The OECD & Trade in Latin America

This research paper discusses recent changes in the level, composition and orientation of the trade of the nations of Latin America (Central and South America, excluding the Caribbean area) and the special role being played recently by the Organisation for Economic Co-operation and Development (OECD) in facilitating that trade expansion. With a number of exceptions, the international, including intra-regional, trade of the principal Latin American nations has expanded during the past decade, reflecting changes in the global economy and the revitalization through structural reform of domestic economies in a number of countries. International financial assistance and private capital flows, primarily direct foreign private investment (FDI), from the developed world have played an important role in improving the trading and balance of payments positions of the major Latin American countries. OECD has become more involved with Latin America because of rising levels of Western European trade, lending and investment there and the common interest of all the members of OECD in leveling the playing field for FDI in Latin America and removing barriers to further expansion of international trade and development involving that region.

Traditional International Trade Environment

During most of the late 19th and 20th centuries, all of the Latin American nations served as a source of raw materials, mineral resources and agricultural

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to $159 billion just in three years, 1990-1992. Latin America's share of the increase in these private capital flows increased from $17 billion in 1991 to $38 billion in 1995. Latin America's share of FDI in less developed countries, exclusive of portfolio investments, declined from 35.2 percent in 1981-1985 to 32.2 percent in 1986-1990 and, including the Caribbean area, skyrocketed to 76 per cent in 1990-1995. In the modern global economy the significance of international investment to international trade is considerable. As American Ambassador Larson puts it: "In the past many saw foreign direct investment as a substitute for international trade; later it was viewed as a complement to trade. Today companies see trade and investment as inextricably intertwined; they invest in order to trade and they trade in order to invest." (3) Steps Taken by Some Latin American Governments to Enact and Implement Structural Reforms. The package of structural internal reforms which IMF proposed to all Latin American governments as a condition to its financial assistance includes various austerity measures, such as internal budget restraint, forced domestic saving, curtailment of unnecessary imports and privatization programs, which are d
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Approximate Word count = 3380
Approximate Pages = 14 (250 words per page)