The effect of liberal trade on the Uruguayan economy, 1974-1989
Uruguay adopted liberal trade in 1974 based on neoclassical economic principles, and achieved its goals with deviations through 1989. This study examines how the regime affected the economy as a whole and trade in certain goods. In the first seven years, Uruguay reaped static and dynamic gains. Financial incentives to exporters showed a strong correlation with growth. Tariffs have not been lowered to remove significant protection of the internal market. From 1982 to 1989, Uruguay's production, exports and investment have not grown consistently, and living standards have worsened. Uruguay has had difficulty maintaining growth and has fallen behind other nations. The structure of Uruguay's exports changed from primary products to goods which contain more value added. Due to economic integration, Argentina and Brazil receive an increased share of Uruguay's exports. Uruguay's future is bound with these countries, with which it shares a similar economic structure.