Economic Integration in LATAM: A Reality or a Myth?

Topics: International trade, Trade bloc, United States, North American Free Trade Agreement, Economics, Free trade area / Pages: 9 (2217 words) / Published: Mar 21st, 2013
Economic Integration in LATAM: A Reality or a Myth

Oscar R. Martinez

Latin American International Relations

19 March 2013

Integration for Latin American (LATAM) states has been an overarching approach when discussing foreign relations in the western hemisphere. Much of the literature proposed in this class proposes the intentions of LATAM states to integrate at different levels. However, this paper will demonstrate that regional economic integration is formally happening. Yet, it remains weak and inconclusive. Internal bureaucracy and the lack of commitment to these integration efforts overshadow the intentions for economic integration. This paper will examine the different strategic options for economic integration in LATAM, the reason why LATAM states seek for economic integration and most importantly the factors impeding and weakening regional integration in the western hemisphere. This analysis is based on the historical evidence of LATAM states’ behavior and trading trends. To grasp the ongoing economic liberalization policies in LATAM, we must first understand viable strategic options of economic integration for LATAM states.
After the Cold War, Latin America faced a prospect of marginalization. The distinctive economic disadvantages to compete in the world economics presented different strategic integration options that could provide the foundation for long-term development and growth. Peter H. Smith proposed four different economic integration options for Latin America at the beginning of the new millennium: unilateral liberalization, joining with the North, extra-hemispheric partnership, and regional integration. These strategic models accentuated the different available options LATAM states could consider in order to the meet political and economic agendas.
The first strategic option available is the unilateral liberalization of economic programs to strengthen commercial and financial ties with major power centers. This

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