Post Trade Liberalization Policy and Institutional Challenges in Latin America and the Caribbean

With the strong trade reforms in the late 1980s and early 1990s, many countries in the Latin America and the Caribbean region are facing new policy and institutional challenges. On the policy front there are two major challenges. The first is to maintain open trade regimes in the face of continuous pressure to protect one sector or another. The second is to push the trade liberalization agenda further especially in the light of new opportunities for increasing trade with improved market access provided by the Uruguay Round. On the institutional front, the challenges are to adopt existing institutions that were the products of a bygone era of protection to a new era of more open trade and to modernize the trade policy making institutions to reflect the changed rules of international trade following the Uruguay Round. The policy and institutional challenges are closely released. This paper attempts to identify these policy and institutional challenges at the national level for a selected group of Latin American and Caribbean countries, against the backdrop of existing trade regimes that came into being in the last ten years. Not all trade liberalizations were complete. Few sectors continued to be protected and many institutions that were conceived in an earlier era such as trade policy making agencies, procedures and decision mechanisms, rules, laws and regulations have continued. Many of the trade policy related institutions and their processes remain out of step with freer trade. The paper notes that new forms of protection have emerged that attempt to replace the more traditional measures. In the wake of policy reforms, many countries have attempted to improve their trade policy making institutions with varying degrees of success. The paper notes the experiences at the time of trade liberalization, some partial reversals of policy since then and identifies the attributes that are needed to meet the challenges of maintaining open trade regimes and advance the agenda for further liberalization. The paper examines the experiences of Argentina, Chile, Colombia, Jamaica, Uruguay and Trinidad and Tobago in broad terms so as to identify the post trade liberalization challenges, using examples of the evolution of trade regimes and institutional arrangements in these countries to illustrate