The purpose of this research is to examine the issue of free trade between the United States, and Argentina, Brazil, Colombia, Mexico, and Venezuela. Potential free trade between the United States and each of the five countries is considered separately.
Within the context of international regional economic integration, there are five levels (1) free trade area, (2) customs union, (3) common market, (4) economic union, and (5) political union (Grosse, & Kujawa, 1988). Each successive level involves greater integration. At the lowest level of integration, the free trade area, tariffs are eliminated on the trade between the member countries. At the next level, the customs union, common external tariffs are applied to all trade between the member countries and non member countries. The third level, the common market, moves one step further along, and permits the free flow of the factors of production among member countries. At the fourth level, economic union, mone tary and fiscal harmonization among member countries is added to the common market system. The final level, political union, involves the creation of a single government over all member
1 2countries, and the loss of national identity for the individual member states of the union. Only the first level the free trade area is considered in this research with respect to petential free trade between the United States and the five Latin American countries. The Andean Pact is an agreement between a group of South American nations to develop regional economic integration (Grosse, & Kujawa, 1988). The Pact is modeled after the Euro pean Economic Community (EEC); however, neither its institu tions nor its achievements toward regional economic integra tion have approached those of the EEC in scope. For all of its promise, the Andean Pact in reality has not progressed appre ciably beyond the level of a free trade area, although it has developed some manifestations o...