Pacific Alliance Summit

In bloc-happy Latin America, the Pacific Alliance hopes to stand out

 

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PACIFIC ALLIANCE

Its members Mexico, Colombia, Peru and Chile:

•  Represent 36 percent of the population of Latin America and the Caribbean

•  Represent 35 percent of the GDP of the region

•  Had average GDP growth of 5 percent in 2012

•  Would be the world’s 8th largest economy

•  Represent 50 percent of all Latin American and Caribbean trade

•  Capture 26 percent of all foreign direct investment in the region

Source: Colombian Foreign Ministry


jwyss@miamiherald.com

Latin America is fond of carving itself up into an alphabet soup of regional trading blocs and political configurations. There’s the CELAC, UNASUR, Mercosur, ALBA and the Andean Community, just to name a few.

But the two-year old Pacific Alliance is already something of a standout. On Thursday, the presidents of Colombia, Mexico, Peru and Chile, which form the Alliance, will be meeting in Cali, Colombia.

The group is hoping to tear down business barriers and allow the free flow of goods, services and labor. It also wants to be the regional nexus for trade with Asia.

Unlike other regional blocs, which are essentially “political talk shops,” the Pacific Alliance can boast results, said Eric Farnsworth, of the Council of the Americas.

Already, Mexico has dropped visa requirements for Colombians and Peruvians, the four nations share investment and commercial offices in some nations, and are ready to begin sharing some embassies in Asia and Africa. The countries are also offering educational exchanges, and all four have free trade agreements with each other — a prerequisite to joining the bloc.

“In the two years since the Alliance was launched... they can talk about things like real financial integration and labor mobility, and that is real progress,” Farnsworth said. “That is attracting a lot of people’s attention, particularly if you compare it to all these other groupings where nothing really gets done.”

The guest list at the summit hints at its potential. Along with the presidents of the four member states, Costa Rica’s Laura Chinchilla and Guatemala’s Otto Pérez Molina are expected, as well as the prime ministers of Canada and Spain.

Panama and Costa Rica have both requested admission. Canada, Australia, Spain, New Zealand, Uruguay, Japan and Guatemala are observer nations, and Portugal, France, El Salvador, Paraguay and the Dominican Republic are requesting observer status.

“It’s quite incredible that during this short process… we have so many observers and interested nations,” said Colombian Foreign Minister Angela Holguin. “This alliance goes beyond rhetoric.”

Trade blocs rise and fall. The 43-year-old Andean Community was once a premier regional bloc, but it has been on life support since Venezuela — its largest member —pulled out in 2006. Mercosur, also once a regional darling that includes the powerhouses of Brazil and Argentina, has been snagged in political turmoil after it expelled Paraguay last year and included Venezuela.

Other highly touted organizations — such as CELAC, which includes every nation in the hemisphere except the United States and Canada; and UNASUR, which includes every South American nation — have yet to produce major breakthroughs.

Colombia Vice Minister of Commerce Gabriel Duque said the difference between the Alliance and other blocs is that it’s based on “like-minded” leadership rather than geography. Ecuador, for example, is sandwiched between Peru and Colombia but doesn’t have the free-trade credentials to join the group; neither does Brazil for that matter.

The fact that the Alliance is being driven by the presidents, not by ministerial committees, also makes it powerful, Duque said.

“The political will and ambition are coming from the top, not from the technocrats,” he said. “I tell my colleagues that the presidents are traveling in a plane and that we’re running to catch up because the level of ambition we’re seeing at that level is incredible.”

Colombian President Juan Manuel Santos has hinted at the ambition, saying earlier this week that the Alliance was destined to be “the most important integration project in the history of Latin America.”

If Canada, Spain or another non-Latin country is admitted to the group “that’s where, in my view, this becomes a tremendously exciting project,” Farnsworth said. “Now you have the potential to lay the groundwork for a global trade relationship that’s based on willing partners.”

But only time will tell if the bloc will remain a regional powerhouse, become a global player, or go the way of other blocs.

Six years ago, also in Cali, almost a dozen nations of the region launched the Latin American Pacific Arch, which had many of the same ambitions as the Pacific Alliance. Nobody talks much about the ARCO del Pacifico anymore. On Wednesday, its website wasn’t even working.

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