Industrialization and Structural Change of the Periphery in the Global World
AbstractAfter the worldwide consolidation of the neoliberal ideas in the early 1990s the space for industrial policy in underdeveloped countries has been extremely cut from their economic policy agenda. Developed countries, especially the United States, have placed at the centre of the international negotiations the liberalization not only of commodities but, especially, of capital, regardless of its use. With the increasing importance of both financial institutions and global (regional) value chains managed by Transnational Corporations (TNCs), the main aim was to minimize the transaction costs for the internationalization of production in order to guarantee their profitability on the international scale. According to their view the main way to achieve development is through free trade and the participation in Global Value Chains.
The WTO (World Trade Organization) has been functional to this aim, although with a view to achieving a global consensus on free trade, some issues had been pulled out of the negotiations. This create some space for industrial policies, that is, what Alice Amsden (2002) labelled as “hidden protectionism”. Through public procurement, government contracts, promotion of technology and applied sciences, some developing countries like China and India have achieved a high level of industrialization. Since the 2000s, the rise of China and the failure of the international negotiations within the WTO to eliminate this protectionist measures have brought about a strong reaction from TNCs. In this regard, developed countries, on behalf of the TNCs, have been promoting free-trade agreements that go well beyond the WTO’s formal regulations, the so-called WTO-plus and WTO-extra free-trade agreements.
The main aim of this paper is to discuss the possibilities for industrial development in developing countries, especially in Latin America, with a view to stressing the constraint imposed by the current system of rules that regulates international trade.