Economies of Latin America Market, Mixed, Command & Socialist

Mexico Currency is the peso; equal to.07 dollars 2 nd largest economy in Latin America Is considered a free market economy Less than 200 government owned businesses

Mexico & Brazil: Tariffs in the real world January 2013: The 4 countries of the Pacific Alliance announced they would lift tariffs on 90 percent of goods before March 31 in a further push to open up their growing markets. Unlike the Pacific Alliance, Mercosur, South America’s trade bloc decided in December 2011 to impose tariffs on a host of cheap imports to protect the region from a slowing global economy. There will be a 35% tariff on 100 additional goods until 2014.

Brazil Currency is “real”; equal to.50 in dollars Has a mixed market economy #1 economy in Latin America Government controls health care & postal service

Brazil: Quotas in the real world A quota is a limit on the number of goods that can be imported. To avoid a quota set by the government, Volvo opened a factory in Brazil to produce automobiles.

Cuba Currency is peso; equal to $1 dollar Has a command economy, but is beginning to allow some private ownership Government controls all resources and property

Cuba: Embargo in the real world Began as a military embargo to stop Soviet weapons from being imported Economic sanctions until Cuba moves toward democracy and greater respect for human rights In 1996, more restrictions kept U.S. citizens from doing business in or with Cuba, and prevented giving public or private assistance to any successor government In 1999 the U.S. forbid foreign subsidiaries of U.S. companies to trade with Cuba

Venezuela Currency is a bolivar; equal to.16 dollars Has a free market economy, but with a socialist bent Relies heavily on the oil industry (accounts for 95% of its exports)

Socialism Socialism as – economic/political theory supporting group or governmental ownership and administration of production and distribution of goods Was very popular during the 19 th /20 th Century when it meant a society committed to meeting the basic needs of all people The collapse of the Soviet Union began the change to more capitalistic societies, other than in Venezuela where Chavez spoke against capitalism CommunismSocialism Political & economicOnly economic Distribution of goods based on individual need Distribution of goods based on individual effort Capitalism can’t existCan have capitalism Doesn’t require many people to runMany people can control the economy Power concentrated in the central governmentPower concentrated in the workers

NAFTA A trade agreement made between the U.S., Canada & Mexico in 1994 Lowered trade barriers to create a free trade zone Key points: Eliminate tariffs Remove investment restrictions Remove customs barriers between U.S. & Mexico Establish tough standards in industry Improve working conditions