Trade Policy in the Western Hemisphere is undergoing major transformation. Developments during the past few years include entry into force of the Canada-US free trade agreement; the prospect of negotiations among Canada, Mexico, and the United States toward a North American free trade area; efforts to deepen economic integration between Argentina and Brazil; and the initiative of President George Bush for free trade in the Western Hemisphere.

Had the Bush proposal been put forward a decade or so ago, it would have been greeted with suspicion, perhaps even derision, as just another neocolonial US maneuver to keep Latin American and Caribbean (LAC) countries from developing their industrial capacity. Its reception, however, was generally favorable, even enthusiastic. It is premature to expect the conclusion of free trade agreements between LAC countries, other than Mexico, and the United States, but there is a dynamic moving in this direction.

Canada, Long-Oriented toward Europe and the Commonwealth, seeks to expand its involvement in Latin America. The development of a coherent Canadian policy for Latin America will depend on a variety of domestic and external factors, among them the Canada-United States relationship, rapid global change, and North American economic integration. Such a policy must reflect Canadian values and concerns — the importance of the collective welfare as well as individual good, the peaceful negotiation of disputes, and the acceptance of cultural, political, and ideological diversity.

Japan's Current Role as the world's most dominant economic power has had an impact on its relations with Latin America despite the absence, historically at least, of few long-term ties between the two regions. While there is some evidence that contacts may date as far back as 1609, relations between them only began to acquire a certain relevance as recently as the 1970s and 1980s, when the Japanese domestic model, acquired after World War II, began to seem assured.

Nevertheless, it is impossible to understand either the relations between these two actors, or their future trends, without examining the policies and conditions that have marked Japan's reinsertion into the world — from its situation as a defeated, war-devastated, resource-poor country to one that is not only extremely wealthy but with the potential to become a superpower (Time, 1988: 6-9).

During the Past Decade, Bolivia's peasant coca-leaf growers have made impressive strides in political development. This development is demonstrated by their almost mercurial ascent within the national political system, a climb which parallels the upward economic mobility of many growers. Organized through a network of unions (sindicatos), and determined to resist state policies and programs which threaten their local economies, Bolivia's peasant coca-leaf producers have learned to improve their political skills, including the building of alliances with other key political actors.

The thesis advanced here holds that not only has the peasant sindicato movement blocked attempts of the state to both reduce coca production and control coca-leaf marketing, but that those same state policies have actually strengthened the Left-of-Center labor unions and opposition political parties. Moreover, while the international war on drugs has thus far proved only minimally effective in curbing the flow of drugs from the Andean region, it has succeeded in antagonizing the sindicato organization of cocaleaf growers to the point that anti-US sentiment is widespread throughout the Bolivian countryside.

Despite the Great difficulty in separating "good" international diversification from "bad" capital flight, the size and variance of these capital exports from developing countries have become a matter of increasing concern. According to some analysts, this capital flight has contributed to the sharp increase in foreign debt of developing countries, undermined the tax base, and — in extreme cases — even resulted in a net real capital transfer out of the country (Khan and Ul-Haque, 1985). This perception that capital flight might be undermining development efforts has led to a series of studies which have attempted to estimate the volume of capital flight. The best summary of this work is the conference proceedings edited by Lessard and Williamson (1987).