www.ebook3000.com It’s Not Just the Economy, Stupid! Trade Competitiveness in the 21st Century www.ebook3000.com It’s Not Just the Economy, Stupid! Trade Competitiveness in the 21st Century By Sarita D Jackson It’s Not Just the Economy, Stupid! Trade Competitiveness in the 21st Century By Sarita D Jackson This book first published 2016 Cambridge Scholars Publishing Lady Stephenson Library, Newcastle upon Tyne, NE6 2PA, UK British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Copyright © 2016 by Sarita D Jackson All rights for this book reserved No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner ISBN (10): 1-4438-8729-3 ISBN (13): 978-1-4438-8729-8 www.ebook3000.com CONTENTS List of Illustrations vii List of Tables ix Preface xi Acknowledgments xii Introduction Background Methodology Process Tracing Theoretical and Practical Contributions Chapter Overview Chapter One 10 Industry Competitiveness and Decision-Making: A Call for a New Paradigm Importer Firm Decision/Behavior Export Industry Competitiveness in Specific Markets Importer Firm Behavior, Exporter Industry Competitiveness, and Path Dependency Chapter Two 31 Apparel Importers Using More Costly Textiles Honduras El Salvador Costa Rica Dominican Republic Chapter Three 50 History of U.S.-Latin American and Caribbean Trade Relations U.S Protectionism and LAC Neoliberalism (1930s–1940s) LAC Protectionism and U.S Neoliberalism (1940s–1980s) U.S.-LAC Trade Integration (1990s–) vi Contents Chapter Four 66 Trade Rules as Critical Junctures Political and Economic Crises in Latin America and the Caribbean From Crises to Critical Juncture Trade Institutions and Power Dynamics Chapter Five 91 Path Divergence: Jamaica and Guatemala Jamaican Microeconomic Policy Overview Jamaican Textile and Apparel Industry Profile U.S Unilateral Production-Sharing Program and Jamaican Textile Imports (1984–2004) Evolution to a Bilateral Trade Regime Jamaica’s Current Path: Costly or Makes Cents? Guatemalan Textile and Apparel in a Reciprocal Trade Regime Chapter Six 116 Twentieth-Century Trading Rules in the Twenty-First Century: Sub-Saharan Africa U.S.–Sub-Saharan African Textile and Apparel Trade and the PathDependency Model Recommendations Chapter Seven 129 Summary and Future Research List of Abbreviations 131 Bibliography 133 Index 146 www.ebook3000.com LIST OF ILLUSTRATIONS Figure 2-1 Honduran Imports of Yarn and Fabric from the United States and China (2014) (%) Figure 2-2 Honduran Imports of Yarn and Fabric from the United States and Asia (2013) (%) Figure 2-3 U.S Yarn and Fabric Exports to Honduras (2010–2014) (US$) Figure 2-4 Salvadoran Yarn and Fabric Imports from the United States and China (2014) (%) Figure 2-5 U.S Exports of Textiles to El Salvador (2010–2014) (US$) Figure 2-6 Salvadoran Imports of U.S and Asia Yarn and Fabric (2013) (%) Figure 2-7 Costa Rican Imports of Yarn and Fabric from the United States and China (2013) (%) Figure 2-8 Costa Rican Imports of Yarn and Fabric from the United States and Asia (2013) (%) Figure 2-9 Costa Rican Apparel Exports to the United States (2002–2013) (US$ million) Figure 2-10 U.S Exports of Textiles to Costa Rica (2010–2014) (US$) Figure 2-11 Dominican Yarn and Fabric Imports from the United States and Asia (2013) (%) Figure 2-12 Dominican Yarn and Fabric Imports from the United States and China (2014) (%) Figure 2-13 U.S Exports of Textiles to the Dominican Republic (2010– 2014) (US$) Figure 3-1 Mexican GDP Growth Rate (1961–1990) (%) Figure 3-2 Mexican Textile Exports to the United States (1994–2000) (US$ billion) Figure 3-3 Mexican Apparel Exports to the United States (1993–2000) (US$ billion) Figure 3-4 U.S Apparel Imports from Mexico, the Dominican Republic, and China (1993–1999) (US$ billion) Figure 4-1 Nicaragua Cotton Exports, Value and Unit Value (1978–1986) (US$ millions in 1987 prices) Figure 4-2 Nicaragua Cotton Exports, Volume (1978–1986) (US$ millions in 1987 prices) Figure 4-3 U.S Exports to Fabric to Caribbean Basin Countries (1989– 2005) (US$ million) viii List of Illustrations Figure 4-4 U.S Exports of Fabric to DR-CAFTA Countries (1989–2005) (US$ billion) Figure 4-5 U.S Imports of Textile and Apparel and Footwear under HTS 807A/9802 Program (1985–1999 (US$ million) Figure 4-6 U.S Yarn and Fabric Exports under CBTPA (1999–2004) (US$ thousand) Figure 5-1 Jamaican Net Foreign Debt (1970–1979) (US$ million) Figure 5-2 Jamaican Apparel Exports to the United States (1983–1987) (US$ million) Figure 5-3 Jamaican Imports of Yarn and Fabric (1990–2004) (%) Figure 5-4 Jamaican Textile Imports (2006–2014) (%) Figure 5-5 U.S Imports of Apparel from Jamaica (1992–2014) (US$ million) Figure 5-6 Guatemalan Yarn and Fabric Imports from the United States and Asia (2013) (%) Figure 5-7 Guatemalan Yarn and Fabric Imports from the United States and China (2013) (%) Figure 5-8 Guatemalan Imports of Yarn and Fabric from the United States and China, (2000–2014) (US$ million) Figure 6-1 Lesotho Yarn and Fabric Imports (2000–2014) (US$ million) Figure 6-2 Sub-Saharan African Textile Market, by Market Share (2013) (%) www.ebook3000.com LIST OF TABLES Table 2-1 Top Five Yarn and Fabric Suppliers to Honduras (2014) (US$) Table 2-2 Top 10 Honduran Exports to the United States (2014) (US$) Table 2-3 Top Five Sources of Imported Yarn and Fabric in El Salvador (2014) (US$) (%) Table 2-4 Top 10 Exports from El Salvador to the United States (2014) (US$) (%) Table 2-5 Top 10 Dominican Republic Exports to the United States (2014) (US$) (%) Table 3-1 Commodity Composition of Latin American Exports (1929) (% of total exports) Table 3-2 U.S Duties on Imports from Latin America and the Caribbean (1929) (%) Table 3-3 Path of Preferential Access for Caribbean Basin Apparel to the U.S Market (1986–2002) Table 3-4 From CBTPA to DR-CAFTA in Textiles and Apparel Table 4-1 Regional Political and Economic Crises in Latin America and the Caribbean (1960s–1980s) Table 4-2 U.S Imports of Textiles and Apparel from Mexico (1990) (US$ millions in 1992 dollars) Table 5-1 U.S Imports of Knit Apparel (1995) Table 5-2 U.S Imports of Non-knit Apparel (1995) Table 5-3 U.S Imports of Jamaican Apparel (1995–1998) (US$ million) Table 5-4 Jamaican Textile and Apparel Exports to Quota Markets (1997– 2001) Table 5-5 Jamaican Apparel Costs to Export to U.S Market: Path Comparison (2015) Table 5-6 Traditional and Nontraditional Export Sector Employment in Guatemala (2010) Table 6-1 Sub-Saharan African Knit and Non-knit Apparel Exporters to the United States Table 6-2 AGOA-Eligible and Apparel Provision–Eligible Sub-Saharan African Countries Table 6-3 Kenyan Imports from the United States, China and Asia (2000– 2014) (US$) It’s Not Just the Economy, Stupid! 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143 Searle, Chris 1983 Grenada: The Struggle against Destabilization London: Writers and Readers Publishing Cooperative Seyoum, Belay 2010 “Trade Liberalization in Textiles and Clothing and Developing Countries: An Analysis with Special Emphasis on the US Import Market.” International Trade Journal 24, no (April–June): 149–81 Simon, Herbert Alexander 1997 Administrative Behavior: A Study of Decision-Making Processes in Administrative Organizations 4th ed New York: Free Press Singer, Hans Wolfgang 1964 International Development: Growth and Change New York: McGraw-Hill Skocpol, Theda 1985 “Bringing the State Back In: Strategies of Analysis in Current Research.” In Bringing the State Back In, edited by Dietrich Reuschemeyer Peter Evans, and Theda Skocpol, 3–43 Cambridge: Cambridge University Press Skowronek, Stephen 1992 Building a New American State: The Expansion of National Administrative Capacities, 1877–1920 Cambridge: Cambridge University Press Smith, Adam 1994 An Inquiry into the Nature and Causes of the Wealth of Nations New York: Modern Library “Smoot-Hawley Tariff.” 2015 U.S Department of State Accessed December 28, 2015 http://future.state.gov/when/timeline/1921_timeline/smoot_tariff.html Statistical Institute of Jamaica 2014 “Exports of Traditional and NonTraditional Commodities Year.” Last modified September http://statinja.gov.jm Steinmo, Sven, Kathleen Ann Thelen, and Frank Longstreth 1992 Structuring Politics: Historical Institutionalism in Comparative Analysis Cambridge: Cambridge University Press Street, James H., and Dilmus D James 1982 “Institutionalism, Structuralism, and Dependency in Latin America.” Journal of Economic Issues 16, no (September): 673-689 Sullivan, Gwen 1998 “Productive Adaptation and Industrial Relations in Nicaragua, 1980-1987.” University of Sussex Swamidass, Paul M 1993 “Import Sourcing Dynamics: An Integrative Perspective.” Journal of International Business Studies 24, no 4: 671– 91 Tansey, Oisín 2007 “Process Tracing and Elite Interviewing: A Case for Non-Probability Sampling.” PS: Political Science and Politics 40, no (October): 765–72 144 Bibliography Taylor, Alan M 1999 “Latin America and Foreign Capital in the Twentieth Century: Economics, Politics, and Institutional Change.” Working Paper, National Bureau of Economic Research, Cambridge, MA http://www.nber.org/papers/w7394 “Textile Closes Operations in Costa Rica.” 2014 Nacion.com, September http://www.centralamericadata.com/en/article/home/Textile_Operation s_in_Costa_Rica_Closes “Textile Plant Moved from Costa Rica to El Salvador.” 2015 CRHoy.com, August http://www.centralamericadata.com/en/article/home/Textile_Plant_Mo ved_From_Costa_Rica_to_El_Salvador “Textiles and Apparel Sector El Salvador: A Country of Opportunities.” 2014 El Salvador, C.A.: Agencia de Promoción de Exportaciones e Inversiones de El Salvador (PROESA) “Textiles and Garments.” n.d International Trade Forum Magazine The IBERC Group (A Division of Sandler, Travis and Rosenberg) 2003 “Assessment of Long-term Competitiveness of the Central American Textile and Apparel Industries and Need for Free Trade Agreement.” Washington, DC Thelen, Kathleen 1999 “Historical Institutionalism in Comparative Politics.” Annual Review of Political Science 2: 369–404 Thorp, Rosemary 1998 Progress, Poverty and Exclusion: An Economic History of Latin America in the 20th Century Washington, DC: InterAmerican Development Bank Times Wire Services 1999 “Fruit of the Loom Files for Chapter 11.” Los Angeles Times, December 30 Tversky, Amos, and Daniel Kahneman 1986 “Rational Choice and the Framing of Decisions.” Journal of Business 59, no 4: S251–78 United Nations Commodity Trade (UN Comtrade) Statistics Database Accessed July-October, 2015 http://comtrade.un.org/data/ U.S Assistance to the Dominican Republic Handbook: Strategic Information and Developments 2014 Washington, DC: International Business Publications “US-SACU.” 2012 Bilaterals.org (May) http://www.bilaterals.org/?-USSACU- U.S Department of Commerce, USA, Select n.d “The Textiles Industry in the United States.” http://selectusa.commerce.gov/industrysnapshots/textile-industry-united-states U.S Department of State and Department of Defense “Grenada: A Preliminary Report.” Washington, DC www.ebook3000.com It’s Not Just the Economy, Stupid! 145 U.S Department of State, Bureau of Economic, Energy and Business Affairs 2011 “2011 Investment Climate Statement.” Washington, DC U.S International Trade Commission 1992 Report on the Impact of the Caribbean Basin Economic Recovery Act on U.S Industries and Consumers Washington, DC Van de Ven, Andrew H., and Arik Lifschitz 2013 “Rational and Reasonable Microfoundations of Markets and Institutions.” Academy of Management Perspectives 27, no 2: 156–72 Vergne, Jean-Philippe, and Rudolphe Durand 2010 “The Missing Link Between the Theory and Empirics of Path Dependence: Conceptual Clarification, Testability Issue, and Methodological Implications.” Journal of Management Studies 47, no 4: 736–59 von Neumann, John, and Oskar Morgenstern 2004 Theory of Games and Economic Behavior Princeton: Princeton University Press Weisman, Steven R 1982 “Reagan in Caribbean, Links Grenada to Moscow.” New York Times, April Whitefield, Mimi 1997 "NAFTA, Cost Factors Blamed in Closings of Jamaican Apparel Factories." Knight Ridder/Tribune Business News, April 13 Williams, Brock R 2015 “African Growth and Opportunity Act (AGOA): Background and Reauthorization.” Congressional Research Service, Washington, DC “World Bank Data.” 2015 World Bank Accessed December 28 http://data.worldbank.org/country/dominican-republic “World Economic Outlook” database 2014 International Monetary Fund, Washington, DC WTO (World Trade Organization) 1998 “Trade Policy Reviews: Jamaica: October 1998.” News release October 23 https://www.wto.org/english/tratop_e/tpr_e/tp85_e.htm Zhuang, Weifen, Meifeng Luo, and Xiaowen Fu 2014 “A Game Theory Analysis of Port Specialization—Implications to the Chinese Port Industry.” Maritime Policy and Management 41, no 3: 268–87 INDEX absolute advantage, 7, 18 Africa, 105, 106, 116, 117, 118, 120, 125, 127 African Growth and Opportunities Act (AGOA), 9, 116, 117, 119, 120, 121, 122, 125, 126, 127, 130 apparel industry, 5, 7, 30, 31, 33, 38, 40, 44, 46, 47, 62, 67, 68, 72, 84n, 86n, 87, 89, 92, 93, 95, 96, 97, 99, 103, 104, 106, 111, 112 Argentina, 24, 50, 51, 54, 55 Asia, 1, 3, 18, 30, 32, 33, 39, 40, 43, 46, 77, 83, 86, 87, 95, 99, 100, 105, 106, 111, 120, 122, 123, 124, 125, 126 Babb, Sarah, 54, 55, 57n Bangladesh, 11, 95 Belize, 5n, 106 Bilateral Textile and Apparel Agreement, 97 Bishop, Maurice, 57, 71, 72, 75 bounded rational model, 12, 13 Brander, James A., 13, 15 Brazil, 20, 24, 50, 51, 52, 54, 55 Cambodia, 11 Canada, 54, 60, 75, 85, 96, 102 Caribbean, 1-129 Caribbean Basin Economic Recovery Act (CBERA), 59, 97 Caribbean Basin Initiative (CBI), 4, 59, 63, 66, 75, 76, 79, 81, 84, 98, 107, 119 Cassill, Nancy L., 22 Central America, 5, 8, 58, 64, 66, 73, 74, 83, 86, 87, 88, 101, 106 Central American Common Market (CACM), 20n Central American Free Trade Agreement (CAFTA), 82, 84, 85, 87, 88 Chile, 24, 51, 52, 55, 56, 57, 60 China, 2, 3, 7, 8, 30, 31, 32, 33, 37, 39, 42, 43, 46, 47, 62, 63, 83, 86, 90, 91, 95, 96, 99, 102, 103, 105, 106, 107, 108, 111, 112, 113, 114, 120, 122, 123, 124, 125, 126 Collier, David, 24, 26, 27, 81 Collier, Ruth Berins, 24, 26, 27, 81 Comparative Advantage, 7, 25, 27, 83, 102 Competitive Advantage, 7, 21, 22, 24, 27, 62, 84, 94, 105 competitiveness, 1, 2, 3, 5, 6, 7, 10, 11, 17, 18, 21, 22, 25, 27, 28, 45, 47, 76, 92, 93, 101, 114, 126, 127, 129, 130 contingent events, 23, 24, 28 Cool, Karel, 27 Coons, Chris, 127 Costa Rica, 2, 3, 31, 42, 43, 44, 45, 55, 64, 79, 81, 95, 98, 107 critical juncture, 8, 24, 66, 73, 75, 76, 119 Cuba, 51, 52, 54, 56, 57, 70, 74, 75 Democratic Republic of the Congo, 119 Dependency Theory, 20, 21 Dierickx, Ingemar, 27 Dobusch, Leonhard, 28 Doha Round, 16, 104 www.ebook3000.com It’s Not Just the Economy, Stupid! Dominican Association of Free Zones (ADOZONA), 63, 89 Dominican Republic, 2, 3, 4, 5, 26, 31, 48, 49, 55, 63, 64, 77, 81, 82, 83, 84, 85, 86, 89, 90, 98, 106 Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), 4, 5, 26, 64m 66, 77, 78, 85, 86, 87, 89, 90, 106, 107, 114, 130 Edward Seaga, 70, 75, 97 Eichengreen, Barry, 53, 54 El Salvador, 2, 3, 31, 37, 38, 39, 40, 41, 57, 64, 67, 68, 69, 70, 72, 73, 77, 79, 83, 85, 96, 112 Ethiopia, 117, 120, 121, 125 Export Processing Zone (EPZ), 32, 34, 47, 48 factors of production, Farabundo Martí National Liberation Front (FMLN), 57, 67 firm behavior, 1, 2, 12, 15, 22 Fisher, Franklin M., 12 France, 75, 96 free trade, 1, 2, 4, 7, 20, 26, 32, 44, 47, 48, 82, 83, 93, 94, 96, 103, 104, 107, 113, 127 free trade agreement, 1, 4, 7, 26, 44, 82, 83, 104 free trade zones, 93, 96, 113 Free Trade Area of the Americas (FTAA), 16, 64, 103 Fruit of the Loom, 100, 101, 105 Gairy, Eric, 57, 70, 72 Galbraith, John Kenneth, 13, 21 game theory, 10, 11, 12, 16 General Agreement on Tariffs and Trade (GATT), 55, 56, 58 Generalized System of Preferences (GSP), 104n, 119, 120 government, 1, 6, 13, 81, 113 Grenada, 57, 70, 71, 72, 74, 75 Guatemala, 3, 8, 26, 29, 39, 40, 55, 64, 70, 77, 81, 83, 85, 91, 92, 95, 100, 105, 111, 112, 113, 114, 115, 129, 130 147 Hanes Brands, 45 Harmonized Tariff Schedule (HTS), 4, 25, 60 807A, 4, 25, 60, 64, 75, 77, 79, 80, 81, 94, 97, 98, 99, 101, 102, 103, 113, 129 history, 2, 6, 11, 13-16, 20, 23, 27, 50, 52, 54, 65, 129 Hoge, Warren, 69, 70 Honduras, 2, 3, 31, 32, 33, 34, 35, 36, 40, 55, 64, 67, 68, 70, 77, 79, 82, 85, 88, 95, 96, 100, 105, 112, 114 Hornbeck, J F., 103, 104, 105 import substitution industrialization (ISI), 19, 56, 57, 58, 92, 93 importer behavior, 6, 17, 18 decision-making, 4, 22, 25, 26 increasing returns, 26, 27, 28, 29, 122 Inhofe, Jim, 127 institutionalism, 6, 13, 14, 17, 21, 22, 65, 71n institutions, 8, 13-16, 19, 21, 23, 24, 25, 26, 29, 55, 66, 69, 70, 71, 75, 81, 86, 117, 130 International Trade Organization (ITO), 55 Irwin, Douglas, 52, 53 Jamaica, 3, 8, 26n, 29, 57, 70, 72, 73, 75, 79, 81, 91-110, 114, 129 Jockey International, 94 Jones, Michelle R., 22 Kay, Adrian, 23, 25, 28, 29 Kenya, 117, 120, 121, 122, 125 Krasner, Stephen, 14, 15, 24, 26 Krugman, Paul, 26, 27, 84 Latin America, 19, 24, 25, 52, 53, 55, 56, 57, 66, 72, 98, 117, 129 Latin American Free Trade Area (LAFTA), 20n Lesotho, 11,117, 120, 121, 122, 123, 124, 125 least developed countries (LDCs), 120, 122 Logan, Ikubolajeh, 117, 118 Index 148 Machlup, Fritz, 12 Madagascar, 11, 117, 120, 125 Mahoney, James, 23, 26 Mandela, Nelson, 119 Manley, Michael, 57, 70, 73 Martín Álvarez, Alberto, 73 Mauritius, 96, 117, 120, 125 Mengisteab, Kidane, 118 method of agreement, method of difference, 3, Mexico, 7, 24, 25, 33, 39, 41, 51, 52, 54, 55, 56, 57, 58, 60, 61, 62, 63, 66, 75, 79, 80, 84, 85, 92, 95, 96, 97, 100, 101, 105, 111 Mill, John Stuart, Multifibre Arrangement (MFA), 59, 75, 79, 80, 91, 92, 98, 107, 114 neoliberalism, 50, 53, 56 Nepal, 11 Nicaragua, 3, 55, 57, 64, 66, 67, 68, 69, 70, 71, 72, 74, 75, 77, 83, 87, 88, 105, 114 North American Free Trade Agreement (NAFTA), 1, 4, 28, 47, 48, 60, 61, 62, 63, 76, 84, 85, 88, 91, 92, 94n, 96, 100, 101, 102, 107 North Carolina, North, Douglass, 15, 24, 25 Office of Textile and Apparel (OTEXA), 6, 76, 77, 78, 82, 109, 110 Page, Scott E., 28, 29 Panama, 5n, 74, 106 Parrish, Erin D., 22 path dependency, 6, 7, 8, 22, 23, 24, 27, 28, 29, 129 Pena, Afonso, 54n Pierson, Paul, 24, 25, 26, 27 Porter, Michael E., 1, 6, 21, 22 power, 2, 6, 8, 11, 13, 15, 16, 21, 23, 25, 26, 27, 29, 55, 66, 67, 71, 72, 86, 87, 88, 121, 122, 129 process tracing, 3, 4, 5, 6, 16, 23 protectionism, 50, 53, 54, 55n punctuated equilibrium, 24 Raadschelders, Jos C N., 28, 29 rational choice, 1, 6, 10, 11 Reagan, Ronald, 59, 70, 73, 74, 75, 97 Ricardo, David, 18 Rule of Origin (ROO), 61, 82, 85, 86, 87, 88, 89, 90, 104 rules, 4, 6, 11, 13-16, 18, 21, 22, 23, 26, 27, 56n, 60, 66, 75, 82, 83, 84, 86, 88, 90, 91, 104, 105, 107, 116, 119, 121, 122, 127, 128, 129, 130 Rwanda, 118 Sandinista National Liberation Front (FSLN), 57, 66, 67, 83n Sandinistas, 74, 83n Schüßler, Elke, 28 Searle, Chris, 71, 72, 75 Smith, Adam, 10, 18 Smoot-Hawley tariff, 52, 53, 54, 55 Somalia, 119 Somoza Debayle, Anastasio, 57, 66 South Africa, 117, 119, 120, 122, 125 Spencer, Barbara J., 13, 15 structuralism, 20 Sub-Saharan Africa, 9, 106n, 116, 117, 118, 120, 121, 126, 127, 128 Suriname, 72 Tansey, Oisín, 4, technology, 1, 19, 23, 24, 27 textile industry, 1-6, 26, 31, 34, 84, 85, 114 Trade and Investment Cooperation Agreement (TICA), 122 Trans-Pacific Partnership (TPP), 1, 45, 130 U.S Agency for International Development (USAID), 72 U.S International Trade Commission (USITC), 64, 76, 82, 85, 102, 104, 105, 114 Venezuela, 24, 51, 52, 75 Vietnam, 45, 124 www.ebook3000.com It’s Not Just the Economy, Stupid! World Bank, 31, 58, 91, 97, 109, 111, 117, 119 149 World Trade Organization (WTO), 16, 28, 56n, 83, 91, 93, 97, 104, 107, 112, 114 Doha Round, 16, 104 ...It’s Not Just the Economy, Stupid! Trade Competitiveness in the 21st Century www.ebook3000.com It’s Not Just the Economy, Stupid! Trade Competitiveness in the 21st Century By Sarita... industry in these markets also benefits The benefit to the apparel industry in the Latin American and Caribbean regions is not just in terms of increased exports to the United States but also in the. .. constrain the behavior of others, including in market relationships The Nobel laureate in economics Douglass North later incorporated the rules of the game and history into the following definition