Trade Reform and Institution Building: Peru and Argentina under the WTO

Beyond removing restrictions, trade reform in Latin American in the 1980s and 1990s was in significant part an attempt to change the domestic politics of trade and to reformulate the culture of policy management by introducing procedural characteristics that WTO trade remedy rules advance. This paper examines how trade reform in Peru and Argentina has gone since the reforms of the 1990s. Peru provides a valuable example of sustaining reforms. Leaders have used negotiations and other international instruments to disseminate among Peruvians a positive vision of Peru in the international economy, and to extend the application of WTO-based governance principles. Peru has introduced few new restrictions and all of them have been through WTO-sanctioned policy instruments. Argentina, on the other hand, has introduced multiple restrictions, through procedures that eschew WTO governance principles. Moreover, leaders there have returned trade politics to the dependencia philosophy that sees the international economy as an exploitive environment.The paper brings out the weakness of international obligations to limit Argentina's return to import substitution and the pains at which Peru has gone to maintain the management of its economy within the same rules that Argentina has so easily violated. To have commercial value, the GATT/WTO principle that members apply only approved methods of trade control must have operational expression in national institutions.