Paper Summary:

The paper explores U.S. influence in the form of free trade agreements, including the Washington consensus, NAFTA, CAFTA-DR and the MERCOSUR Accord. The paper also addresses the Cuban crisis and the role of the WTO and IMF. The paper reaches the conclusion that the U.S. has probably aided Latin America in its move away from the unsuccessful policies of import substation towards those of free trade. However, the paper asserts that it may be global changes in line with WTO and IMF policy which will mainly impact Latin America.

From the Paper:

"Since the end of World War II, many of the countries of South America followed a policy of import substitution as a way of attempting to foster economic development. Such policies make use of high tariffs and other trade barriers designed to favour domestic goods over imported goods (Begg et al 2008). Over time, the premise is that industries within a given country will develop to fill the demand for domestic goods which would have previously been imported from over seas at a lower cost. Whilst such a policy was followed with relative success in countries such as Taiwan, Hong Kong and Singapore (Hutchings 2001), the Latin American experiment may be seen as a failure due to small internal markets and a lack of technology facilitating the development of mass production (Griffin and Pustay 2010).
"At this point one may consider how US influence, particularly under the Washington Consensus has been used to facilitate a move away from import substitution policies and towards those of greater levels of free trade and economic development (Gallagher 2008). Broadly speaking the Washington Consensus describes the policy advice given by Washington based institutions to countries within the Latin American era. As with many US based economic aid and advice packages the advice and polices usually includes a call for greater levels of free trade, liberalisation and deregulation of markets and disciplined macroeconomic policies."

Sample of Sources Used:

• Aljazeera. 2009. Obama reaches out to China. Available online at: http://english.aljazeera.net/news/asia-pacific/2009/11/20091116571405498.html [Accessed on 01/04/11].
• Begg, D, Fischer, S, Dornbusch, R. 2008. Economics. 9th ed. London: McGraw-Hill.
• De Witt, B, Meyer, R. 2004. Strategy Process, Content, Context. 3rd ed. Australia: Thomson.
• Economist. 2005. Argentina: Writing of the wreckage. Available online at: http://www.economist.com/node/3714880?story_id=3714880 [Accessed on 03/04/11].
• Frost, M. 2008. United States embargo on Cuba. Available online at: http://www.martinfrost.ws/htmlfiles/july2008/embargo_us_cuba.html [Accesed on 01/04/11].

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