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The Role of Globalization and Free Trade in Latin America Research Paper


The world is fast becoming one global village courtesy of up surging rates of globalization and free trade. Latin America has not been left out of these global changes which have led to drastic changes including the way of doing business and importantly socio-cultural changes that have resulted thereof.

In Latin America, the 1980s are commonly referred as the ‘lost decades’ and as the economy tries to recover from these effects, there has been mass influence from globalization and free trade. Globalization in Latin America came with its merits and demerits.

Currently, Latin America is undergoing intense import substitution facilitating global economy; this has led to privatization of many firms. Apart from Cuba, all other Latin American countries have fully embraced globalization and free trade and this has been happening for several years after World War II.

According to United Nations Development Programme (UNDP), international trade in Latin America tripled between 1960 and 1989 with service industry expanding for more than 16 times with foreign exchange markets hitting climax around this time.

Social issues like joblessness and poverty underwent huge turnovers and reduced drastically with the endorsement of free trade and effects of globalization taking toll. This can be attributed to the fact that, apart from more businesses opening up in the region, there has been massive immigration to developed countries like the United States of America among others.

This paper focuses on the roles that globalization and free trade have played in Latin America. It will also focus on their effects to establish whether they have been advantageous or disadvantageous. However, it is important to note that the changes that have taken place in Latin America are because of international changes that are far from stabilization. The world in general is undergoing several changes that can overhaul historical trends and put new ones in place that comply with global systems.

Historical Background of Latin America

Great Depression and World War II caught the whole of Latin America by surprise and it was devastating. This region depended largely on production market and primary produce export; unfortunately, this form of trade was completely shattered by the 1929 crisis. The repercussions were far reaching throwing the region into turmoil of facing rising national and international debt.

Many people lost their jobs and started looking for alternative ways of making a living. As the world regained stability from the Great Depression and the effects of Second World War II, international relations stabilized also leading to trade liberalization and increase in foreign financial trade.

The most significant change that came with globalization and free trade was the massive immigration of Latin American natives to developed nations like the United States of America. Free trade meant free flow of goods and services meaning that people would move with ease from one country to another without many restrictions. The United States of America received most of the immigrants because many people imagined that this was a country of opportunities.

Many people seized this opportunity presented by free trade and globalization to move to America. Nevertheless, after these immigrants reached America, they realized that things were different. Life was not easy, as thought and securing a good job became an uphill task. Even after getting a job, the policies were too poor or flawed that these immigrants were rendered criminals to some extent.

Issues that Propelled Global Change

The most significant change that led to drastic global change was the fall of the Soviet Union together with its systems. This historic event and the Cold War coming to and end, Latin America in general opened her eyes and saw the world from a different perspective. Market-based economies took toll without sparing even the most ardent Socialist economies like China and Cuba.

According to Swartz, there was unprecedented change in demography in this region (63). This led to “Global Teenager” characterized by birth of many children and many people becoming aged (Swartz 65). This meant that most of the population was dependant hence rendering the economy unproductive thus catalyzing immigration to developed countries.

Another factor is the improvement of information technology. Technological advancement hit the whole world massively; a factor that contributed to immense globalization .Social and cultural changes took place with people changing their lifestyles due to this global connectedness via advanced technology.

Poverty apart, many people moved abroad to experience the new lease of life they had never experienced in their native countries. Globalization brought about social polarization also leading to the massive migration experienced in Latin America. Globalization brought about inflow of transnational and international firms into Latin America and this had both positive and negative impacts. These corporations exploited the locals making living standards in this region unbearable.

Globalization brought about “barbarization’ in what Gallopin describes as “widespread societal decomposition and fragmentation, associated with high political and economic turbulence, or by an authoritarian world where the rich minority keeps

(Or attempts to keep) the rest of the population under conditions of low consumption” (Gallopin 123). Surely, Latin America underwent through this barbarization throwing it into this authoritarian world widening the gap between the majority poor and the rich minority. Many locals could not stand this scenario; hence, opted to immigrate to other countries where living standards were supposedly bearable.

The focus here is what happened to the people who migrated to other countries and especially in the United States of America. This brings into light the interwoven relationship between globalization and upsurge in migrant workforce coupled with the resulting effects.

Globalization and Migrant Labor from Latin America

According to Bacon, “neo-liberal globalization agenda pursued by leading capitalist powers (and the institutions they control) destroys existing livelihoods, uprooting peoples, who are then set in motion within ever increasing migrant flows. As immigrants in the rich countries, these migrants find themselves socially and politically marginalized: confined to low grade exploitable labor, without rights to organize, denied citizenship and facing manifold discrimination” (96).

The same laws that allowed immigrants to enter in the United States of America started to discriminate them. Ironically, as Bacon asserts, globalization threw into disarray, a system that was otherwise stable. Making people leave their countries where they could manage life the challenges of hard economic times notwithstanding.

These people entered the United States of America with high hopes of having a better life, only to be relegated to second-class citizens. To some extent, second-class people are illegal; unfortunately, this illegality comes courtesy of globalization and free trade. As migrant labor increased, employers seized the opportunity and many employed workers without proper documents.

This was rampant especially in California and some parts of North Carolina. With time, concerns about the authenticity of migrant laborers rose; however, these migrants retaliated and this led to crackdowns to whip out the undocumented people in these areas.

All this happened as a direct result of globalization. Nevertheless, the worst was yet to come. Working conditions in these areas became violent with relationship between authorities and migrant laborers soared by each day. These laborers moved from being undocumented migrant laborers to criminals subject to interrogation and imprisonment, deaths being reported in different areas.

Some people may refute claims that globalization led to all this mess creating immigration only to criminalize the immigrants. However, there is enough evidence to show that globalization played a major role in taking people from their native countries bringing them to the United States of America. For example, in his book, Illegal People: How Globalization Creates Migration and Criminalizes Immigrants, David Bacon shows how North American Free Trade Agreement (NAFTA) destroyed farming in Oaxaca and Cananea in Mexico.

As aforementioned, most of the countries in the Latin America depended largely on production of local goods whereby the countries rallied behind production and consumption. As these systems broke down, courtesy of NAFTA agreements, many people remained hopeless and the only way out of their turmoil was to move north in search of greener pastures. What really transpired between Mexico and the United States of America in the pretext of NAFTA?

According to Lederman, Maloney, and Serven, “duty-free access to the NAFTA markets depends on the fulfillment of product or service-specific rules of origin, which determine the criteria for products to be considered as originating in one of the three member countries. In some instances; market access to Mexican export, is inhibited by these rules” (3). Many people, especially Mexicans, never noticed this ugly face of free trade.

The proposed free trade environment never happened. Even after NAFTA drew majority of Mexicans into this murk, it still looked promising for it carried some clauses that allowed free flow of people into the United States of America. Regrettably, this is where many people lost it all. As aforementioned, upon reaching the United States of America, things were different and eventually the American authorities stepped in to flush out these ‘illegal’ immigrants.

This is just one of the incidences whereby globalization and free trade contributed directly to woes of Latin American people both in Diaspora and those still in that region. “Like most trade agreements; NAFTA did not achieve completely free international trade, and numerous distortions still remain” (Lederman, Maloney & Serven 3).

Unfortunately, for immigrant laborers, political wars about migrant labor rights remain high and no substantial agreement has been reached yet. “Instead a large body of evidence exists documenting the appalling conditions facing those employed in this way: low pay, long hours, tied housing, health and safety violations, repression of worker protests, firing of activists and employer blacklists” (Bacon 109).


Globalization brought many disadvantages including eco-political and socio-cultural issues in the Latin America. Many people became jobless after NAFTA scuttled their employment sources; that is, farming. Consequently, many people moved to the United States of America to look for better jobs.

This brings in the negative side of globalization where people migrate from their countries especially developing countries to look for better jobs and living standards in other countries especially the developed countries. Unfortunately, once these immigrants reach their destination, labor forces make it a crime for these people to stay in these countries.

This fact might have led Bacon to posit that, “globalization uproots people in Latin America and Asia, driving them to migrate. At the same time, U.S. immigration policy makes the labor of those displaced people a crime in the United States. Illegal People explain why our national policy produces even more displacement, more migration, more immigration raids, and a more divided, polarized society” (Bacon 29).

NAFTA worked retrogressively contrary to what many people expected. There are many more agreements that have come with globalization and free trade; however, just like NAFTA, these agreements do not reach their proposed goals and this leaves many citizens in problems similar to what Mexicans are undergoing right now.

The issue of illegal migrants goes back to colonialism and slavery where classes dominated society. Unfortunately, even though colonialism is gone, it has only paved way for neocolonialism that may even be worse than the colonialism itself in some aspects.

Think of neo-liberalization! While labor and markets have become global, human rights have not undergone the same process, and this is something that calls for immediate response from the international communities. There is dire need to review labor policies in the global communities to allow equality among people living in these places. What is the need of creating migration, only to criminalize the immigrants?

Works Cited

Bacon, David. “Illegal People: How Globalization Creates Migration and Criminalizes Immigrants.” New York: Beacon Press, 2008.

Gallopin, Clay. “Human Dimensions On Global Change: Linking the Global and The Local Processes.” International Social Science Journal. 1991. 130(4): 707-718.

Lederman, Daniel, Maloney, William & Serven, Luis. “Lessons from NAFTA for Latin America and the Caribbean. Washington: Stanford University Press, 2005.

Schwartz, Paul. “The Art of the Long View.” New York: Doubleday Publishers, 1991.

UNDP (United Nations Development Programme). “Human Development Report 1996.” New York: Oxford Univ. Press, 1996.

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