United States Trade and Investment in Latin America: Opportunities for Business in the 1990s

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This work examines the "quiet revolution" that is currently unfolding in Latin America and its likely consequences for US trade and investment with and within that region. Receiving meagre coverage from America's media, a virtual sea change has taken place in Latin America during the past few years. Democratically elected leaders have laboured to extricate their economies from the debt-laden stagnation of the "lost decade" by pursuing far-reaching stabilisation and liberalisation reform programmes. Under President George Bush's proposed Enterprise Initiative for the Americas (EAI) and negotiations toward the formation of a North American Free Trade Area (NAFTA) with Mexico, US economic policy toward Latin America is now in the midst of a dramatic revision that seeks to rectify the neglect of the past and replace it with active encouragement of economic and political change. The authors investigate the forces behind the "lost decade" in Latin America, the adjustment efforts that have emerged in its wake, and the enhanced potential of Latin economies as trade partners and investment outlets under the EAI and NAFTA. They look at these developments in the light of regionalising trends emerging in the global economy at large and argue that stronger ties with Latin America are essential to the future well-being of the United States. After outlining the emergence of global economic regionalism and its likely impact upon the United States and Latin America, the authors trace the origins of the latter's "lost decade" to the debt crisis of the early 1980s, the inadequacy of past international strategies to manage it, and the adoption of strenuous adjustment programmes by Latin nations to deal with both debt repayment and the legacy of misguided development approaches. They show how the EAI is meant to accelerate the movement toward reliance upon free-market forces in Latin America and how the United States is likely to benefit from closer economic ties with the countries of that region. A full account of NAFTA's proposed liberalisation of trade between the United States and Mexico follows, as the authors investigate its origins, examine Mexico's adjustment record, and list the gains that both nations are likely to realise under a free-trade accord. They then look at two sets of Latin economies, the first of which is formed by Chile, Venezuela, Bolivia and Colombia and the second comprising Brazil, Argentina and Peru. While the former are prepared for economic integration with the United States, major problems impair the ability of the latter to become fully-fledged participants in an economic pact with the United States. The analysis presented in the book should be of substantial value to business people, students of world affairs, as well as those with a specific interest in US-Latin relations.

Author Bio

CHRIS C. CARVOUNIS is a Professor of Economics and Finance at St. John's University. He is co-author of U.S. Commercial Opportunities in the Soviet Union: Marketing Production, and Strategic Planning Perspectives (Quorum, 1989), and author of The U.S. Trade Deficit of the 1980s: Origins, Consequences, and Responses (Quorum, 1987), The Foreign Debt/National Development Conflict: External Adjustment and Internal Disorder in the Developing Nations (Quorum, 1986), and The Debt Dilemma of Developing Nations: Issues and Cases (Quorum, 1984). BRINDA Z. CARVOUNIS is an instructor at Rutgers University's New Brunswick campus. She is co-author of U.S. Commercial Opportunities in the Soviet Union: Marketing, Production, and Strategic Planning Perspectives (Quorum 1989).