Week 6: Americas Development and Incorporation

Question 1

Key economic and political relationship for Latin America

Answer 1

With the United States.

Question 2

Financial vulnerability in Latin America - Contagion

Answer 2

When financial crisis occurs in one Latin American country, international investors will also withdraw funds from neighbouring countries.

Question 3

ISI model of economic management in Latin America

Answer 3

Centralised model where the state controlled the economy, pursued by most countries during the industrial expansion after World War II (1945-1970).

Question 4

Structural Adjustment Programmes (SAPs)

Answer 4

Economic and social policies dictated by international financial institutions in Latin America (1970-1990). Encapsulated in the Washington Consensus, seeking to dismantle state-controlled institutions (1990s onwards).

Question 5

NAFTA

Answer 5

North American Free Trade Agreement, took effect in 1994, requiring a rethinking of integration by many Latin American countries. Included abolition of tariffs, removal of barriers to services, IP protection, and FDI.

Question 6

USMCA

Answer 6

Replaced NAFTA. Key changes include country of origin rules, labour provisions, greater access for US farmers to the Canadian market, IP and digital trade, removal of a trade loophole, and a sunset clause.

Question 7

Contrasting China’s and Latin America’s development models (Gereffi)

Answer 7

Chinese model: leveraging domestic advantages and upgrading within GVCs, attracting FDI, opening up the economy. Latin America’s ISI model was different.

Question 8

Key links between China and Latin America

Answer 8

Increased bilateral trade, increasing Chinese outward FDI (extractive industries and market-oriented investment), more significant Chinese aid.