By Carmen Robledo-Lopez
The Pacific Alliance was established in April 2011 by four like-minded Latin-American economies: Chile, Colombia, Peru and Mexico. The grouping aims to promote economic integration in Latin America and to establish a platform to enhance links with Asian partners.
The bloc is relatively new but the members have already taken steps to integrate their economies. The four countries have started strategies to facilitate free circulation of goods, services and people, such as, abolition of visa requirements and tariffs in 90% of merchandises. Furthermore, Chile, Colombia and Peru have integrated their stock exchange markets and created MILA (Mercado Integrado Lationamericano); it is expected that Mexico will eventually join MILA too.
Several other countries have already expressed their interest in the Alliance and requested to be accepted either as full members or as observers. Costa Rica, Guatemala Panamá and Uruguay, as well, as non-Latin American countries such as Australia, Canada, Japan, New Zealand and Spain are observers of the Alliance.
Why has a small four-country alliance created such expectations? In 2012, the trade between the four members was equivalent to 48% of total Latin-American trade, while their combined GDP (gross domestic product) represented 39% of total of the region; both larger than Brazil’s. Additionally, the four countries have sound macroeconomic performances, healthy public finances and large young skilled populations. The Alliance seems to differentiate itself from other integration mechanisms, by the fact that the four members strongly oppose protectionism; as a result, they all have established many free trade agreements not only with Latin American neighbours, but also with other countries around the World.
The Pacific Alliance has real chances to rival the TransPacific Partnership (TPP) and create solid links in the Pacific Rim; the lack of a dominant self-driven economy might be one of the bigger virtues of the group. The Alliance is not wasting any time; the first contacts with members of ASEAN (Association of South East Asia Nations) have already been started.
The VII Summit of the Pacific Alliance will take place in Cali, Colombia, this coming May.