The Geography of Trade Liberalization: Peru’s Free Trade Continuity in Comparative Perspective

Description

This book answers why anti-trade forces in developing countries sometimes fail to effectively exert pressure on their governments. The backlash against globalization spread across several Latin American countries in the 2000s, yet a few countries such as Peru doubled down on their bets on free trade by signing bilateral agreements with the US and the EU. This study uses evidence from three Latin American countries (Peru, Argentina, and Bolivia) to suggest that geography can play a significant role in shaping trade preferences and undermining the formation and clout of distributional coalitions that seek protectionism. Because trade liberalization can have uneven distributional impacts along regional lines, trade liberalization losers can find themselves in unfavorable conditions to associate and engage in collective action. Under these circumstances, few coalitions emerge to battle for protection in the policy arena, and when they do, geographic distance from decision-makers in the capital city can be a significant barrier to realizing their interests. As a result, even where a majority of the population living in regions that have not benefitted from trade elect a leftist president, trade reform reversal will not occur unless protectionist interests are close to the capital city. The contrast between Peru, on one side, and Argentina and Bolivia, on the other, highlights the powerful influence geography can have on reversing trade policy or preserving the status quo. Acknowledgments Contents List of Figures List of Tables 1 Introduction Argument in Brief Key Concepts—Free Trade and Protectionism Theoretical Relevance Research Design References 2 A Geography-Based Theory of Trade Policy Globalization and Trade Preferences in Commodity-Rich Countries: A Regional Perspective The Case for Trade Liberalization in Latin America The Insufficiency of Labor Market and Consumer-Oriented Theories The Regional Impact of Trade Reform in Commodity-Rich Countries The Problem with Alternative Geography-Based Approaches How Anti-trade Preferences Aggregate into Social Mobilizations The Initial Impact of Trade Liberalization on Societal Forces The Argument—New Vehicles for Experienced Actors Experienced Actors in More Industrialized Countries Experienced Actors in Less Industrialized Countries The Geographical Limits to Interest Representation How the Strategic Setting Affects Interest Representation Silent (Electoral) Majorities and Vocal (Mobilized) Minorities—What It Takes to Unravel Trade Reform The Electoral Geography of the Left Turn The Distance Factor: How Proximity Enforces Mandates Summary References 3 The Regional Impact of Free Trade: An Empirical Analysis Data and Measurement Peru From Asparagus to Zinc—The Varying Effects of Commodities on Trade Preferences in Peru Argentina Trade Preferences and Commodities in Argentina: An Empirical Analysis Bolivia Trade Preferences and Commodities in Bolivia: An Empirical Analysis Conclusion References 4 Trade-Related Protests in Post-reform Latin America Peru Traditional Labor Unions Domestic Agrarian Producers Statistical Analysis Argentina Organizational Experience Geographic Concentration Statistical Analysis Bolivia Urban Unrest Fueled by Migration Cocaleros in Rural Areas Statistical Analysis Conclusion References 5 Geography and Trade Reform in Latin America Cross-Country Evidence Peru Regional Trade Preferences in the 2006 Election The Fateful Remoteness of Protectionist Forces Argentina The Weak Mandate of the 2003 Election The Siege of Buenos Aires—Distorting Trade to Quell Protests Bolivia Policy Contestation (2000–2005): Governing Behind Enemy Lines Policy Reversal (2006–Present): Unraveling Free Trade Policies in Bolivia Conclusion References 6 Conclusion The Aftermath of the Cases Theoretical Issues and Avenues for Further Research Reform Sustainability State and Society in Latin America The Political Economy of Trade and Democratic Regimes References Index