Trade pacts fall short. (Book Review).

Two developments--regionalism in Latin America and the multilateral trade system--are the subjects of this book by Maria Cristina Rosas, a social sciences professor at the Universidad Nacional Aut6noma de Mexico. Regional trade pacts such as Mercosur have not satisfied the needs of development in Latin American countries, she argues, and the global trade system blocks Latin America from total access to the markets of industrialized nations. Such access, reciprocal--or, better still, preferential--is vital for Latin America's economic liftoff. But protectionism by the developed world obstructs progress.

Paradoxically (some would say cynically), since the end of the Cold War the advanced countries have preached and imposed economic liberalization on underdeveloped countries while maintaining strong protectionist measures against foreign products. They have done so by alleging concerns about sanitation, dumping and political agendas. Rosas details how the advance of globalization by means of its primary method, deregulation, weakens national autonomy. Reduced autonomy not only implies that governments have less power to control events within their borders, but it also robs them of the ability to negotiate at the international level.

Rosas argues that economic decisions increasingly fall into the hands of transnational companies. There is a "privatization of the decision-making process on a planetary scale," she says. While constant supervision is exerted on governments, above all on the less-developed economies so that they do not restrict economic liberalization, oversight of big companies diminishes or disappears. The author cites the arrival of monopolies like Microsoft to support her case.

Rosas' book springs from her doctoral thesis and is backed by long and meticulous research and tables and data from economic and social indicators in Mexico, as well as from other Latin American countries.

The work also contains a useful compendium of organizations, agreements and trade balances, as well as an evaluation of the first seven years of the North America Free Trade Agreement. Many analysts say it is too soon to form a judgment on Nafta, but Rosas suggests it is possible to make certain observations, among them that the huge expectations that accompanied the pact have been modified to more limited expectations.

The agreement ushered in a remarkable increase in trade among its three main partners-the United States, Mexico and Canada In tandem, however, greater interaction exacerbated certain problems, including increased Mexican immigration into the United States and a rise in drug trafficking.

Rosas concludes on a pessimistic tone: With the failure of the third ministerial summit of the World Trade Organization in Seattle in late 1999, developing countries lost the possibility to promote their economic interests before the block of developed nations. Although the book was written before the fourth WTO summit in Doha, Qatar, the author believes the multilateral trade system is in crisis and she doesn't put much hope in Doha.

"Latin America and the Caribbean face greater uncertainties now," she writes. Latin America is in "limbo," awaiting an extraordinary event or a miracle that starts a new dynamic and encourages new hope. That event could be a quick implementation of the Free Trade Area of the Americas, an enormous effort to unify the continent in a framework of free trade that, at the moment, seems to have slammed on its brakes.

Whatever the new path, Rosas concludes, it's vital to remember that "the final purpose of economic activity is not the submission of the society to the service of the market, but the opposite." Or as Charles Pasqua, France's former interior minister, said years ago: "What matters is not the market; what matters is people."

The International Economy in the 21st Century: The WTO, the United States and Latin America

By Maria Cristina Rosas

Universidad Nacional Autonoma

de Mexico

US$30