Chapter 6: Regionalism in the Western Hemisphere
1. THE GLOBALISM AND REGIONALISM DICHOTOMY During the preceding quarter century, the dual forces of globalism and regionalism have been affecting the economies of Latin America. In a striking contrast to Asia, regional integration initiatives have long been part of the landscape here. They flourished in the early post-war era, but then lost momentum. In the mid-1980s, a new wave of regional integration began. It could be considered the resurgence of regionalism in Latin America, which coincided with the global phenomenon of ‘new regionalism’. The strong postwar preference of the United States for multilateralism, as opposed to regionalism, is well recorded. A tectonic shift in US strategy towards regional trading blocs took place in 1985, when President Ronald Reagan instructed the office of the United States Trade Representative, Department of Commerce, to explore just how crucial regional and bilateral agreements were for global trade liberalization. This development had far-reaching repercussions. During this period, regional economies began reducing tariff barriers unilaterally. By the late 1990s, average tariff rates came down to 12 percent, from 40 percent in the mid-1980s. The regional economies were active participants in the Uruguay Round and by the end of the 1990s all of them had become members of the World Trade Organization (WTO). Along with these global measures, 22 regional trade agreements were entered into force in Latin America between 1990 and 2001, or old ones were renegotiated.1 Upgrading and revision of several past accords, which had lost momentum, was also undertaken during this period. Some...
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