From the Editor

Dear Readers,

Welcome to the first issue of The International Trade Journal (ITJ)’s thirty-fourth volume, our annual special issue containing selected papers from the Western Hemispheric Trade Conference. The annual conference, which was held in Laredo, Texas between April 3–5, 2019, was sponsored by Texas A&M International University (TAMIU), the A.R. Sanchez, Jr. School of Business, and the Center for the Study of Western Hemispheric Trade, in partnership with the Universidad Autónoma de Tamaulipas (UAT) Facultad de Comercio, Administración y Ciencias Sociales.

The conference opened on Wednesday, April 3, with a keynote address by Craig VanGrasstek from the John F. Kennedy School of Government at Harvard University entitled, “Hegemony and the Hemisphere: An Historical Perspective on Inter-American Trade Relations.” His address was the fourth installment of the 2018–2019 IBC Bank and Commerce Bank Keynote Speaker Series at TAMIU. During his presentation, Dr. VanGrasstek asked what will happen as the U.S. moves from a policy of promoting free trade to a policy that allows for closure and trade discrimination. He argued that the increase in China’s economic and political power has meant that the United States has been losing its hegemonic position in the world. This, in turn, has resulted in the U.S. moving away from open markets toward trade discrimination. In this respect, he argued that the most surprising thing about Donald Trump’s views on trade is that it took such a long time for the U.S. to move in this direction given the decline in the country’s relative power. This special issue includes a review of Dr. VanGrasstek’s recent book, “Trade and American Leadership: The Paradoxes of Power and Wealth from Alexander Hamilton to Donald Trump” (VanGrasstek 2019), which discusses many of the same issues that Dr. VanGrasstek discussed in his address.

In addition to the Keynote Speaker presentation by Dr. VanGrasstek, the conference also featured two luncheon presentations. On Thursday, April 4, Steven Camarota, Director of Research at the Center for Immigration Studies, discussed U.S. immigration policy. Dr. Camarota was sharply critical of current policy arguing that although immigration has benefited the immigrants, employers, and possibly consumers, low-income workers have not benefitted in the same way. He argued that this is because current policy has favored less skilled immigrants and because of a widespread tolerance of illegal immigrants.

The keynote address on immigration was followed by a panel session on the economics of immigration restrictions. The session was moderated by Stephen J. Meardon, the Director of the Center for the Study of Western Hemispheric Trade at TAMIU. The first presenter was Annie L. Cot from the University Paris 1 Panthéon-Sorbonne. Dr. Cot discussed economists’ different views about immigration in the late 19th and early 20th century. She noted that many anti-immigrant policies were adopted over this period, although some were vetoed by presidents opposed to them. She also contended that most American economists thought immigration would hurt the United States, arguing these beliefs were often based on eugenics and scientific racism.

The second presenter in the panel session was Alexandre Padilla, the Director of the Exploring Economic Freedom Project at the Metropolitan State University of Denver. He discussed the idea that immigrants might affect their host country’s institutions. His empirical results, however, suggested the overall impact of immigration on economic freedom is empirically small and statistically insignificant. Dr. Padilla contributed an article on this topic to this special issue.

Enrique Dussel Peters, from the Universidad Nacional Autónoma de México, talked about the relationship between China, Mexico, and the United States in the second Luncheon Keynote Address on Friday, April 5. He argued that China’s rise has affected the entire Western Hemisphere. Some of these effects are direct. For example, he noted that whereas China mostly exports medium and high technology goods to Latin America and Mexico, Latin America mostly exports agricultural goods and raw materials to China. He also claimed that rising competition and conflict between the United States and China affects the United States’ relationships with Latin America and Mexico. Dr. Dussel Peters contributed an article to the special issue outlining his views on the relationship between China, the United States, and Mexico.

In addition to the keynote speaker and panel presentations, the conference also included 26 concurrent academic sessions. Authors of articles in these sessions could choose to submit their articles to this special issue. The program committee then selected the best articles from these submissions, which were then sent to referees.

The first article, by Enoch Kusi Asare, Sri Beldona, and Joseph Nketia, looks at whether firms in developing countries with audited financial statements have easier access to credit than firms without audited accounts. They find that firms with audited accounts are more likely to have overdrafts, lines of credit, and loans. But, they also find that the impact of having audited accounts is greater in countries that are highly individualistic and that have lower uncertainty avoidance. In contrast, they do not find that power distance moderates the effect of audited accounts on access to credit.

The second article, by José Carlos Ramírez Sánchez and Ricardo Massa Roldán, looked at the recent reform of the energy sector in Mexico. The authors describe the reform and discuss how the reform and the United States-Mexico-Canada Agreement (USMCA) are likely to affect energy markets in the United States and Mexico in the coming years.

The third article, by Flory Anette Dieck-Assad, Ernesto F. Peralta, and Eduardo Carbajal-Huerta, looks at remittance income in Mexico. High immigration, particularly to the United States, means that remittances are very important in Mexico. Between 1995 and 2018, they were equal to about 2.3% of Mexico’s GDP. The authors of this article find that remittances are related to private consumption and value-added in the service sector in Mexico, but not to industrial production.

The fourth article, by Rusty V. Karst and Nolan Gaffney, looks at how regional institutions affect cross-border acquisitions by Latin American multinationals. They find that these firms have greater equity participation in regions that are more democratic and that have greater capital investment. In contrast, they find a non-linear relationship between regulatory control and cross-border acquisitions. Finally, they find similar relationships when looking at a country’s regulation, democratic institutions, and capital investment relative to other countries in the same region.

The final article, by Chu V. Nguyen, looks at the relationship between lending rates and central banks’ policy related rates in the United States and seven countries in Latin America. The authors find the intermediation premium adjusted asymmetrically in the United States, Chile, Jamaica, and Mexico and adjusted symmetrically in Bolivia, Colombia, Costa Rica, and Honduras.

In addition to the full articles, several authors were invited to submit shorter notes describing their research. The first note, by Troy Lorde, Antonio Alleyne, Roger Hosein, and Mu Yifei, looks at the Caribbean region’s potential to expand exports to thirteen countries in East Asia. The authors use a gravity model to estimate how far the region is from its potential. They estimate that the region could expand exports to East Asia by about 30%. Based on estimates from other studies, they also estimate how much exports could expand if the region entered into a free-trade agreement with these economies.

The second note in this issue, by Andrew Johnson and Rusty V. Karst, describes the Ciudad Verde development south of Bogata, Colombia. Colombia has struggled with informal settlements with limited public services, poorly enforced building regulations, and haphazard development. To help address the problems associated with informal development, a public-private partnership led by a large construction company, Amarilo S.A., has developed Ciudad Verde. The area will eventually house 165,000 people in 42,000 small housing units. Although the units, which will cost between $19,000 and $37,000, will be too expensive for the poorest families, they will be affordable for people at the upper end of the lower class and the lower end of the middle class. The development includes integrated social services, green space, and access to infrastructure often not available in informal settlements. The authors discuss the challenges associated with the development and how similar models could be applied in other countries in the region.

The final note in this special issue, by Tiffany Oliver, was the winner of the conference’s award for “Best Student Paper.” Ms. Oliver summarizes the literature on how workers’ emotional intelligence affects job performance, employee behavior, adaptability, and attitudes toward work. She concludes that emotional intelligence is not only useful for managers and leaders. Instead, it is useful for employees throughout the organization.

As usual, we would like to acknowledge the people without whom the ITJ would not succeed. We would like to thank the authors for their contributions, the anonymous referees for the detailed and timely comments they provide, the team at the International Trade Institute at Texas A&M International University for processing submissions quickly and efficiently, our Editorial Board for their expert guidance, and our publisher, Taylor and Francis, for ensuring the high quality of the ITJ.

This special issue would not be possible without the hard work of everyone who contributed to another successful conference. We would particularly like to thank Stephen J. Meardon, the Director of the Center for the Study of Western Hemispheric Trade, who organized the conference and provided intellectual leadership. As with any conference, the Western Hemispheric Trade Conference only succeeds when people participate in it. We would, therefore, like to thank the people who presented their work, as well as those who chaired and attended sessions. We would also like to thank the program committee and chairs who read and assessed the submissions to the conference. The program committee members from TAMIU were Steve Sears, Christopher Boudreaux, Jorge Brusa, Ken Hung, Balaji Janamanchi, Ned Kock, Amy Palacios, Antonio Rodriguez, and Constant Yayi. The members from the UAT were Fernando Hernandez Contreras, Juan Antonio Herrera Izaguirre, Adan Lopez Mendoza, Sofia Miter Camacho, Victor Manuel Munoz Brandi, Silvia Patricia Munoz Castellanos, Gabriela Ortega Cervantes, Ramon Ventura Roque Hernandez, and Rene Adrian Salinas Salinas.

Many other people ensured the conference ran smoothly. In particular, Pedro Gallegos, Jr., Jessica M. Cavazos, and Heleodoro Lozano, who served as program coordinators. With support from Valeria Arce and Marian Gonzalez, the program coordinators ensured sessions ran smoothly and participants were cared for. Finally, we would like to especially thank Amy Palacios, the Associate Director of the Center for the Study of Western Hemispheric Trade. In addition to serving as a member of the program committee, Ms. Palacios organized sessions, arranged keynote speeches, coordinated the speakers’ travel arrangements, helped participants register, managed the program staff, and ensured everything ran without any problems.

We would like to invite all ITJ readers to attend next year’s conference in Laredo, TX on April 15–17, 2020. As we did this year, we will invite the authors of the best papers to submit them to a special issue of The International Trade Journal. Additional participants will be invited to submit short summary notes of their work. We look forward to seeing you in Laredo in April 2020!

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.