Regional integration in the 1990s

The renewed interest sparked by the potential for intraregional cooperation in Latin America and the Caribbean today has been reflected in numerous agreements regarding trade preferences and in attempts to establish free trade areas, customs unions or common markets. The possibility has even been discussed of setting up free trade arrangements on a hemispheric scale. This plethora of proposals inevitably raises a great many questions. What is the reason for this renewed interest? Are the differences between the schemes of today and those of the 1960s and 1970s significant enough to avert the obstacles and difficulties encountered by those earlier schemes? What are the most suitable mechanisms and instruments for promoting intra-Latin American integration? What are the defining characteristics of the various categories of integration initiatives, such as free trade areas, customs unions and common markets? Is it feasible to set up free trade areas involving countries having very dissimilar levels of development or macroeconomic policies? Would it be wise to work towards a gradual convergence of all these initiatives into a single, regionwide scheme? And most importantly: Just how functional would integration be in terms of the development strategies and policies adopted by the individual countries of the region? The various sections of this article attempt to answer, albeit tentatively, these questions.

Labour market trends and implications of regional integration

Includes bibliography

Regional integration in Latin America, globalization and South-South trade

Includes bibliography

The employment situation in Latin America and the Caribbean: Crisis in the labour markets and countercyclical responses

As predicted in the first bulletin, produced jointly by the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO), the impact of the economic crisis continued to be felt in Latin America and the Caribbean during the second quarter of 2009. Regional exports of goods and services contracted in response to sluggish demand on international markets, while remittances and foreign direct investment flows continued to fall, credit lost its buoyancy and the total wage bill diminished, owing mainly to job losses. As a result, the growth forecasts of many countries had to be adjusted downwards. Since the end of 2008, the countries of the region had started to implement countercyclical policies —albeit with significant differences— in an effort to use public spending to counter flagging investment and consumer-spending levels and boost aggregate demand. In this second bulletin, ECLAC and ILO show how the impact of the crisis has deepened in labour markets in the region in the first half of the year and examine existing options and the outcome of public-infrastructure and emergency employment programmes designed to mitigate the impact of the crisis on the labour market. The unemployment rate has risen in practically all countries compared with the previous year and this situation worsened further in the second quarter, when urban unemployment exceeded the rate of the corresponding period in 2008 by 1 percentage point (to stand at 8.5%, up from 7.5%), while in the first quarter, the variation was 0.6 of a percentage point. Labour indicators also point to an increase in informality, a decline in employment with social protection and a decrease in full-time employment. Labour-market trends observed in the first half-year, together with the forecast for a 1.9% decline in regional GDP in 2009, suggest that the average annual rate of urban unemployment in the region will be close to 8.5%. This forecast is slightly less pessimistic than the estimate given in the first bulletin; this is attributable to the fall in the participation rate in the first half-year to levels that are expected to remain low for the rest of the year. Without this reduction in the labour supply, due largely to the “discouragement effect”, the annual average urban unemployment rate would stand at between 8.8% and 8.9%. Thus, the open urban unemployment figure would increase by 2.5 million and if the “discouraged job-seekers” are included, then the number of additional persons not finding a niche in the urban labour market would climb to 3.2 million. In the region, as in the rest of the world, there are signs that the crisis may have reached bottom in the middle of the year. In many countries, production levels have ceased their decline and there are indications of an incipient recovery leading to cautious optimism that there may be a moderate upturn in labour markets in the fourth quarter. The pace of recovery will vary from one country to the next and is expected to be gradual at best. Even with the return to a growth path, there should be no illusion that the labour problems will immediately disappear. First, the recovery in employment is expected to lag behind the upturn in economic activity. Second, since economic growth is likely to remain moderate in the short term and well below the rates recorded between late 2003 and mid-2008, demand for labour and consequently the generation of good-quality jobs will continue to be weak. Thus, countries should not relax their efforts to defend and create decent jobs, but rather should take steps to improve the effectiveness and efficiency of available instruments. In this way, the region will be in a better position not only to confront the challenges of economic recovery, but also to strengthen the foundations for social inclusion and for advancing under more favourable conditions towards fulfilment of the Millennium Development Goals.

Regional Specialization in Communal Agriculture: The Shakers, 1850- 1880

When the Shakers established communal farms in the Ohio Valley, they encountered a new agricultural environment that was substantially different from the familiar soils, climates, and markets of New England and the Hudson Valley. The ways in which their response to these new conditions differed by region has not been well documented. We examine patterns of specialization among the Shakers using the manuscript schedules of the federal Agricultural Censuses from 1850 through 1880. For each Shaker unit, we also recorded a random sample of five farms in the same township (or all available farms if there were fewer than five). The sample of neighboring farms included 75 in 1850, 70 in the next two census years, and 66 in 1880. A Herfindahl-type index suggested that, although the level of specialization was less among the Shakers than their neighbors, trends in specialization by the Shakers and their neighbors were remarkably similar when considered by region. Both Eastern and Western Shakers were more heavily committed to dairy and produce than were their neighbors, while Western Shakers produced more grains than did Eastern Shakers, a pattern imitated in nearby family farms. Livestock and related production was far more important to the Eastern Shakers than to the Western Shakers, again similar to patterns in the census returns from other farms. We conclude that, despite the obvious scale and organizational differences, Shaker production decisions were based on the same comparative advantages that determined production decisions of family farms.

La actividad hidrocarburífera en la Cuenca del Golfo San Jorge : El papel del empresariado regional

La política económica que se implementó en la década de 1990 tuvo como eje, entre las principales medidas, la apertura de la economía, la privatización de las empresas públicas, el desmantelamiento del aparato estatal y sus agentes reguladores, el ajuste fiscal y del gasto público tanto a nivel nacional, como provincial y municipal, la retirada del Estado Nacional como inversor y subsidiador de actividades económicas, la desregulación del mercado de trabajo y la concentración en grupos 'oligopólicos' de las principales actividades productivas, lo que produjo diferentes impactos en las distintas actividades económicas de la Región Patagónica, dependiendo de su inserción en el mercado interno y externo. En este trabajo se pretende, a partir de una descripción de la evolución de la actividad petrolera y de un estudio de caso, analizar los factores que viabilizan el desarrollo económico local y repensar el papel de los actores sociales en relación con el contexto y con las posibilidades de establecimiento de estrategias de innovación en las sociedades locales. En la primera parte del artículo se hace una caracterización socioeconómica de la región de la Cuenca del Golfo San Jorge. A continuación se observa la evolución de la actividad petrolera dentro de la cuenca, su papel en el mercado de trabajo y su requerimiento de mano de obra; se realiza una caracterización de los principales actores y de su relación con el desarrollo local. En la parte final del artículo se intenta mostrar los desafíos que enfrentan los actores públicos y privados vinculados con la actividad petrolera y su proyección en el corto y mediano plazo

La actividad hidrocarburífera en la Cuenca del Golfo San Jorge : El papel del empresariado regional

La política económica que se implementó en la década de 1990 tuvo como eje, entre las principales medidas, la apertura de la economía, la privatización de las empresas públicas, el desmantelamiento del aparato estatal y sus agentes reguladores, el ajuste fiscal y del gasto público tanto a nivel nacional, como provincial y municipal, la retirada del Estado Nacional como inversor y subsidiador de actividades económicas, la desregulación del mercado de trabajo y la concentración en grupos 'oligopólicos' de las principales actividades productivas, lo que produjo diferentes impactos en las distintas actividades económicas de la Región Patagónica, dependiendo de su inserción en el mercado interno y externo. En este trabajo se pretende, a partir de una descripción de la evolución de la actividad petrolera y de un estudio de caso, analizar los factores que viabilizan el desarrollo económico local y repensar el papel de los actores sociales en relación con el contexto y con las posibilidades de establecimiento de estrategias de innovación en las sociedades locales. En la primera parte del artículo se hace una caracterización socioeconómica de la región de la Cuenca del Golfo San Jorge. A continuación se observa la evolución de la actividad petrolera dentro de la cuenca, su papel en el mercado de trabajo y su requerimiento de mano de obra; se realiza una caracterización de los principales actores y de su relación con el desarrollo local. En la parte final del artículo se intenta mostrar los desafíos que enfrentan los actores públicos y privados vinculados con la actividad petrolera y su proyección en el corto y mediano plazo

La actividad hidrocarburífera en la Cuenca del Golfo San Jorge : El papel del empresariado regional

La política económica que se implementó en la década de 1990 tuvo como eje, entre las principales medidas, la apertura de la economía, la privatización de las empresas públicas, el desmantelamiento del aparato estatal y sus agentes reguladores, el ajuste fiscal y del gasto público tanto a nivel nacional, como provincial y municipal, la retirada del Estado Nacional como inversor y subsidiador de actividades económicas, la desregulación del mercado de trabajo y la concentración en grupos 'oligopólicos' de las principales actividades productivas, lo que produjo diferentes impactos en las distintas actividades económicas de la Región Patagónica, dependiendo de su inserción en el mercado interno y externo. En este trabajo se pretende, a partir de una descripción de la evolución de la actividad petrolera y de un estudio de caso, analizar los factores que viabilizan el desarrollo económico local y repensar el papel de los actores sociales en relación con el contexto y con las posibilidades de establecimiento de estrategias de innovación en las sociedades locales. En la primera parte del artículo se hace una caracterización socioeconómica de la región de la Cuenca del Golfo San Jorge. A continuación se observa la evolución de la actividad petrolera dentro de la cuenca, su papel en el mercado de trabajo y su requerimiento de mano de obra; se realiza una caracterización de los principales actores y de su relación con el desarrollo local. En la parte final del artículo se intenta mostrar los desafíos que enfrentan los actores públicos y privados vinculados con la actividad petrolera y su proyección en el corto y mediano plazo

Why do Countries Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets

More than a third of the World Trade Organization (WTO)-notified services trade agreements (STAs) in effect over January 2008 - August 2015 have involved at least one (South or Southeast) Asian trading partner. Drawing on Baier and Bergstrand's (2004) determinants of preferential trade agreements and using the World Bank's database on the restrictiveness of domestic services regimes (Borchert et.al. 2012), we examine the potential for negotiated regulatory convergence in Asian services markets. Our results suggest that countries within Asia with high levels of pre-existing bilateral merchandise trade and wide differences in services regulatory frameworks are more likely candidates for STA formation. Such results lend support to the hypothesis that the heightened "servicification" of production generates a demand for the lowered service input costs resulting from negotiated market opening.

Intra-regional trade between China, Japan, and Korea : before and after the financial crisis

East Asian economies have been heavily dependent on the U.S. and EU markets, especially for the export of final goods. Therefore, once the financial crisis hit Western economies hard, the East Asian economies lost their major markets.Their production networks then worked to the region's disadvantage and stifled industrial development.This reflects the vulnerability of the East Asian economies which have adopted an export-led growth strategy. Such vulnerability needs to be addressed to prevent future economic crises, as well as to sustain economic growth. This paper examines the trade structure of the three countries-China, Japan, and Korea-before and after the Lehman Shock, and discusses how the three countries should cooperate in addressing imbalances in the trade structure.

China's regional economies and value chains : an interregional input-output analysis

Attempts to understand China’s role in global value chains have often noted the case of Apple's iPhone production, in particular the fact that the value added during the Chinese portion of the iPhone’s supply chain is no more than 4%. However, when we examine the Chinese economy as a whole in global production networks, China’s share in total induced value added by China’s exports of final products to the USA is about 75% in 2005. This leads us to investigate how Chinese value added is created and distributed not only internationally but also domestically. To elucidate the increasing complexity of China’s domestic production networks, this paper focuses on the measure of Domestic Value Chains (DVCs) across regions and their linkages with global markets. By using China’s 1997 and 2007 interregional input-output tables, we can understand in detail the structural changes in domestic trade in terms of value added, as well as the position and degree of participation of different regions within the DVCs.

Understanding traders' regional arbitage : the case of rice traders in Antananarivo, Madagascar

Many studies find that agricultural markets in developing countries are poorly integrated spatially. Traders' regional arbitrage plays a key role in integrating markets across space. We investigate the performance of regional arbitrage and the associated obstacles for rice traders in Antananarivo, Madagascar. On the basis of a trader-level biweekly survey spanning 2012–2013, we find that traders are not fully exploiting the regional arbitrage opportunities: most of them fail to purchase from the cheapest district and are paying higher prices than those in the cheapest district. One apparent obstacle is obtaining price information from many different regions. To reduce search costs, we provided regional price information via SMS to randomly selected traders, but found that this had a null-effect on improving arbitrage performance. Traders tend to concentrate on trading with a few fixed districts, even if they are informed about cheaper prices in other new districts, because they worry about quality uncertainty and the trustworthiness of new partners. These findings suggest that not only transmission of price information but also issues related to produce quality and matching prevent the performance of arbitrage and market integration.

A random utility based multiregional input-output approach to estimate the impact of a new highway on the regional distribution of jobs

This paper addresses the economic impact assessment of the construction of a new road on the regional distribution of jobs. The paper summarizes different existing model approaches considered to assess economic impacts through a literature review. Afterwards, we present the development of a comprehensive approach for analyzing the interaction of new transport infrastructure and the economic impact through an integrated model. This model has been applied to the construction of the motorway A-40 in Spain (497 Km.) which runs across three regions without passing though Madrid City. This may in turn lead to the relocation of labor and capital due to the improvement of accessibility of markets or inputs. The result suggests the existence of direct and indirect effects in other regions derived from the improvement of the transportation infrastructure, and confirms the relevance of road freight transport in some regions. We found that the changes in regional employment are substantial for some regions (increasing or decreasing jobs), but a t the same time negligible in other regions. As a result,the approach provides broad guidance to national governments and other transport-related parties about the impacts of this transport policy.