The European Union (EU) has been having formal relations with Latin America (LA) ever since the 1960s when it was the European Communities (EC). This relationship has assumed increasing importance especially with the accession of Portugal and Spain to the EC in 1986. The relationship has evolved simultaneously at the national, regional and sub-continental levels, at each one of which a full range of political, trade and cooperation agreements have been concluded.

This article begins by exploring the relationship from the wider perspective of the two regions and in the most general of terms. It then concentrates on a most special part of this relationship, one in the process of negotiating a ‘free trade agreement’ (FTA) between the EU and MERCOSUR. It goes on to discuss the possible impact of the FTA and finishes by very briefly explaining why it has been long in the making.

Este trabajo analiza las diferencias de productividad entre regiones de México en los años 1988 y 1998. Se calcula la productividad total de los factores (TFP, por sus siglas en inglés) de las 32 entidades federativas y de 7 grandes regiones económicas. Las entidades federativas con la tasa de crecimiento más baja de la TFP en este periodo fueron Guerrero, Chiapas y Nayarit. En este grupo, la disminución de la TFP se debe al aumento del capital en el subsector de Electricidad. Por otro lado, los estados con la tasa de crecimiento más alta de la TFP fueron Tabasco, Veracruz, Michoacán y Tamaulipas. En este grupo, la tasa de crecimiento relativamente alta de la TFP fue causada por la disminución del insumo de capital en los subsectores con participaciones de capital relativamente grandes. Del análisis regional se observa que la tasa de crecimiento de la TFP de las regiones Capital y Norte, que son las regiones históricamente más ricas, no fue tan baja. Por otro lado, las regiones Sur y Centro, que son las regiones más pobres, tuvieron un crecimiento de la TFP muy baja. En particular, la región Sur, identificada como la región más atrasada desde el punto de vista económico, tuvo la tasa de crecimiento de la TFP más baja de todo el país.

This paper evaluates the impact of foreign bank entry on the Latin America’s financial system. Over the latter half of the 1990’s, the size and the depth of financial sector increased, and there has been a substantial progress in terms of improving systemic efficiency and stability. This trend reflects a range of reforms often related to the need for strengthening local financial sectors in the wake of crises such as the Mexican peso crisis of 94-95, but also broader market trends of consolidation, integration, privatization, and liberalization. Among structural changes, increased foreign participation has attracted academic and public sector attention. Proponents of a policy of opening domestic financial sectors to foreign ownership argue that it would facilitate capital inflows, improve the quality, pricing, and availability of financial services, and improve financial sector infrastructure. These arguments are mirrored by a set of concerns over the potentially adverse effects of such a policy. Empirical analysis of the effects of broad foreign participation in emerging market financial systems has been relatively limited, however, in part reflecting the recent timing of these developments. Most recent empirical studies suggest that foreign entry can render national financial markets more competitive, and thereby can force domestic institutions to operate more efficiently. Whether broader strategic and operational differences exist across foreign and domestically owned institutions in developing countries remains open issue.

Our analysis focuses on banks because of the bank-based structure of the Latin American financial system. The paper first takes a quick look at the current state of foreign bank penetration in the region. Next it examines the factors behind an increased foreign participation in the Latin American financial sector. After reviewing the literature on foreign banks entry in emerging markets, we present some data that demonstrate changes in the Latin American banking system. Finally, the paper draws some conclusions.

In Mexican electric power sector reform has not implemented yet, while other Latin American countries have already done sector reform in 1990s. So the state own enterprises manage the sector as well as other energy sector. However weak government budget cannot maintain investment for future demand without private participation. But current sector framework has some issues for private participation. This paper focuses regulation, tariff, sector finance, and political process, and study the sector current issues.