Argentina’s 35 million citizens will not be the only ones to pay a heavy price for that country’s latest economic crisis. The fallout may also radically alter economic policies and political relations both within Latin America and with the US. The current crisis will weaken the prospects for the Mercosur trading arrangement among Argentina and its neighbors (Brazil, Paraguay, and Uruguay) and may kill any chance of a general Free Trade Area of the Americas. The opening of the economy to trade, the encouragement of foreign direct investment, and the privatizing of state-owned firms are desirable policies. Those policies did not cause or contribute to Argentina’s crisis, and it would be a serious mistake to reverse them now in Argentina or any other emerging market.
