Latin America's insertion in the world trade system is entering a period of historical change. Driving that change will be the outcome, or failure, of the Uruguay Round of multilateral trade negotiations; the increasing regionalisation of trade relations; and the profound liberalisation in Latin America of national trade regimes, which is also leading to a strong revival in the region of sub-regional integration schemes. The interaction between changes in the region's trade regimes and changes in the global determinants of foreign direct investment in manufacturing are affecting the locational advantages of Latin America as a recipient of direct investment flows as well.

The effects on Latin America of regionalisation in Europe and in the Western Hemisphere are, overall, benign. "EC 1992" is likely to have a positive net impact on Latin America's exports unless dramatic, and unlikely, discriminatory measures against third parties are introduced in conjunction with the creation of the ...