THE POST COLD WAR-ERA

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THE POST COLD WAR-ERA

• NAFTA and the Gospel of Free Trade

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REQUIRED READING

• Smith, Talons, ch. 7
• Course Reader 3, Blecker and Esquivel, NAFTA,
  Trade, and Development

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PAPER ASSIGNMENT

• Topic Any subject related to U.S.-Latin
  American relations (whether or not covered in
  class)proposed by student and approved by TA
• Examples Sports (e.g. baseball), film
  (depictions of Latina women),
• music (lyrics, popularity of stars, etc.),
  advertising (Corona beer)
• In-class examples Content of Latin American
  nationalism, impacts of drug war (e.g., Plan
  Colombia), reactions to 9/11, Bush relationship
  with Latin leaders, Hugo Chávez phenomenon,
  evaluations of NAFTA
• Length 8-12 double-spaced pages (plus notes or
  bibliography)
• Due Monday, March 1

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FORMAT FOR PAPER

• Introduce topic (and its importance)
• Present a central question
• Describe sources and methods (how will you answer
  your question?)
• Analyze information and data
• Conclusion
• Respond to your central question(s)
• Suggest avenues for further research

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• AFTER THE COLD WAR
• THE GLOBAL ARENA
• Collapse of the Soviet Union
• U.S. military primacy the unipolar moment
• Economic multipolarity Europe, Japan, others?
• Transnationalization and non-state actors
• A third wave of democratization?

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• DIMENSIONS OF UNCERTAINTY
• Distributions of power the layer cake model
• Absence of rules of the game
• Hesitancy in the United States

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ON GLOBALIZATION

• Factors
• End of Cold Warreduction of political barriers
• Communication technologies
• Transnational enterprises production chains and
  consumer markets
• Movement of people and goods, legal and illegal
• Features
• Inexorability, inevitability
• Politics the result of economics
• Inclusion vs. exclusion?
• Claim no ideology

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• THE 1990s GEO-ECONOMICS AND
• INTERMESTIC ISSUES
• Ideological consensus (or end of history?)
• Implausibility of revolution
• Fragmentation of Third World
• The rise of intermestic issues
• Free trade
• Drugs and drug wars
• Immigration

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• THE GOSPEL OF FREE TRADE
• The Lost Decade (1980s) and Its Legacies
• Dynamics of the debt crisis
• The Washington Consensus
• The role of the state
• Liberalization of trade
• Privatization, the private sector, and foreign
  investment

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North American Free Trade (NAFTA)? Why? Why
Then? Global Scenario Economic multipolarity
(Japan, EU) Geopolitical uncertainty Emphasis on
geo-economics U.S. Perspectives Supplement
to FTA with Canada Support for neoliberal reforms
in Mexico Growing Mexican-American population
within U.S. Mexican Perspectives Exhaustion of
alternatives Need to stimulate growth Perpetuation
of Salinista policies
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• NAFTA What Is It?
• A free trade area
• Not a customs union
• Nor a common market
• Characteristics
• Uneven levels of development
• Cultural and political variation
• Hub-and-spoke arrangements (with U.S. at center)
• Absence of supranational authority (preservation
  of sovereignty)

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• Assessing Results The Problem of
  Cause-and-Effect
• NAFTA in comparison with
• Initial expectations (and political rhetoric)
• Liberalization (mid-1980s)
• Global and/or U.S. economic conditions
• Long-term economic and social trends
• Short-term shocks (e.g., Mexican peso crisis of
  1994-95)

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Mexican Exports, 1985-2005(billions USD )
1985 27 bn, 1994 61 bn, 2205 214 bn
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Expansion of Trade, 1993-2005(millions USD )
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U.S. Trade with Mexico and Latin America,
1993-2005 (millions USD )
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U.S. Imports Key Trading Partners, 1993-2005
(millions USD )
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• Economic Performance Expansion of Trade
• General effects
• More efficiency (in production and consumption)
• Greater market size (thus higher returns)
• Tougher competition
• Questions
• Who takes part in the trade? (55 large firms,
  40 maquiladoras, gt 5 small firms ( 2.1
  million firms)
• What about trade diversion?

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Foreign Direct Investment in Mexico, 1980-2004
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GDP Growth in Mexico 1945-1980 6.5 1995
-7.0 1996 5.1 1997 6.8 1998 4.9
1999 3.8 2000 6.6 2001 -0.2 2002
0.7 2003 1.5 2004 4.6 2005 2.8
2006 5.0 2007 3.2 2008 1.3 2009
-6.8 Note Growth does not necessarily reduce
poverty, and often increases inequality.
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Unforeseen Shocks Mexican peso crisis of
1994-95 September 11, 2001 Current
Challenges Expansion of the development
gap Infrastructure (including roads) Migration Ene
rgy Macroeconomic policy (thus dollarization?) S
ecurity problems
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• Key Points of Disputation
• Environmental protection
• Labor rights
• Overall development strategy
• Dependence on United States
• Consolidation of U.S. hegemony

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POLITICAL EFFECTS

• The Public Assertion Free Trade Democracy
• The Silent Bargain International Dimensions
• Political stability and social peace
• Access to petroleum
• Leverage vis-à-vis economic rivals
• Compliance on foreign policy

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Political Consequences (1)
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Political Consequences (2)
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• Now What?
• Routes toward Hemispheric Integration
• Expansion of NAFTA (through new memberships)
• FTAA negotiating process
• Bilaterals and minilaterals
• U.S.-Chile
• U.S.-Central America
• U.S.-Peru
• U.S.-Colombia (?)