REVIEW OF "TRADING AWAY STABILITY AND GROWTH: UNITED STATES TRADE AGREEMENTS IN LATIN AMERICA"

REVIEW OF “TRADING AWAY STABILITY AND GROWTH: UNITED STATES TRADE AGREEMENTS IN LATIN AMERICA”

This paper is based on three key points; the first one is the official modeling estimate regarding the benefits of FTA’s between the US and other LAC nations. The second part is the costs of such agreements in the terms of lost of policy. The third one is despite the costs of such agreements the ability to generate dynamic comparative advantages because of the sense of urgency to sign these agreements in order to be competitive.

The first section talks about the benefits that countries like, Latin American countries, will enjoy by signing FTA’s with the United States which is a much larger nation than them. The paper explains the motives behind this consistent rush towards liberalizing markets which is lead by smaller countries, the motives behind this trend are a more competitive edge against other competitor towards a larger market to sell their mostly untransformed goods (mainly commodities, and light manufactured goods), to stimulate the internal demand to create easier access to a more diverse selection of goods and services for the average consumer, to attract foreign capital since the signing of a FTA with the United States is a major endorsement of confidence in a countries government and its capital assets, lastly to stimulate the economy by attracting direct investments that will create jobs, transfer technology and create a general wealth within the country. On the other hand the reasons behind the United States is interested in signing FTA’ are to solidify its current comparative advantages in high tech manufacturing goods, services, agriculture that can be achieved by securing more market access in LAC for those goods and protecting that access through further regulations on intellectual property, investment rules, services regulation and more.

The second section of the paper talks the problems that the singing of this treaty will create problems like the ones described by Nicola Philips on page 26 which he describes: “The ideological dimensions of a regional project are often overlooked in a focus on the technical detail of trade negotiations and the political bargaining processes under way in the region, but they are crucial to an understanding of the nature and the politics of the emerging regional economic regime. More specifically… The U.S. led approach of a distinctly “hub and spoke” set of regionalist arrangements, as a key means by which to capture control of the governance agenda and to ensure that the regional economic regime takes a form consistent U.S interest and preferences. The growing prioritization to bilateralism has become the predominate strategy to this end. The leverage afforded to the U.S by the bilateral negotiations of trade agreements acts to stimulate primary influence over the shape of the rules that constitute the regime, and the primary functions

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