economics, International Trade and Finance, Markets
  • Political Geography: Brazil, Latin America
  • Author: Timmons Roberts, Guy Edwards
  • Publication Date: 03-2014
  • Content Type: Working Paper
  • Institution: The Brookings Institution
  • Abstract: China's rapidly increasing investment, trade and loans in Latin America may be entrenching high-carbon development pathways in the region, a trend scarcely mentioned in policy circles. High-carbon activities include the extraction of fossil fuels and other natural resources, expansion of large-scale agriculture and the energy-intensive stages of processing natural resources into intermediate goods. This paper addresses three examples, including Chinese investments in Venezuela's oil sector and a Costa Rican oil refinery, and Chinese investment in and purchases of Brazilian soybeans. We pose the question of whether there is a tie between China's role in opening up vast resources in Latin America and the way those nations make national climate policy and how they behave at the United Nations Framework Convention on Climate Change (UNFCCC) negotiations. We focus on the period between the 2009 Copenhagen round of negotiations and the run-up to the Paris negotiations scheduled for 2015, when the UNFCCC will attempt to finalize a successor agreement to the Kyoto Protocol.
  • Topic: Agriculture, Development, International Trade and Finance, Oil, Natural Resources, Foreign Direct Investment
  • Political Geography: China, Latin America
  • Author: David L. Goldwyn, Cory R Gill
  • Publication Date: 07-2014
  • Content Type: Working Paper
  • Institution: Atlantic Council
  • Abstract: It has been nearly ten years since the launch of Petrocaribe, a program designed to win the political loyalty of the Caribbean states through generous credit subsidies to help import Venezuelan crude oil and products. Recipient states have grown dependent on high-cost, high-carbon fuels for power generation and Venezuelan credit to balance their budgets.
  • Topic: Economics, Energy Policy, International Trade and Finance, Oil
  • Political Geography: South America, Latin America, Caribbean, Venezuela
  • Publication Date: 05-2014
  • Content Type: Working Paper
  • Institution: Aspen Institute
  • Abstract: During the past 10 years of impact investing in Brazil, we have observed a significant development in the impact investing space. Five years ago, only a few players identified themselves as impact investors, very few organizations in the social sector were investor-ready, and there were almost no co-investment opportunities. A steep increase in the number of investors and amount of capital, greater coordination among players, and a more professional workforce active in the industry today have facilitated the development of impact investing. This market study of the impact investing sector in Brazil reveals significant market growth. Nineteen of Brazil's largest impact investors, including fund managers, banks, foundations, family offices and others surveyed expect to commit 40% to 50% more capital to impact investments in 2014 compared to 2013.
  • Topic: International Trade and Finance, Political Economy, Infrastructure
  • Political Geography: Brazil, South America, Latin America
  • Author: Miguel Pérez Ludeña
  • Publication Date: 05-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Multinational enterprises (MNEs) multiplied their profits made in developing countries by four between 2002 and 2011 (at current prices). In Latin America and the Caribbean, they rose from US$20 billion in 2002 to US$113 billion in 2011. The growth rate has been even higher in Africa and China, but much lower in developed countries. This rise is explained by an increase in FDI stock in developing economies and the higher average profitability of MNEs.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Africa, China, Latin America
  • Author: Roberto Alvarez, José De Gregorio
  • Publication Date: 11-2014
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Latin American performance during the global financial crisis was unprecedented. Many developing and emerging countries successfully weathered the worst crisis since the Great Depression. Was it good luck? Was it good policies? In this paper we compare growth during the Asian and global financial crises and find that a looser monetary policy played an important role in mitigating crisis. We also find that higher private credit, more financial openness, less trade openness, and greater exchange rate intervention worsened economic performance. Our analysis of Latin American countries confirms that effective macroeconomic management was key to good economic performance. Finally, we present evidence from a sample of 31 emerging markets that high terms of trade had a positive impact on resilience.
  • Topic: Emerging Markets, International Trade and Finance, Monetary Policy, Financial Crisis
  • Political Geography: Asia, Latin America
  • Author: Giovanni Grevi
  • Publication Date: 05-2013
  • Content Type: Working Paper
  • Institution: Centre for European Policy Studies
  • Abstract: The international system is changing fast and both the European Union and Brazil will need to adapt. This paper argues that such a process of adjustment may bring the two closer together, even if their starting points differ considerably. Europe looks at the ongoing redistribution of power as a challenge, Brazil as an opportunity. Europe is coping with the detrimental impact of the economic crisis on its international profile; Brazil is enhancing its influence in its region and beyond. Their normative outlook is broadly compatible; their political priorities and behaviour in multilateral frameworks often differ, from trade to development and security issues. Despite the crisis, however, there are signals of renewed engagement by the EU on the international stage, with a focus on its troubled neighbourhood and partnerships with the US and large emerging actors such as Brazil. The latter is charting an original course in international affairs as a rising democratic power from the traditional South with no geopolitical opponents and a commitment to multilateralism. In testing the limits of its international influence, Brazil will need dependable partners and variable coalitions that go well beyond the BRICS format, which is not necessarily sustainable. This contribution suggests that the strategic partnership between the EU and Brazil may grow stronger not only as a platform to deepen economic ties and sustain growth, but also as a tool to foster cooperation in political and security affairs including crisis management, preventive diplomacy and human rights.
  • Topic: Development, Emerging Markets, Globalization, International Trade and Finance
  • Political Geography: Europe, Latin America
  • Author: Yunus Emre
  • Publication Date: 08-2013
  • Content Type: Working Paper
  • Institution: Global Political Trends Center
  • Abstract: The 2000s saw a new orientation through left including social democracy in Latin American countries. This orientation was the direct result of the failure of the neo-liberal globalization project. This paper seeks to reveal social democratic trends in Latin America. For this purpose the rise of the Latin American left and basic trends were revealed and developments in Uruguay, Brazil, Chile and Argentina were examined.
  • Topic: Democratization, Globalization, International Trade and Finance, Politics, Governance
  • Political Geography: Brazil, Argentina, Latin America, Chile
  • Author: Richard M. Locke, Salo V. Coslovsky
  • Publication Date: 08-2013
  • Content Type: Working Paper
  • Institution: Watson Institute for International Studies, Brown University
  • Abstract: In recent years, global corporations and national governments have been enacting a growing number of codes of conduct and public regulations to combat dangerous and degrading work conditions in global supply chains. At the receiving end of this activity, local producers must contend with multiple regulatory regimes, but it is unclear how these regimes interact and what results, if any, they produce. This paper examines this dynamic in the sugar sector in Brazil. It finds that although private and public agents rarely communicate, let alone coordinate with one another they nevertheless reinforce each other's actions. Public regulators use their legal powers to outlaw extreme forms of outsourcing. Private auditors use the trust they command as company insiders to instigate a process of workplace transformation that facilitates compliance. Together, their parallel actions block the low road and guide targeted firms to a higher road in which improved labor standards are not only possible but even desirable.
  • Topic: Agriculture, Human Rights, International Law, International Trade and Finance, Labor Issues
  • Political Geography: Latin America
  • Author: Angelika Rettberg
  • Publication Date: 11-2013
  • Content Type: Working Paper
  • Institution: German Institute of Global and Area Studies
  • Abstract: The involvement of business in peace negotiations and peacebuilding has become a standard concern for countries involved in transitions from armed conflict. This article sheds light on the recent history of the private sector's role in peace processes in Colombia – a country that has been engulfed by conflict for almost five decades. The present paper illustrates how business perceptions and behavior have evolved throughout various attempts at negotiating peace, revealing that both the perceived costs of conflict and the expected benefits of peace play a part in promoting business pro-peace activism. A focus on business preferences is important for scholarly and public policy purposes. In light of dwindling international cooperation resources, it is likely that the Colombian state and society (mainly wealthy taxpayers and the business community) will bear the brunt of Colombia's peacebuilding costs. Understanding when, how, and why crucial allies (and potential foes) of peace processes become mobilized is therefore crucial for analyzing the prospects of durable peace in the country.
  • Topic: Conflict Resolution, Security, International Trade and Finance, Markets, Peace Studies, War, Narcotics Trafficking, Fragile/Failed State
  • Political Geography: Colombia, Latin America
  • Publication Date: 05-2013
  • Content Type: Working Paper
  • Institution: Atlantic Council
  • Abstract: For too long, the United States and Europe have failed to embrace Latin America as a partner in a broader transatlantic community. Modern Latin America, like the United States, springs from a common European heritage and shares the historical, political, and philosophical roots that bind the West so closely together. The region is of growing strategic importance, with its expanding markets, energy resources, and global economic reach. But while Latin America is changing rapidly, the United States and Europe have been slow to sufficiently recognize and embrace this new world, missing crucial policy and business opportunities.
  • Topic: Economics, International Cooperation, International Trade and Finance
  • Political Geography: United States, Europe, Latin America
  • Author: David J. Goldwyn
  • Publication Date: 12-2013
  • Content Type: Working Paper
  • Institution: Atlantic Council
  • Abstract: Mexico's Congress passed its final hurdle to reform the Constitution and allow for private investment in the energy industry on December 12, 2013. This significant achievement heralds the most comprehensive energy reform in the last seventy-five years of the country's history.
  • Topic: Economics, Energy Policy, International Trade and Finance, Markets, Oil
  • Political Geography: United States, Latin America, Mexico
  • Author: Edwin M. Truman
  • Publication Date: 12-2013
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: At the annual meeting of the International Forum of Sovereign Wealth Funds (IFSWF) held in Oslo, Norway on October 2-3, 2013, the forum reviewed and subsequently released its second report on members' experiences in the application of the Santiago Principles for sovereign wealth funds (SWFs). The Santiago Principles were adopted by a group of countries with such funds in September 2008 in response to concerns about threats to political, economic, and financial security in countries receiving SWF investments. The objective was to promote the transparency and accountability of SWFs for the countries of origin as well as the countries in which the funds were investing.
  • Topic: Economics, International Trade and Finance, Sovereign Wealth Funds
  • Political Geography: Norway, Latin America, Santiago
  • Author: Deborah Elms, C. L. Lim
  • Publication Date: 02-2012
  • Content Type: Working Paper
  • Institution: S.Rajaratnam School of International Studies
  • Abstract: The Trans-Pacific Partnership (TPP) is a trade agreement currently under negotiation between nine countries in three continents, including Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, United States and Vietnam. In late 2011 three additional countries--Japan, Canada and Mexico--announced their intention to join as well. The TPP has always been called a "high quality, 21st century" agreement that covers a range of topics not always found in free trade agreements. This includes not just trade in goods, services and investment, but also intellectual property rights, government procurement, labor, environment, regulations, and small and medium enterprises. This paper traces the complex negotiations and evolution of the talks since the early 2000s to the present.
  • Topic: Economics, Environment, International Trade and Finance, Treaties and Agreements, Labor Issues, Intellectual Property/Copyright
  • Political Geography: United States, Japan, Malaysia, Canada, Israel, Vietnam, Latin America, Australia, Australia/Pacific, Mexico, Singapore, Chile, Peru, New Zealand, Brunei
  • Author: Barbara Kotschwar
  • Publication Date: 04-2012
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: In Latin America, inadequate transportation infrastructure has been identified as an increasingly important impediment to the region's further integration in global trade and a significant factor preventing countries from properly taking advantage of the multitude of regional, plurilateral, and bilateral trade agreements signed in the past decade and a half. This paper examines transport and communications infrastructure initiatives in Latin American and Asian regional trade arrangements and finds several lessons Asia can teach Latin America.
  • Topic: Development, Economics, International Trade and Finance, Communications, Infrastructure
  • Political Geography: Asia, Latin America
  • Author: Theodore H. Moran, Julia Muir, Barbara Kotschwar
  • Publication Date: 02-2012
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: China's need for vast amounts of minerals to sustain its high economic growth rate has led Chinese investors to acquire stakes in natural resource companies, extend loans to mining and petroleum investors, and write long-term procurement contracts for oil and minerals in Africa, Latin America, Australia, Canada, and other resource-rich regions. These efforts to procure raw materials might be exacerbating the problems of strong demand; "locking up" natural resource supplies, gaining preferential access to available output, and extending control over the world's extractive industries. But Chinese investment need not have a zero-sum effect if Chinese procurement arrangements expand, diversify, and make more competitive the global supplier system. Previous Peterson Institute research (see Moran 2010) and new research undertaken in this paper, show that the majority of Chinese investments and procurement arrangements serve to help diversify and make more competitive the portion of the world natural resource base located in Latin America. For a more comprehensive analysis, the authors conduct a structured comparison of four Peruvian mines with foreign ownership: two Organization for Economic Cooperation and Development-based, and two Chinese. They examine what conditions or policy measures are most effective in inducing Chinese investors to adopt international industry standards and best-practices, and which are not. They distill from this case study some lessons for other countries in Latin America, Africa, and elsewhere that intend to use Chinese investment to develop their extractive sectors: first, that financial markets bring accountability; second, that the host country regulatory environment makes a significant difference; and third, that foreign investment is a catalyst for change.
  • Topic: Economics, International Trade and Finance, Natural Resources
  • Political Geography: China, Canada, Latin America, Australia
  • Author: Liliana Rojas-Suarez, Arturo J. Galindo, Marielle del Valle
  • Publication Date: 05-2012
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: A number of banks in developed countries argue that the new capital requirements under Basel III are too stringent and that implementing the proposed regulation would require raising large amounts of capital, with adverse consequences on credit and the cost of finance. In contrast, many emerging market economies claim that their systems are adequately capitalized and that they have no problems with implementing the new capital requirements. This paper conducts a detailed calculation of capital held by the banks in four Latin American countries—known as the Andean countries: Bolivia, Colombia, Ecuador and Peru—and assesses the potential effects of full compliance with the capital requirements under Basel III. The conclusions are positive and show that while capital would decline somewhat in these countries after they make adjustments to comply with the new definition of capital under Basel III, they would still meet the Basel III recommendations on capital requirements. More importantly, these countries would hold Tier capital to risk-weighted-asset ratios significantly above the 8.5 percent requirement under Basel III. That is, not only the quantity, but also the quality of capital is adequate in the countries under study. While encouraging, these results should not be taken as a panacea since the new regulations are only effective if coupled with appropriate risk management and supervision mechanisms to control the build-up of excessive risk-taking by banks. Further research into these areas is needed for a complete assessment of the strength of banks in the Andean countries.
  • Topic: Debt, Economics, International Trade and Finance, Monetary Policy
  • Political Geography: Colombia, Latin America, Peru, Ecuador, Bolivia
  • Author: Liliana Rojas-Suarez, José Luis Guasch, Veronica Gonzales
  • Publication Date: 06-2012
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Over the last decade, Central American countries—Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua—have made significant progress in social and economic areas. In particular, they have stabilized their economies after decades of civil war and the economic volatility that plagued the region through the 1990s. Most countries in Central America have taken important steps to improve their business climates, particularly by enhancing macroeconomic stability, improving the soundness of their financial systems, making improvements in infrastructure services and trade facilitation, reducing red tape, and simplifying their regulatory and tax frameworks. As a result, before the 2008 financial crisis, GDP per capita in Central America grew at an average rate of 3 percent per year from 2003 to 2008, which, albeit modest, was the most robust and stable period of growth the region had witnessed since the early 1990s. However, despite this achievement, Central American economies are still lagging behind the rest of Latin America and other middle-income countries by per-capita growth rates of 0.5 to 2 percentage points. Even more worrying are the levels of poverty and inequality, which show the lack of inclusiveness in their growth models. Moreover, recent developments in the region show a number of red flags that are weakening macroeconomic and democratic stability. Significant structural changes are urgently needed to secure sustained and inclusive growth.
  • Topic: Development, Economics, Emerging Markets, International Trade and Finance
  • Political Geography: Latin America, Central America
  • Author: Déborah Itriago
  • Publication Date: 05-2012
  • Content Type: Working Paper
  • Institution: Oxfam Publishing
  • Abstract: Paraguay's tax system is insufficient to provide the resource base to eradicate poverty in the country, and has done little or nothing to achieve a more equal distribution of income and wealth. Two major taxation reforms over the last decade have done little to alleviate the fiscal injustice that is generated partly by the low tax reciprocity of the soy agribusiness – Paraguay's main export crop. Meanwhile, programmes to support small- scale farming receive a level of public financing accounting for just 5 per cent of public expenditure. With one of the highest levels of unequal land ownership in the world, labour informality at very high levels and poor environmental regulation of soy producers, the livelihoods and ecosystems of Paraguay's small-scale producers are at risk. There are serious loopholes in Paraguay's tax system that must be addressed in order to deliver a fairer, progressive taxation system that will allow the country to meet its social objectives.
  • Topic: Agriculture, Environment, International Trade and Finance, Poverty
  • Political Geography: Latin America
  • Author: Timothy A. Wise
  • Publication Date: 05-2012
  • Content Type: Working Paper
  • Institution: Global Development and Environment Institute at Tufts University
  • Abstract: More than 40% of U.S. corn is now consumed in the production of ethanol. With the United States by far the world's largest producer and exporter of corn, this represents an estimated 15% of global corn production. A recent survey by the National Academy of Sciences estimated that globally biofuels expansion accounted for 20 - 40% of the price increases seen in 2007 - 8, when prices of many food crops doubled. This had a dramatic impact on poor consumers and on net - food - importing developing countries. Expanding U.S. production and consumption of corn - based ethanol, which has been encouraged by a range of U.S. government subsidies and incentives, is considered one of the most important biofuel programs in putting upward pressure on food prices. Mexico now imports about one - third of its corn from the United States. Using conservative estimates from a study on U.S. ethanol expansion and corn prices, we estimate the direct impacts of U.S. ethanol expansion on Mexican corn import costs. We find that from 2006 - 2011, U.S. ethanol expansion cost Mexico about $1.5 billion due to ethanol - related corn price increases. Other methodologies suggest the costs could be more than twice as high, surpassing $3 billion over the period.
  • Topic: Security, Agriculture, Development, International Cooperation, International Trade and Finance, Food
  • Political Geography: United States, Latin America, Mexico
  • Author: Graciana del Castillo, Daniel García
  • Publication Date: 08-2012
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: An analysis of trends in foreign direct investment (FDI) in Uruguay is difficult due to data problems. Nevertheless, balance-of-payments data reveal that inward FDI (IFDI) increased sharply in the second half of the decade 2002-2011 under analysis. IFDI flows relative to GDP rose annually on average to close to 6% in 2005-2011. This compares favorably with annual average flows of only 1% in the decade before the banking crisis and the sharp devaluation of the Uruguayan peso in 2002. At the time, investment in natural resources, including in farmland and real estate in Punta del Este, became very attractive. IFDI flows peaked at 7.5% of GDP in 2006, with the investment in the construction of the first cellulose plant in the country by a multinational enterprise (MNE) from Finland. The rapid increase in IFDI in the second half of the past decade took place amid high rates of economic growth (averaging about 6% a year on average), in combination with an adequate policy and regulatory framework and fiscal incentives to foreign investors. So far, Uruguay remains primarily a host country for FDI, with outward FDI (OFDI) that has been and continues to be insignificant.
  • Topic: Development, Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Latin America
  • Author: Carlos Portales
  • Publication Date: 02-2012
  • Content Type: Working Paper
  • Institution: Norwegian Peacebuilding Resource Centre
  • Abstract: This paper analyses the creation of the Community of Latin American and Caribbean States (CELAC) in Caracas on 3 December 2011, locating it within the current context of cooperation and integration in Latin America and the Caribbean. This new body is based on an agreement that includes political cooperation functions and the task of seeking inter-governmental coordination of public policies.
  • Topic: Economics, International Trade and Finance, Regional Cooperation, Treaties and Agreements
  • Political Geography: Latin America, Caribbean
  • Author: Nora Lustig, Luis F. Lopez-Calva, Eduardo Ortiz-Juarez
  • Publication Date: 10-2012
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Between 2000 and 2010, the Gini coefficient declined in 13 of 17 Latin American countries. The decline was statistically significant and robust to changes in the time interval, inequality measures, and data sources. In-depth country studies for Argentina, Brazil, and Mexico suggest two main phenomena underlie this trend: a fall in the premium to skilled labor and more progressive government transfers. The fall in the premium to skills resulted from a combination of supply, demand, and institutional factors. Their relative importance depends on the country.
  • Topic: Development, Economics, Emerging Markets, Globalization, International Trade and Finance, Poverty, Social Stratification
  • Political Geography: Brazil, Argentina, Latin America, Mexico
  • Author: Fulvio Castellacci
  • Publication Date: 10-2012
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: The paper presents an empirical analysis of the innovative activities of business groups in Latin America. It compares the innovativeness of group-affiliated firms (GAFs) and standalone firms (SAFs), and it investigates how country-specific institutional factors – financial, legal, and labor market institutions – affect the group-innovation relationship. The empirical analysis is based on the most recent wave of the World Bank Enterprise Survey (period 2010-2011), and it focuses on a sample of 6500 manufacturing firms across 20 Latin American countries. The econometric results point out two major conclusions. First, GAFs are more innovative than SAFs: we estimate the innovation propensity of GAFs to be 9% higher than that of SAFs. Secondly, across countries, the innovativeness of GAFs is higher for national economies with a better institutional system than for countries with a less efficient institutional set up.
  • Topic: Economics, Globalization, International Trade and Finance, Markets
  • Political Geography: Latin America
  • Author: Perrin Beatty, Andrés Rozental
  • Publication Date: 11-2012
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Both Canada and Mexico are recovering well from the global economic recession of 2008-2009, but must work harder to make their bilateral relationship work to their mutual benefit. Bilateral trade and investment have grown steadily from very low pre-North American Free Trade Agreement (NAFTA) levels, but there remains enormous, untapped potential, particularly in Mexico. Student, tourist, investor and temporary worker exchanges are enhancing familiarity with each other, but unhelpful stereotypes remain common. New investment and trade opportunities should flow from the new Mexican administration's commitment to open up the energy sector to foreign participation. The assessment and recommendations contained in this special report point to the benefit of efforts that will intensify bilateral partnerships, not only in their own right, but also in strengthening the two countries' ability to deal more effectively with the United States in pursuing matters of mutual concern.
  • Topic: Economics, International Trade and Finance, Markets, Bilateral Relations
  • Political Geography: United States, Canada, Latin America, North America, Mexico
  • Author: Miguel Pérez Ludeña
  • Publication Date: 03-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Chinese foreign direct investment (FDI) in Latin America is a recent phenomenon. Although the China National Petroleum Corporation and other companies have been present in Peru, Ecuador and Venezuela since the early 1990s, large projects have been pursued only since 2006, following an extended period of high commodity prices. The Economic Commission for Latin America and the Caribbean (ECLAC) estimated that there were US$ 15 billion of Chinese FDI inflows into Latin America in 2010, 90% of which were in extractive industries. This further contributed to the already high percentage of Chinese FDI flows to the region that are in natural resources. At a time of high economic growth fueled by commodity exports and strong currency appreciation (particularly in Brazil), FDI into extractive industries strengthens the region's specialization in primary products at the expense of manufacturing and other activities.
  • Topic: Economics, International Trade and Finance, Markets, Natural Resources, Foreign Direct Investment
  • Political Geography: China, Brazil, Latin America, Peru
  • Author: Luigi R. Einaudi
  • Publication Date: 03-2011
  • Content Type: Working Paper
  • Institution: Institute for National Strategic Studies
  • Abstract: Washington's identification of Brazil with Latin America and the Third World hampers its appreciation of Brazil's power and importance to the United States. It is true that Brazil is geographically part of Latin America, and it is also true that Brazil, a founder of the Group of 77, was, with India, among the original leaders of the “Third World.” But Brazil is Brazil—as large and every bit as unique as the United States or China. Brazil, for many years the seat of the Portuguese empire, is the world's largest Portuguese-speaking country. It never had the large settled Amerindian populations that became a repressed underclass in the Andes and Mesoamerica; Brazilians today are as diverse as their North American cousins but growing faster.
  • Topic: Economics, International Trade and Finance, Bilateral Relations
  • Political Geography: United States, Brazil, Latin America
  • Publication Date: 02-2011
  • Content Type: Working Paper
  • Institution: The Carter Center
  • Abstract: An opening product of the Andean-U.S. Dialogue Forum, this report is intended to spur conversations on more effective cooperation by identifying convergences and divergences in priorities among the countries and the citizens of Venezuela, Colombia, Ecuador, Peru, and Bolivia and the United States. It seeks to open the door to a better understanding of the internal dynamics in each country and to reduce stereotypes that impede cooperation to resolve mutual challenges. This report highlights the transnational issues of energy, climate change, trade, and illegal drugs, recognizing that beneficial progress will demand a collective response from all.
  • Topic: Climate Change, International Trade and Finance, Regional Cooperation, War on Drugs
  • Political Geography: United States, Colombia, Latin America, Venezuela, Peru, Ecuador, Bolivia
  • Author: Michael Cohen
  • Publication Date: 03-2011
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: International narratives on Argentina's recovery from the crisis of 2001-02 tend to emphasize the role of rising commodity prices and growing demand from China. Argentina is said to have been 'lucky', saved by global demand for its agricultural exports. The international narrative has also been used by local agricultural exporters to justify their objections against higher export taxes during periods of high commodity prices. These narratives are not correct. Data on the country's recovery show that it was not led by agricultural exports but was fuelled by urban demand and production. When the Convertibility period ended and the peso was devalued in 2002, price increases for imports stimulated the production of domestic goods and services for consumers. This production in turn generated multiplier effects which supported small and medium-sized firms and helped to create many new jobs. This later produced a revival of the construction and then the manufacturing sectors as well.
  • Topic: Agriculture, Economics, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: China, Argentina, Latin America
  • Author: Carmen M. Reinhart, Nicolas E. Magud, Kenneth S. Rogoff
  • Publication Date: 03-2011
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: The literature on capital controls has (at least) four very serious apples-to-oranges problems: (i) There is no unified theoretical framework to analyze the macroeconomic consequences of controls; (ii) there is significant heterogeneity across countries and time in the control measures implemented; (iii) there are multiple definitions of what constitutes a "success" and (iv) the empirical studies lack a common methodology-furthermore these are significantly "overweighted" by a couple of country cases (Chile and Malaysia). In this paper, we attempt to address some of these shortcomings by: being very explicit about what measures are construed as capital controls. Also, given that success is measured so differently across studies, we sought to "standardize" the results of over 30 empirical studies we summarize in this paper. The standardization was done by constructing two indices of capital controls: Capital Controls Effectiveness Index (CCE Index), and Weighted Capital Control Effectiveness Index (WCCE Index). The difference between them lies in that the WCCE controls for the differentiated degree of methodological rigor applied to draw conclusions in each of the considered papers. Inasmuch as possible, we bring to bear the experiences of less well known episodes than those of Chile and Malaysia. Then, using a portfolio balance approach we model the effects of imposing capital controls on short-term flows. We find that there should exist country-specific characteristics for capital controls to be effective. From this simple perspective, this rationalizes why some capital controls were effective and some were not. We also show that the equivalence in effects of price- vs. quantity-capital control are conditional on the level of short-term capital flows.
  • Topic: Development, Economics, International Trade and Finance, Markets
  • Political Geography: Latin America, Southeast Asia
  • Author: Gordon S. Smith
  • Publication Date: 05-2011
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This paper provides a brief history of the evolution of the Group of Seven (G7) from its origins in the aftermath of the 1971 breakdown of the Bretton Woods system of exchange rates and the oil crisis in 1973. It then discusses Russia's participation at summits after the fall of the Berlin Wall, formally joining the group in 1997, thus becoming the Group of Eight (G8). The paper gives a concise account of the formation of the Group of Twenty (G20) finance ministers and central bank governors in the late 1990s, in the wake of financial crises in Asia and Latin America, which was elevated to a leaders' summit forum at the outbreak of the global financial crisis in 2008. The paper wraps up with a discussion of the differences in the G8 and G20 models, concluding that the G20 process is still the best option for meeting the challenges of complex global governance issues.
  • Topic: International Cooperation, International Organization, International Trade and Finance, Financial Crisis, Governance
  • Political Geography: Russia, Asia, Latin America
  • Author: Samuel W. Bodman, James D. Wolfensohn, Julia E. Sweig
  • Publication Date: 07-2011
  • Content Type: Working Paper
  • Institution: Council on Foreign Relations
  • Abstract: Brazil has transcended its status as the largest and most resource-rich country in Latin America to now be counted among the world's pivotal powers. Brazil is not a conventional military power, it does not rival China or India in population or economic size, and it cannot match the geopolitical history of Russia. Still, how Brazil defines and projects its interests, a still-evolving process, is critical to understanding the character of the new multipolar and unpredictable global order.
  • Topic: Development, Economics, Globalization, International Trade and Finance
  • Political Geography: Russia, China, India, Brazil, Latin America
  • Author: Miguel Haubrich Seco
  • Publication Date: 07-2011
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: In its external relations, the EU advances regional cooperation as a successful means of achieving peace and prosperity. In doing so, the EU promotes its own model as the most successful case of regional integration. A wide-reaching set of instruments, spanning from trade to political dialogue and aid, is used to promote regional cooperation and integration. Noneheless, regional organisations supported by the EU are far from accomplishing their set objectives. Using as a test case the Andean Community, the oldest Latin American regional organisation and a prominent case of EU support for regional integration, this paper examines the reasons behind the EU's lack of impact in promoting regional integration. Stemming from this analysis, the paper proposes a recalibration of EU policy by decoupling trade relations from political engagement and by increasing support for physical and visible integration as opposed to formal institutions detached from the perceived needs of the public.
  • Topic: Economics, International Trade and Finance, Regional Cooperation
  • Political Geography: Europe, Latin America
  • Author: Jose Brambila-Macias, Isabella Massa, Matthew J. Salois
  • Publication Date: 11-2011
  • Content Type: Working Paper
  • Institution: Danish Institute for International Studies
  • Abstract: In this paper, we use a mixed-effects trade gravity model on a sample of 83 developing countries over the period 1990-2007 to assess the impact of trade finance and foreign aid on bilateral export flows. In addition to traditional variables, we also include a banking crises variable and a global economic downturns variable among the regressors. Differences across developing regions are taken into account. Our results suggest that: (i) trade finance has a positive and significant impact on bilateral export flows in all developing regions except Latin America; (ii) foreign aid matters in all regions; (iii) global economic downturns exert a negative and significant impact on export flows in all developing countries, and especially in Latin American and Sub-Saharan African economies; (iv) banking crises appear to have no significant impact in most developing regions.
  • Topic: Economics, Globalization, International Trade and Finance, Foreign Aid, Financial Crisis
  • Political Geography: Africa, Latin America
  • Author: Mauricio Cá¡rdenas, Joshua Meltzer
  • Publication Date: 07-2011
  • Content Type: Policy Brief
  • Institution: The Brookings Institution
  • Abstract: A trio of trade agreements now pending before Congress would benefit the United States both economically and strategically. Carefully developed accords with South Korea, Colombia and Panama will boost U.S. exports significantly, especially in the key automotive, agricultural and commercial services sectors. Among the other benefits are: increased U.S. competitiveness enhancement of U.S. diplomatic and economic postures in East Asia and Latin America new investment opportunities better enforcement of labor regulation and improved transparency in these trading partners' regulatory systems.
  • Topic: Diplomacy, Economics, International Trade and Finance, Treaties and Agreements, Labor Issues
  • Political Geography: Kenya, United States, Israel, Colombia, Latin America
  • Publication Date: 07-2011
  • Content Type: Video
  • Institution: Economist Intelligence Unit
  • Abstract: José Manuel Zelaya, former president of Honduras, returned to his country in May after the coup that ousted him in 2009. Since coming back, he has reentered politics and this has raised concerns that he may once again try and change the constitution. This could have severe implications for the operating environment in Honduras.
  • Topic: Democratization, Development, International Trade and Finance, Markets, Governance
  • Political Geography: Latin America
  • Author: Victor E. Renuart, Jr., Biff Baker
  • Publication Date: 02-2010
  • Content Type: Working Paper
  • Institution: Institute for National Strategic Studies
  • Abstract: The United States and Mexico share a common history shaped by military incursions during the 19th and early 20th centuries. The bond between the American and Mexican people, however, has continued to grow closer over time despite occasional negative rhetoric from politicians in Washington, DC, and Mexico City. At local and state levels, relations solidified through the closely knit fabric of our border towns, intermarriage between families on each side of the border, and the development of infrastructure (to include water, wastewater, and gas and electricity utilities) that serves communities to the north and south. At the national level, our relationship became closer due to economic growth resulting from the North American Free Trade Agreement (NAFTA), which now accounts for almost $1 billion (U.S. dollars) in trade per day between the two countries.
  • Topic: Security, International Trade and Finance, Treaties and Agreements
  • Political Geography: United States, America, Washington, Latin America, North America, Mexico
  • Author: Liliana Rojas-Suarez
  • Publication Date: 01-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The international financial crisis of 2008–09 exposed the strengths and weaknesses of the current paradigm of development in Latin America, a paradigm based on liberalized capital accounts and significantly improved macroeconomic conditions. This paper presents lessons derived from the crisis, not only for the region itself, but also for other developing countries that might seek economic growth in the context of greater integration to the international capital markets. Some of the lessons are not new but have been reinforced by the crisis, such as Latin America's imperative need for export diversification (not only in products but in partners). Other lessons break with longstanding myths about the region, such as its inability to undertake counter-cyclical policies—at least on the monetary side. Yet other lessons reflect new developments in the current growth paradigm, such as a renewed assessment of (1) the relative roles of foreign and domestic banks in shielding the financial system against external shocks and (2) the potential costs of adopting blanket international financial regulations that do not account for a country's degree of development. Taken together, the lessons in this paper bring a new sense of optimism for growth in Latin America.
  • Topic: Economics, International Trade and Finance, Financial Crisis
  • Political Geography: Latin America
  • Author: Pedro Aravena Lavin
  • Publication Date: 08-2010
  • Content Type: Working Paper
  • Institution: German Institute of Global and Area Studies
  • Abstract: This article analyzes the support for democracy in Chile from an economic, institutional and political perspective. It uses data from Latinobarómetro for the period 1996–2007 and a statistical method of estimation, “ordered logit,” in order to answer the question of why support for Chilean democracy is not connected with economic growth. The analysis generates three key results of interest. First, regardless of the fact that GDP per capita does not have any effect on the level of support for democracy, it does affect individuals' perceptions of economic performance, since the variable “economic situation” is one of the most explanatory variable of the model. Second, the analysis demonstrates the importance of the degree of confidence in the Congress at the moment that perceptions of democracy are evaluated. Third, “political ideology” is the most useful variable in explaining support for democracy, a fact which suggests that the adherents of the right wing do not support the democratic system. This is the most reliable reason for the moderate level of support for democracy in Chile.
  • Topic: Democratization, Economics, International Trade and Finance, Politics
  • Political Geography: Latin America, Chile
  • Author: Robert Kappel
  • Publication Date: 09-2010
  • Content Type: Working Paper
  • Institution: German Institute of Global and Area Studies
  • Abstract: As the conception of and debates on regional powers have been led by political science, this paper aims to contribute to the discussion from an economics perspective. Based on the discussion of different concepts of economic power—such as those of Schumpeter, Perroux, Predöhl, or Kindleberger—concepts of technological leadership, and the global value chain approaches, the paper develops a research framework for the economics of regional powers. This framework is then tested using descriptive statistics as well as regressions analysis, with a focus on the four regional powers Brazil, China, India, and South Africa. As economic power is relational, the relationship of regional powers to other nations in the region is analyzed.
  • Topic: Economics, International Trade and Finance
  • Political Geography: Africa, China, India, South Africa, Brazil, Latin America
  • Author: Hal Brands
  • Publication Date: 08-2010
  • Content Type: Working Paper
  • Institution: The Strategic Studies Institute of the U.S. Army War College
  • Abstract: This monograph analyzes Brazilian grand strategy under President Luiz Inácio Lula da Silva. During Lula's nearly 8 years in office, he has pursued a multipronged grand strategy aimed at hastening the transition from unipolarity and Western economic hegemony to a multipolar order in which international rules, norms, and institutions are more favorable to Brazilian interests. Lula has done so by emphasizing three diplomatic strategies: soft balancing against the United States, building coalitions to magnify Brazilian negotiating power, and seeking to position Brazil as the leader of a more united South America.
  • Topic: Economics, Globalization, International Trade and Finance, Regional Cooperation
  • Political Geography: United States, Brazil, South America, Latin America
  • Author: Alejandro Foxley
  • Publication Date: 09-2010
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: While middle-income countries have pursued regional trade agreements since the 1960s, these ties are becoming more important as the global economic crisis curtails demand from the United States and other major markets. With the Doha Round of multilateral trade talks stalled, regional trade agreements (RTAs) offer an alternative approach to increase trade, spur stronger economic growth, and lower unemployment rates in participating countries.
  • Topic: Economics, International Trade and Finance
  • Political Geography: United States, Asia, Latin America
  • Author: Alexandre de Gramont
  • Publication Date: 09-2010
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In his recent article, “Thinking twice about a gold rush: Pacific Rim v. El Salvador” (Columbia FDI Perspectives, No. 23, May 24, 2010), Professor Gus Van Harten uses the PacRim v. El Salvador arbitration, pending at the International Centre for Settlement of Investment Disputes (ICSID), as the basis for asserting a number of criticisms against the overall system of arbitration under investment treaties.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: Latin America
  • Author: Gus Van Harten
  • Publication Date: 05-2010
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Whether it concerns oil drilling or gold mining, sometimes a government, facing new circumstances, must change its mind.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Latin America
  • Author: Premila Nazareth Satyanand
  • Publication Date: 05-2010
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Hitherto, political risk has worried developed country multinational enterprises (MNEs) investing in developing country markets. But as more emerging market firms invest overseas, they too must grapple with this subject. World Investment and Political Risk 2009 looks at this issue for the first time and finds that Brazilian, Russian, Indian, and Chinese (BRIC) firms appear to worry more about political risk than global counterparts. Though these results are based on as mall sample of 90 of the largest BRIC investors, they are thought-provoking nonetheless.
  • Topic: International Political Economy, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Russia, China, India, Latin America
  • Author: Paul Teng, Margarita Escaler
  • Publication Date: 10-2010
  • Content Type: Policy Brief
  • Institution: Centre for Non-Traditional Security (NTS) Studies
  • Abstract: Over the last four decades, Brazil has transformed its agricultural sector to become the first tropical agricultural giant and the first to challenge the dominance of the world's major food exporters. This paper examines the secrets of Brazil's success and ponders whether Asia should try to emulate the Brazilian model to help achieve food security for its people and contribute to an increased level of selfsufficiency in the region.
  • Topic: Agriculture, International Trade and Finance, Food
  • Political Geography: Asia, Brazil, Latin America
  • Author: Leslie Wehner
  • Publication Date: 01-2009
  • Content Type: Working Paper
  • Institution: German Institute of Global and Area Studies
  • Abstract: This article analyzes the “other” goals that drive Chile and Mexico to achieve intra- and extra-regional FTAs. These countries have a predominantly economic motivation to negotiate FTAs. However, there are other elements that are less apparent, but equally important, in Chile's and Mexico's FTA policies. These accords can also be seen as means to power and as mechanisms for establishing a closer system of global economic governance than that available through multilateral forums. Therefore, these two countries' FTAs are an ad hoc system that represents their respective economic contexts and realities. In other words, FTAs as an essential part of Chile's and Mexico's foreign policies have a strategic political-economic logic that synthesizes the notions of power and institutions. However, these two forces do not exclude of the economic logic for FTAs, which focuses on the maximization of consumers' welfare and producer s' gains. On the contrary, they have to be taken as complementary factors.
  • Topic: Foreign Policy, International Trade and Finance, Markets, Regional Cooperation, Treaties and Agreements
  • Political Geography: Latin America, Mexico, Chile
  • Author: Leslie Wehner
  • Publication Date: 05-2009
  • Content Type: Working Paper
  • Institution: German Institute of Global and Area Studies
  • Abstract: Why is Chile following such a proactive FTA policy and at the same time promoting the benefits of these type of agreements to other Latin American countries? There is a pre-dominance of economic explanations to analyze why countries pursue an active FTA policy. Yet within an FTA policy, understood as an essential component of a country's foreign policy, strategic and ideational goals are also important. Without downgrading economic explanations, I argue in this article that Chile's proactive FTA policy can also be under-stood using variables from "traditional" international relations such as power, governance, and ideas. A framework based on such political-economic strategic issues and value-based ideas provides a better understanding of the country's motivations in implementing such a proactive FTA policy.
  • Topic: Globalization, International Trade and Finance
  • Political Geography: Latin America, Chile
  • Author: Kenneth Shadlen
  • Publication Date: 04-2009
  • Content Type: Working Paper
  • Institution: Global Development and Environment Institute at Tufts University
  • Abstract: National policies toward intellectual property (IP) were revolutionized in the 1990s, as countries adopted new systems to conform to the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). TRIPS-style IP regimes make patents available for more types of knowledge, grant long periods of patent protection, and endow patent owners with strong rights of exclusion. This paper analyzes two contrasting patterns of political mobilization and pressures for change that newly-introduced, TRIPS-style regimes became subject to by the early 21st Century. Most governments faced pressures to address aspects of their IP systems regarding pharmaceutical patents; governments came under pressure to reform their new patent systems, calling into question the appropriateness and utility of broad and strong private rights of exclusion as tools for disseminating knowledge. Most governments also faced pressures to modify aspects of their patent systems more broadly related to science, technology, and indigenous innovation (STI); governments came under pressure to reinforce their new patent systems, buttressing the role of private rights of exclusion as mechanisms to incentivize the creation and distribution of knowledge and technology. I provide a political explanation for the contrasting trajectories of reform and reinforcement by examining how different policy arrangements generate and mobilize interests for continuity and discontinuity. The focus is on asymmetric patterns of interest mobilization: those actors who benefit from policy interventions tend to mobilize more than those who suffer; those actors who suffer retain the capacities for mobilization and resistance more in the area of health-drugs than STI.
  • Topic: Economics, International Trade and Finance, Political Economy, Intellectual Property/Copyright
  • Political Geography: Latin America
  • Author: Michael Mortimore, Carlos Razo
  • Publication Date: 08-2009
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Despite the current economic crisis, outward foreign direct investment (OFDI) by Latin American and Caribbean enterprises continued its upward trend in 2008 (annex figure 1). OFDI by firms in the region reached nearly USD 35 billion in 2008, an increase of 42% with respect to 2007 (ECLAC, 2009a). However, several of the factors that fostered such growth have recently changed, possibly affecting OF DI prospects for 2009. This Perspective briefly explores these changes and their potential effects on firms' investing behavior, as well as some important countervailing factors that may cushion the effects of the economic crisis on Latin American firms' investment plan.
  • Topic: Development, Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Latin America, Mexico
  • Author: Luís Afonso Lima, Octavio de Barros
  • Publication Date: 08-2009
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The internationalization of Brazilian companies is a relatively recent phenomenon. From 2000 to 2003, outward foreign direct investment (OFDI) averaged USD 0.7 billion a year. Over the four-year period 2004−2008, this average jumped to nearly USD 14 billion. In 2008, when global FDI inflows were estimated to have fallen by 15%, OFDI from Brazil almost tripled, increasing from just over USD 7 billion in 2007 to nearly USD 21 billion in 2008 (annex figure 1 below). Central Bank data put the current stock of Brazilian OFDI at USD 104 billion, an increase of 89% over 2003. Caution is in order about these figures, however, as in Brazilian outflows it is difficult to separate authentic FDI from purely financial investment under the guise of FDI. According to the most recent data, 887 Brazilian companies have invested abroad
  • Topic: Development, Economics, International Political Economy, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Brazil, Latin America
  • Author: Philip I. Levy
  • Publication Date: 10-2009
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Bilateral free trade agreements have generally been analyzed as instances of preferential reciprocal tariff liberalization. Viewed through this lens, such agreements raise concerns both about new competition and about trade diversion. The United States-Peru Trade Promotion Agreement, an example of a serious North-South accord, demonstrates that new market access was not a principal Peruvian goal in the trade negotiations. Instead, the agreement was intended to encourage investment by locking in Peru's economic reforms. This motivation has very different implications for the global trading system than a quest for preferential access.
  • Topic: International Trade and Finance, Markets, Treaties and Agreements
  • Political Geography: United States, Latin America, Peru
  • Author: Alejandro Foxley
  • Publication Date: 07-2009
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: No country has proved immune to the devastating effects of the current global financial crisis. But the middle-income countries of Eastern Europe, Latin America, and East Asia, which previously had achieved significant progress—economically and socially—have shown themselves to be particularly vulnerable. The crisis has highlighted important lessons for these countries, which inhabit a twilight zone between the developed and developing worlds?and those that aspire to join their ranks—as they rebuild.
  • Topic: Economics, International Trade and Finance, Monetary Policy, Financial Crisis
  • Political Geography: Europe, East Asia, Latin America
  • Author: Alejandro Foxley
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: The global financial crisis has reignited the fierce debate about the roles of the market and the state in modern economies. Latin America, in particular, revisits this debate every time it suffers an external shock. While some blame unregulated markets, others fault states' inability to design institutions or implement policies capable of neutralizing the negative impact of these shocks on output, employment, and social welfare.
  • Topic: Economics, International Trade and Finance, Financial Crisis
  • Political Geography: Latin America
  • Author: Luís Afonso Lima, Octavio de Barros
  • Publication Date: 08-2009
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The internationalization of Brazilian companies is a relatively recent phenomenon. From 2000 to 2003, outward foreign direct investment (OFDI) averaged USD 0.7 billion a year. Over the four-year period 2004−2008, this average jumped to nearly USD 14 billion. In 2008, when global FDI inflows were estimated to have fallen by 15%, OFDI from Brazil almost tripled, increasing from just over USD 7 billion in 2007 to nearly USD 21 billion in 2008 (annex figure 1 below). Central Bank data put the current stock of Brazilian OFDI at USD 104 billion, an increase of 89% over 2003. Caution is in order about these figures, however, as in Brazilian outflows it is difficult to separate authentic FDI from purely financial investment under the guise of FDI. According to the most recent data, 887 Brazilian companies have invested abroad.
  • Topic: Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Brazil, Latin America
  • Author: Michael Mortimore, Carlos Razo
  • Publication Date: 08-2009
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Despite the global crisis, outward FDI by Latin American firms grew by more than 40% in 2008. The picture for 2009 is less clear, due to the expected regional GDP contraction, falling commodity prices, and tightening credit markets. Nonetheless, the authors argue that many countervailing factors make Latin American investment more resilient in the crisis than other regions may be.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Latin America
  • Author: Lorenzo Cotula
  • Publication Date: 06-2009
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Over the past 12 months, large-scale acquisitions of farmland in Africa, Latin America, Central Asia and Southeast Asia have made headlines in a flurry of media reports across the world. Lands that only a short time ago seemed of little outside interest are now being sought by international investors to the tune of hundreds of thousands of hectares.
  • Topic: Agriculture, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Africa, Latin America
  • Author: Cristina Fernández
  • Publication Date: 09-2009
  • Content Type: Video
  • Institution: Columbia University World Leaders Forum
  • Abstract: This World Leaders Forum program features a keynote address by Cristina Fernández de Kirchner, President of Argentina, followed by a question and answer session with the audience.
  • Topic: International Trade and Finance, International Affairs, Bilateral Relations
  • Political Geography: Argentina, Latin America
  • Author: Silvina María Romano
  • Publication Date: 09-2008
  • Content Type: Working Paper
  • Institution: CONfines de Relaciones Internacionales y Ciencia Política
  • Abstract: El siguiente trabajo se centra en las relaciones entre Argentina y Brasil y el rol que cada uno de estos países desempeñó en el marco del proceso de integración institucionalizado en la Asociación Latinoamericana de Libre Comercio (ALALC) a principios de 1960, teniendo en cuenta la incidencia del gobierno norteamericano en orden a su condición de potencia hegemónica continental. El centro de reflexión lo constituyen las relaciones entre Argentina y Brasil por ser los países de mayor gravitación en el Cono Sur, considerando que, históricamente, se han desarrollado de manera complementaria o, a veces, contradictoria con respecto a la política exterior de las grandes potencias, siendo Estados Unidos el gobierno que demostró mayor gravitación en la región durante el período abordado (Rapoport y Laufer, 2000).
  • Topic: Conflict Resolution, International Trade and Finance, Regional Cooperation
  • Political Geography: Brazil, Argentina, Latin America
  • Author: Paulina Ennis
  • Publication Date: 01-2008
  • Content Type: Working Paper
  • Institution: Institute for Latin American and Iberian Studies at Columbia University
  • Abstract: The aim of this thesis is to provide actionable recommendations for banks to target the Mexican immigrant market. To achieve this, I analyze survey data collected from the Mexican immigrant population to amplify a subject commonly seen from a sociological viewpoint – the immigrants' use of bank accounts with the objective of accumulating money to send home. Specifically, the objective of this paper is to answer the following questions: Does having a bank account entail larger amounts of savings sent to Mexico at the end of the migration spell? What is the profile of a bank account user within the Mexican migrant population? What does this mean in terms of targeting the Mexican migrant market?
  • Topic: Economics, International Trade and Finance, Markets, Migration
  • Political Geography: Latin America, Mexico
  • Author: Karl Sauvant
  • Publication Date: 11-2008
  • Content Type: Working Paper
  • Institution: Institute for Latin American and Iberian Studies at Columbia University
  • Abstract: With $1.8 trillion (according to UNCTAD), world foreign direct investment (FDI) flows reached an all-time high last year. All major regions benefitted from increased flows. But that was then. What is, and will be, the impact of the financial crisis and the recession on FDI flows this year and next?
  • Topic: Economics, International Political Economy, International Trade and Finance
  • Political Geography: Africa, Russia, Central Asia, Latin America
  • Author: Liliana Rojas-Suarez
  • Publication Date: 06-2007
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The depth of and access to financial services provided by banks throughout Latin America are extremely low in spite of its recognized importance for economic activity, employment and poverty alleviation. Low financial depth and access hurts the poor the most and is due to a variety of obstacles that are presented in this paper in four categories, along with recommendations to overcome them. The first category groups socio-economic obstacles that undercut the demand for financial services of large segments of the population. The second category identifies problems in the operations of the banking sector that impedes the adequate provision of financial services to households and firms. The third category captures institutional deficiencies, with emphasis on the quality of the legal framework and the governability of the countries in the region. The fourth category identifies regulations that tend to distort the provision of banking services. Recommendations to confront these obstacles include innovative proposals that take into consideration the political constraints facing individual countries. Some of the policy recommendations include: public-private partnerships to improve financial literacy, the creation of juries specialized in commercial activities to support the rights of borrowers and creditors, and the approval of regulation to allow widespread usage of technological innovations to permit low-income families and small firms to gain access to financial services.
  • Topic: Development, Economics, International Trade and Finance, Poverty
  • Political Geography: Latin America
  • Author: Janie Hulse
  • Publication Date: 09-2007
  • Content Type: Working Paper
  • Institution: The Strategic Studies Institute of the U.S. Army War College
  • Abstract: In April 2005 when the Western Hemisphere Subcommittee of the House International Relations Committee met to discuss Chinese involvement in Latin America, administration officials tended to downplay Chinese engagement in the region except in areas related to communications and intelligence. Indeed, globalization, new technologies, and growing Chinese information warfare capabilities make the United States particularly vulnerable to Chinese activity in these strategic areas. China's recent success in Argentina's telecommunications and space industries exemplifies China's increasing effectiveness in strategic developing markets and raises concerns regarding increasing U.S. reliance on international information networks.
  • Topic: International Trade and Finance
  • Political Geography: China, Argentina, Latin America
  • Author: Salvador Rivera
  • Publication Date: 08-2007
  • Content Type: Working Paper
  • Institution: Independent Institute
  • Abstract: Since the end of the Second World War the United States has zealously pursued internationalism, the policy of establishing a new economic and political order based on free trade. Internationalism views the world as one community. It seeks to create a common body of political, economic and social values with an emphasis on human rights, environmentalism and the expansion of democracy.
  • Topic: Economics, International Trade and Finance, Regional Cooperation
  • Political Geography: United States, Latin America
  • Author: George Vojta
  • Publication Date: 06-2007
  • Content Type: Working Paper
  • Institution: Media Tenor International
  • Abstract: Media Tenor: Even within the BRIC States one cannot say that all three are on the Media Agenda, not mention developing countries. What could be the reason for this salience? Vojta: My sense is that the four BRIC countries are rising in media visibility as they become more significant players in the global system. Very shortly these four countries will surpass the G7countries in annual absolute growth results.
  • Topic: Development, Economics, International Trade and Finance, Infrastructure
  • Political Geography: Russia, China, South Asia, Latin America
  • Author: Roger Noriega
  • Publication Date: 08-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: U.S. policy in Latin America and the Caribbean always seems to inspire criticism: Too much, too little, too late. Back off. Get in the game. Don't just stand there, do something. Don't do something, just stand there. Our geographic closeness has meant a rich, natural partnership, but this proximity easily stirs concerns over sovereignty. When the United States is preoccupied with events in other parts of the world, regional pundits accuse Washington of indifference. If we speak clearly on the issues in Latin America, we are excoriated for poking our nose “where it doesn't belong.” So where does this leave U.S. foreign policy in the region? It could be that what we do may not be as important as how we do it. The first step in developing a new paradigm for engaging the Americas is using the 2008 election cycle here at home to develop a serious domestic constituency for our policy. Then we should shape that policy through a conscientious dialogue with stakeholders in the region.
  • Topic: International Trade and Finance, Political Economy, Regional Cooperation
  • Political Geography: United States, America, Washington, Moscow, Latin America
  • Author: Jonathan Di John
  • Publication Date: 07-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Taxation provides one of the principal lenses in measuring state capacity, state formation and power relations in a society. This paper critically examines three main approaches (economic, administrative and political economy) to understanding taxation. It also examines differences in tax composition across middle-income developing regions and finds that Latin American economies tax upper income groups much less than in East Asia and Eastern Europe, and explores the political economy and policy implications of these differences. The paper also examines issues of tax reform in low income/post-war economies and explores the problem that capital flight poses for less developed countries.
  • Topic: Development, International Trade and Finance, Political Economy, Third World
  • Political Geography: Eastern Europe, East Asia, Latin America
  • Author: Sanjay Reddy, Camelia Minoiu
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: Institute for Social and Economic Research and Policy at Columbia University
  • Abstract: This paper examines the phenomenon of real-income stagnation (in which real-income growth is uninterruptedly negligible or negative for a sizable sequence of years). The authors analyze data for four decades from a large cross-section of countries. Real income stagnation is a conceptually distinct phenomenon from low average growth and other features of the growth sequence that have been previously considered. The authors find that real income stagnation has affected a significant number of countries (103 out of 168), and resulted in substantial income loss. Countries that suffered spells of real income stagnation were more likely to be poor, in Latin America or sub-Saharan Africa, conflict ridden and dependent on primary commodity exports. Stagnation is also very likely to persist over time. Countries that were afflicted with stagnation in the 1960s had a likelihood of seventy-five percent of also being afflicted with stagnation in the 1990s.
  • Topic: Economics, International Political Economy, International Trade and Finance
  • Political Geography: Africa, Latin America
  • Author: Pablo Heidrich
  • Publication Date: 02-2005
  • Content Type: Working Paper
  • Institution: Center for International Studies, University of Southern California
  • Abstract: Argentina and Brazil suffered grave financial crises during the 1990s. During that time, they were involved in trade negotiations with each other inside Mercosur. As the financial crises struck one or the other country, their negotiating positions varied from accommodating to aggressive, leading to peaks of confrontation from which Mercosur has not quite recovered yet. Furthermore, those crises provoked a large number of trade disputes as protectionism from both countries grew when the crises increasingly hurt their economies.
  • Topic: Economics, International Trade and Finance, Political Economy
  • Political Geography: Brazil, Argentina, Latin America
  • Author: Raúl Zibechi
  • Publication Date: 11-2005
  • Content Type: Policy Brief
  • Institution: Foreign Policy In Focus
  • Abstract: Although every Latin American government pays lip service to integration, taking the concrete steps needed to attain it is much more difficult than simply issuing declarations. In the wake of the collapse of the Free Trade Agreement of the Americas (FTAA), Latin America faces the dilemma of remaining divided and at the mercy of the interests of the great powers, or setting out on the road to continental unity. Even if the forces in favor of integration prevail, the type of integration to be constructed remains to be defined.
  • Topic: Government, International Trade and Finance, Regional Cooperation
  • Political Geography: South America, Latin America
  • Author: Laura Carlsen
  • Publication Date: 11-2005
  • Content Type: Policy Brief
  • Institution: Foreign Policy In Focus
  • Abstract: The stage was set for a showdown. When the Bush cabinet announced intentions to revive the moribund Free Trade Area of the Americas at the Fourth Summit of the Americas in Mar del Plata, the countries of the Southern Common Market closed ranks to prevent it. What followed was a diplomatic melee that reflects not so much divisions within Latin America, as a growing resistance to the current free trade model throughout the developing world.
  • Topic: Economics, International Trade and Finance
  • Political Geography: South America, Latin America, North America
  • Author: Martin Kenney, James Curry, Oscar Contreras
  • Publication Date: 06-2004
  • Content Type: Working Paper
  • Institution: Berkeley Roundtable on the International Economy
  • Abstract: The Internet will be the defining technology of the first decade of the 21st Century. It is redefining boundaries of all sorts in new and unforeseen ways. As with many previous disruptive technologies, the Internet can be a double-edged sword for developing countries such as Mexico. For example, the Internet has the potential to dramatically lower barriers to cross-border trade. This will enable international retailers to penetrate the Mexican market potentially undermining domestic retail businesses. On the other side, the Internet could provide opportunities for Mexican firms to enter the global market, particularly Spanish-speaking Latin America and the huge U.S. Hispanic market. But this is only the tip of the iceberg of change. For example, in a country such as Mexico in which information has not been readily available and public libraries are relatively few in number and poorly stocked, the free and low-cost information available on the Internet provides a powerful new distribution medium – it provides inexpensive access to global information sources.
  • Topic: Industrial Policy, International Trade and Finance, Science and Technology
  • Political Geography: United States, Latin America, Central America, North America, Mexico
  • Author: Kevin Casas-Zamora
  • Publication Date: 01-2004
  • Content Type: Working Paper
  • Institution: Academy of Political Science
  • Abstract: As in most Latin American countries, the funding of political activities has only recently become a matter of serious concern in Guatemala. Long known for its chronic political instability, the country has limited experience in the observance of basic democratic practices such as regular and reasonably free and fair elections. Even today, the regulation of political finance remains under the shadow of other pressing and as yet unresolved political issues such as the extraordinary weakness of parties, the consistently high abstention rates and the practical disenfranchisement of the indigenous majority.
  • Topic: International Relations, International Trade and Finance, Political Economy
  • Political Geography: South America, Latin America, Guatemala
  • Author: Jacob Steinfeld
  • Publication Date: 07-2004
  • Content Type: Policy Brief
  • Institution: Carnegie Endowment for International Peace
  • Abstract: FOREIGN DIRECT INVESTMENT (FDI) HAS TRANSFORMED MEXICO'S BANKING SYSTEM during the past decade, making it the second largest in Latin America with $165 billion in commercial assets in 2003. In the past four years, Mexico received $25.3 billion of FDI into its financial sector. This composes nearly 40 percent of total FDI inflows into the country. As a result of FDI flowing into the country's financial sector, the Mexican banking system has the highest ratio of foreign ownership in Latin America.
  • Topic: Economics, International Trade and Finance, Political Economy
  • Political Geography: Latin America, Mexico
  • Author: Steve H. Hanke
  • Publication Date: 07-2004
  • Content Type: Policy Brief
  • Institution: The Cato Institute
  • Abstract: After a decade of rapid economic growth, the Dominican Republic entered a downward spiral in 2003. The economy shrank for the first time since 1990, the inflation rate quadrupled, the Dominican peso collapsed, government debt more than doubled, interest rates soared, and the central bank incurred large losses.
  • Topic: Economics, International Trade and Finance, Political Economy
  • Political Geography: Latin America, Caribbean
  • Author: Mark Falcoff
  • Publication Date: 08-2004
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: This series began more than a dozen years ago with an essay titled "U.S.-Latin American Relations: Where Are We Now?" Since this is the last issue of Latin American Outlook, it seems worthwhile to pose the question again.
  • Topic: International Relations, International Trade and Finance, Political Economy
  • Political Geography: South America, Latin America, Central America
  • Author: Mark Falcoff
  • Publication Date: 05-2004
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The March presidential election in El Salvador, in which the conservative ARENA (Alianza Republicana Nacionalista) Party won its fourth consecutive victory in fifteen years, invites serious consideration and analysis. At a time when many governments in Latin America are being voted out of office by anti-establishment (and sometimes, anti-party) candidates, and attacks on "neo-liberalism" and globalization are increasingly the order of the day, El Salvador seems to be swimming strongly against the tide. What lies behind this anomaly?
  • Topic: International Relations, International Trade and Finance, Political Economy
  • Political Geography: Latin America, Central America, El Salvador
  • Author: Mark Falcoff
  • Publication Date: 04-2004
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The collapse of President Jean-Bertrand Aristide's government in Haiti and his unseemly flight out of the country may have come as a surprise to Americans and others who were not watching closely. It could not have been unexpected by those who were. Haitian history tends to repeat itself, and after a long detour, the circle closed once again. Even the sudden occupation of the country by a multinational force headed by the U.S. Marines is not without precedent. The big question is whether this time the cycle of failure will be broken.
  • Topic: International Relations, International Trade and Finance, Political Economy
  • Political Geography: United States, Latin America
  • Author: Mark Falcoff
  • Publication Date: 03-2004
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Anyone who follows the Latin American news—even out of the corner of one eye—must be aware of the fact that Colombia, one of South America's largest and most strategically and economically important nations, has been bogged down for more than a decade in a seemingly intractable civil conflict. The term "civil war" is a misnomer in this case, to the extent that it suggests that roughly equal forces are confronting one another. The Colombian case is less dramatic than this but far more complex. On one hand there is the Colombian state and most ordinary citizens—some 40 million of them; on the other, two guerrilla groups, the most important of which, the Revolutionary Armed Forces of Colombia (FARC), can count on roughly 17,000 armed militants. The failure of the Colombian state to provide basic security from the guerrillas, particularly in rural areas, led during the last two decades to the more or less spontaneous creation of the so-called Autonomous Defense Forces—paramilitary forces, or "paras," for short—whose ranks today number 13,000. While the FARC and other self-styled guerrilla formations claim to be fighting for a Marxist revolutionary project, their ideology is largely decorative. In fact they are thugs for whom violence is a way of life and has been for many years. They specialize in kidnappings and murders. The FARC alone has kidnapped more than a thousand people—politicians (including former presidential candidate Ingrid Betancourt), soldiers, and police, presumably to win release of about five hundred militants captured by government forces. What makes the FARC an enduring phenomenon is not that it enjoys much popular support, but that, because it engages in drug trafficking on a monumental scale, it is perhaps the most economically self-sufficient insurgency in the history of Latin America.
  • Topic: International Relations, International Trade and Finance, Political Economy
  • Political Geography: Colombia, South America, Latin America
  • Author: Mark Falcoff
  • Publication Date: 01-2004
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Probably more than any other Latin American country, the Argentine Republic is susceptible to abrupt changes of spirit and mood. Ten years ago it was apparently hurling itself, pell-mell, into the twenty-first century as South America's great example of economic liberalization and diplomatic alignment with the United States. Today both notions are distinctly out of fashion there, and no wonder—the advantages of both were drastically oversold to the public by the administration of President Carlos Menem (1989-1999). At the end of 2000 the economy virtually collapsed; for a time it appeared as if the country might actually dissolve as a coherent political community. Thanks to the strong hand of Senator Eduardo Duhalde, who took over at the end of 2000 from Fernando de la Rúa, Menem's successor, civic order was restored, though the last three years have been the worst in Argentina's modern history, more dismal even than the Great Depression of the 1930s.
  • Topic: International Relations, International Trade and Finance, Political Economy
  • Political Geography: United States, Argentina, South America, Latin America
  • Author: Jeffrey J. Schott
  • Publication Date: 08-2003
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: The United States and Brazil are the largest economies in North and South America, respectively. A generation ago, both were relatively closed economies in terms of the proportion of their trade to gross domestic product (GDP), but for sharply different reasons. The US market was highly competitive except for some light manufactures (e.g., textiles, clothing, and footwear) and a few agricultural sectors with high border barriers. By contrast, Brazilian industry was largely uncompetitive and highly subsidized; important commodities like coffee provided the bulk of exports while a large share of the value of most industrial exports was attributable to export subsidies.
  • Topic: International Trade and Finance
  • Political Geography: United States, Brazil, South America, Latin America, Caribbean
  • Author: Gary Hufbauer, Jeffrey J. Schott
  • Publication Date: 06-2003
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: Drawing on the 1989 Canada-US Free Trade Agreement (CUSFTA), the North American Free Trade Agreement (NAFTA) extended dispute settlement provisions to cover more ground. In fact, within NAFTA there are six dispute settlement systems. NAFTA Chapter 11 is designed to resolve investor-state disputes over property rights; Chapter 14 creates special provisions for handling disputes in the financial sector via the Chapter 20 dispute settlement process (DSP); Chapter 19 establishes a review mechanism to determine whether final antidumping (AD) and countervailing duty (CVD) decisions made in domestic tribunals are consistent with national laws; and Chapter 20 provides government-to-government consultation, at the ministerial level, to resolve high-level disputes. In addition, the NAFTA partners created interstate dispute mechanisms regarding domestic environmental and labor laws under the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAAL C), respectively. This chapter examines the first four dispute settlement systems; the NAAEC and NAALC systems are evaluated elsewhere in this book.
  • Topic: Economics, International Trade and Finance
  • Political Geography: United States, Latin America, North America
  • Author: Jonathan P. Doh
  • Publication Date: 12-2003
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: Government subsidies are a pervasive problem for international trade and economic development. Subsidies distort investment decisions, generally squander scarce public resources, skew public expenditures toward unproductive uses, unfairly discriminate against efficient industries and firms, and prompt wasteful overconsumption of some products over others. Despite efforts to limit subsidies through trade and investment policy disciplines, subsidization remains a constant on the global trade policy and international business landscape.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: South America, Latin America, Central America, Caribbean, North America
  • Author: Earl H. Fry
  • Publication Date: 07-2003
  • Content Type: Working Paper
  • Institution: Center for Strategic and International Studies
  • Abstract: At the end of 2003, the North American Free Trade Agreement (NAFTA) will have been in effect for a decade, and although the accord will not be fully implemented for another five years, almost all of its important provisions are already in place. The model for NAFTA was the Canada-U.S. Free Trade Agreement (CUSFTA), which was put in motion in 1989 and was to be fully implemented within 10 years but was superseded by NAFTA after only five years in operation. NAFTA itself has created the world's largest free-trade area, encompassing the United States, Mexico, and Canada; 21.3 million square miles of territory; 422 million people; almost $12 trillion in yearly production; and $615 billion in annual three-way merchandise trade. North American trade, investment, government-to-government, and people-to-people exchanges have increased dramatically over the past decade and decisionmakers in Washington, D.C., Mexico City, and Ottawa will soon have to consider whether continental economic integration should move to the next level in the form of a customs and monetary union or even a common market possessing many of the attributes of the European Union (EU).
  • Topic: Economics, International Trade and Finance
  • Political Geography: United States, Europe, Canada, Latin America, Central America, North America, Mexico, Ottawa
  • Author: Thomas Andrew O'Keefe
  • Publication Date: 02-2003
  • Content Type: Working Paper
  • Institution: The North-South Center, University of Miami
  • Abstract: Almost from the day it was launched on March 26, 1991, skeptics have predicted the imminent collapse of the Common Market of the South (Mercado Común del Sur — MERCOSUR), while some economists have fretted about the project's supposed protectionist designs to create a trade fortress. The most memorable example of the latter was a 1996 report written by a World Bank economist that relied on out-of-date trade statistics and attributed to MERCOSUR policies that were actually pre-existing national automotive regimes. More recent tirades have tried to blame Argentina's economic meltdown on its MERCOSUR membership. A well-known economist from a New York City investment bank has even gone as far as to proclaim MERCOSUR dead. Given all the invective directed against efforts to integrate South America's Southern Cone economically over the past decade, it is not surprising that MERCOSUR is misunderstood by many in North America.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: South America, Latin America, North America
  • Author: Jon Wongswan
  • Publication Date: 09-2003
  • Content Type: Working Paper
  • Institution: U.S. Government
  • Abstract: Using the conditional Capital Asset Pricing Model (CAPM), this paper tests for the existence and pattern of contagion and capital market integration in global equity markets. Contagion is defined as significant excess conditional correlation among different countries' asset returns above what could be explained by economic fundamentals (systematic risks). Capital market integration is defined as the situation in which only systematic risks are priced. The paper uses a panel of sixteen countries, divided into three blocs: Asia, Latin America, and Germany-U.K.-U.S., for the period from 1990 through 1999. The results show evidence of contagion and capital market integration. In addition, contagion is found to be a regional phenomenon.
  • Topic: International Relations, Economics, Globalization, International Trade and Finance
  • Political Geography: United States, United Kingdom, Asia, Germany, Latin America
  • Author: Robert L. Axtell
  • Publication Date: 07-2002
  • Content Type: Working Paper
  • Institution: The Brookings Institution
  • Abstract: Results on the formation of multi-agent teams are reviewed and extended. Conditions are specified under which it is individually rational for agents to spontaneously form coalitions in order to engage in collective action. In a cooperative setting the formation of such groups is to be expected. Here we show that in non-cooperative environments—presumably a more realistic context for a variety of both human and software agents—self-organized coalitions are capable of extracting welfare improvements. The Nash equilibria of these coalitional formation games are demonstrated to always exist and be unique. Certain free rider problems in such group formation dynamics lead to the possibility of dynamically unstable Nash equilibria, depending on the nature of intra-group compensation and coalition size. Yet coherent groups can still form, if only temporarily, as demonstrated by computational experiments. Such groups of agents can be either long-lived or transient. The macroscopic structure of these emergent 'bands' of agents is stationary in sufficiently large populations, despite constant adaptation at the agent level. It is argued that assumptions concerning attainment of agent-level (Nash) equilibrium, so ubiquitous in conventional economics and game theory, are difficult to justify behaviorally and highly restrictive theoretically, and are thus unlikely to serve either as fertile design objectives or robust operating principles for realistic multi-agent systems.
  • Topic: Economics, International Trade and Finance
  • Political Geography: United States, Latin America
  • Author: Timothy R. Gulden
  • Publication Date: 02-2002
  • Content Type: Working Paper
  • Institution: The Brookings Institution
  • Abstract: This paper examines detailed records from the civil conflict in Guatemala between 1977 and 1986. It reveals a number of novel patterns which support the use of complex systems methods for understanding civil violence. It finds a surprising, non-linear relationship between ethnic mix and killing; thereby inviting analysis based on group dynamics. It shows the temporal texture of the conflict to be far from smooth, with a power spectrum that closely resembles that of other, better understood, complex systems. The distribution of incident sizes within the data seems to fall into two distinct sets, one of which, corresponding to "regular" conflict, is Zipf distributed, the other of which includes acts of genocide and is distributed differently. This difference may indicate that that agents of the state were proceeding under different types of orders. These results provide an empirical benchmark for the modeling of civil violence and may have implications for conflict prevention, peace keeping, and the post-conflict analysis of command structures.
  • Topic: Economics, International Trade and Finance
  • Political Geography: United States, Latin America, Central America, Guatemala
  • Author: John Audley, Edward Sherwin
  • Publication Date: 04-2002
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: IN DECEMBER 1994, at the behest of then–U.S. president Bill Clinton, the leaders of the 34 Western Hemisphere democracies convened in Miami for the first comprehensive hemispheric summit in more than 25 years. The assembled heads of state pledged that their countries would forge a path toward regional integration based on four overarching principles: Governments should build strong democratic institutions, prosperity should be promoted through free trade and economic cooperation, poverty and discrimination should be eliminated, and the natural environment should be preserved through policies promoting sustainable development. “Future generations,” Clinton said at the time, “will look back on the Miami summit as a moment when the course of history in the Americas changed for the better.”
  • Topic: Environment, International Trade and Finance
  • Political Geography: United States, America, South America, Latin America, Central America, North America
  • Author: Barry Eichengreen
  • Publication Date: 12-2002
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: Europe's single currency is widely invoked as a potential solution to the monetary and exchange rate problems of other regions, including Asia, Latin America, North America and even Africa. This lecture asks whether the Europe's experience in creating the euro is exportable. It argues that the single currency is the result of a larger integrationist project that has political as well as economic dimensions. The appetite for political integration being less in other parts of the world, the euro will not be easily emulated. Other regions will have to find different means of addressing the tension between domestic monetary autonomy and regional integration. Harmonized inflation targeting may be the best available solution.
  • Topic: Economics, International Trade and Finance, Political Economy
  • Political Geography: Africa, Europe, Asia, Latin America
  • Author: Liliana Rojas-Suarez
  • Publication Date: 07-2002
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: This paper focuses on identifying preconditions that will ensure the sustainability of a Free Trade Area of the Americas (FTAA). It argues that the macro, micro, and political conditions advanced in the literature to measure a country's ability to compete internationally, while necessary, are not sufficient to ensure the success and permanence of a free trade agreement. Instead, two additional financial conditions are needed. The first is that each partner in the free trade area needs to have sustainable public debts as determined by the achievement of credible and sustainable structural fiscal balances. The second is that exchange rate regimes across trading partners should be compatible in the sense that adverse shocks in one country do not generate a policy dilemma in other partners between abandoning their exchange rate system or the free trade area.
  • Topic: Economics, International Trade and Finance
  • Political Geography: South America, Latin America, Central America, Caribbean
  • Author: Graciela Moguillansky
  • Publication Date: 03-2002
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This article studies the currency risk management of multinational companies with investments in Latin American countries. The analysis is centred on episodes of currency or financial shocks, searching into the behaviour of the financial management of a firm expecting a significant devaluation. This allowed us to explore the interaction and transmission mechanisms between the microeconomic behaviour and the macroeconomic impact on the foreign exchange market. The analysis was carried out interviewing financial managers of multinational companies from different sectors with headquarters in the United Kingdom and Spain, by reviewing literature on business and currency risk management, and by analysing some surveys on financial risk management in developed countries.
  • Topic: Economics, International Trade and Finance
  • Political Geography: United Kingdom, South America, Latin America, Spain
  • Author: Ricardo Ffrench-Davis, Guillermo Larraín
  • Publication Date: 01-2002
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: During the Asian crisis, intermediate exchange rate regimes vanished. It has been argued that those regimes were no longer useful and only the extremes remained valid. The paper analyses three foreign exchange regimes: Argentina (pegged), Chile (band) and Mexico (float). The Argentinean currency board delivered low financial volatility while it was credible, but even then it displayed high real volatility. Mexican float performed well in periods of instability isolating the real sector. The Chilean band delivered a mixed outcome as compared to Argentina and Mexico. This is linked apparently to a loss in the band's credibility, associated to policy mismanagement and an over-appreciation in the biennium before the crisis. Optimal exchange rate regimes vary across time and the conjuncture. Exit strategies are part of the election of the optimal system, including a flexible policy package rather than a single rigid policy tool.
  • Topic: Development, International Trade and Finance
  • Political Geography: Asia, Argentina, South America, Latin America, Mexico, Chile
  • Author: Luigi Manzetti
  • Publication Date: 11-2002
  • Content Type: Working Paper
  • Institution: The North-South Center, University of Miami
  • Abstract: In December 2001, Argentina recorded the world's largest default ever, as it failed to honor payments on its US$132 billion foreign debt. Since then, five presidents have been in power, the Argentine peso has been devalued by 120 percent, and the banking system has virtually collapsed, dragging the economy into a depression. The gross domestic product (GDP) contracted 16.3 percent in the first quarter of 2002. Argentina's per capita income has become one of the worst in Latin America, and, as a result, more than one-third of its people live under the poverty line. 1 Argentines' confidence in their elected officials has disappeared. By most accounts, the country has literally imploded to a degree that has no precedent in Latin America's contemporary history. This is particularly bewildering, considering that only 10 years ago Argentina was hailed around the world as a model of successful economic reforms, with standards of living that were not only the highest in the region but comparable to those of some southern European countries. How could Argentina go from role model to international outcast so quickly? Some place the blame on external shocks created by the financial crises in Mexico (1995), Indonesia (1997), Thailand (1998), and Russia (1998). Others say the cause of the problem was misguided policy advice from the International Monetary Fund (Stiglitz 2002). Yet, most analyses ascribe much of the trouble to the Convertibility Law's fixed exchange rate policy adopted in 1991.
  • Topic: Economics, Government, International Trade and Finance
  • Political Geography: Russia, Indonesia, Argentina, South America, Latin America, Mexico, Thailand
  • Author: William Krist
  • Publication Date: 01-2002
  • Content Type: Working Paper
  • Institution: The North-South Center, University of Miami
  • Abstract: Market Access Negotiations are a major element of the efforts to create a Free Trade Area of the Americas (FTAA) by 2020. If successful, these negotiations will remove all tariff and nontariff barriers to trade among the 34 participating countries on all nonagricultural products, including forest and mining products, fish, and manufactured goods.
  • Topic: Development, Environment, International Trade and Finance
  • Political Geography: United States, South America, Latin America, Central America, Caribbean, North America
  • Author: Carol Graham, Paul Robert Masson
  • Publication Date: 11-2002
  • Content Type: Policy Brief
  • Institution: The Brookings Institution
  • Abstract: In recent years, the international financial system has faced tremendous challenges, from the Asia, Russia, and Brazil crises in the late 1990s, to Argentina's default and ensuing economic collapse in 2002 to new worries about a possible default in Brazil. An increasing number of observers are questioning the way the international financial institutions manage these crises. An alternative approach that is endorsed in principle by many—including Horst Köhler, the new managing director of the International Monetary Fund (IMF)—is a move toward more selective lending with fewer conditions, with the decision to lend based on a more general and ultimately political assessment of the recipient government's capacity to deliver on its promises. Argentina provides a potential test bed for this approach.
  • Topic: International Organization, International Trade and Finance
  • Political Geography: Russia, Asia, Brazil, Argentina, South America, Latin America
  • Publication Date: 03-2002
  • Content Type: Policy Brief
  • Institution: Oxford Analytica
  • Abstract: This week's piece examines the impact of the economic crisis on the Argentine banking sector. The collapse of the peso-dollar peg dealt a serious blow to the already weakened Argentine banking system, which now faces a significant restructuring process.
  • Topic: International Organization, International Political Economy, International Trade and Finance
  • Political Geography: Argentina, Latin America
  • Author: Christopher D. Carroll
  • Publication Date: 12-2001
  • Content Type: Working Paper
  • Institution: The Brookings Institution
  • Abstract: Since the foundational work of Keynes (1936), macroeconomists have emphasized the importance of agents' expectations in determining macroeconomic outcomes. Yet in recent decades macroeconomists have devoted almost no effort to modeling actual empirical expectations data, instead assuming all agents' expectations are 'rational.' This paper takes up the challenge of modeling empirical household expectations data, and shows that a simple, standard model from epidemiology does a remarkably good job of explaining the deviations of household inflation and unemployment expectations from the 'rational expectations' benchmark. Furthermore, a microfoundations or 'agent-based' version of the model may be able to explain, in a way that still permits aggregation, stark rejections of the pure rational expectations framework like Souleles's (2002) finding that members of different demographic groups have sharply different predictions for macroeconomic aggregates like the inflation rate.
  • Topic: Economics, International Trade and Finance
  • Political Geography: United States, Latin America