Pretty good news from Latin America: the Pacific Alliance

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Pretty good news from Latin America: the Pacific Alliance

While Venezuela, at one time arguably the rich­est coun­try in the region, sells itself to Cuba and careens into dis­as­ter, and Argentina, another has-​been, defaults yet again, it is easy to despair about the state of things in our hemisphere.

It comes as a relief to read about the Pacific Alliance, a com­mon mar­ket in the mak­ing between Chile, Colom­bia, Mex­ico and Peru.

Do not con­fuse the Pacific Alliance with the Trans-​Pacific Part­ner­ship (TPP)

The Trans-​Pacific Part­ner­ship (TPP) is an ambi­tious, 21st cen­tury trade agree­ment that the United States is nego­ti­at­ing with 11 other coun­tries through­out the Asia-​Pacific region (Aus­tralia, Brunei Darus­salam, Canada, Chile, Japan, Malaysia, Mex­ico, New Zealand, Peru, Sin­ga­pore, and Vietnam).

The Pacific Alliance is about get­ting things done, with the pres­i­dents of the four coun­tries attend­ing meet­ings with spe­cific state­ments and detailed time­lines to advance agreed-​upon goals (empha­sis added):

Also in con­trast to the under­ly­ing pur­pose of other group­ings — includ­ing eco­nomic blocs such as Mer­co­sur — Pacific Alliance mem­bers have achieved con­sen­sus on a model of eco­nomic and polit­i­cal inte­gra­tion aimed at attract­ing invest­ment and cre­at­ing export plat­forms for the global mar­ket. All have opted for a prag­matic rela­tion­ship struc­tured around bilat­eral free-​trade agree­ments (FTAs) with the U.S., the EU and Asian countries.

The Pacific Alliance is per­ceived as a geopo­lit­i­cal coun­ter­weight to ide­o­log­i­cal and polit­i­cal trends on dis­play in coun­tries rang­ing from Brazil to Venezuela. It looks out­ward, act­ing in some ways like a free-​trade zone (through the sev­eral bilat­eral accords among its mem­bers). But it is also ori­ented toward pro­mot­ing greater coop­er­a­tion and part­ner­ship among mem­ber coun­tries. Another key objec­tive is facil­i­tat­ing entry into the Asian mar­ket and, par­tic­u­larly, cre­at­ing greater bar­gain­ing power than any of the indi­vid­ual coun­tries could muster sep­a­rately when approach­ing China. At the same time, the Pacific Alliance seeks a com­pet­i­tive edge for its mem­bers when com­pet­ing with Asian coun­tries for trade with the U.S. by pro­vid­ing bet­ter — and cheaper — prod­ucts.

Last March I wrote about Vice-​President Biden’s meet­ings with the four Pacific Alliance presidents.

Now in New York for the UN Gen­eral Assem­bly, the pres­i­dents of Chile, Colom­bia, Mex­ico and Peru issued a joint arti­cle , Chile, Colom­bia, Mex­ico, Peru: Bet­ter Together sum­ma­riz­ing the Alliance’s pur­pose (empha­sis added),

We firmly believe that the main pur­pose of the Pacific Alliance is to improve the wel­fare of all our cit­i­zens through the pro­mo­tion of growth and eco­nomic devel­op­ment, and the improve­ment of the com­pet­i­tive­ness of our economies.

Among the mea­sures: review­ing for­eign invest­ment laws so they are more attrac­tive to for­eign com­pa­nies, agree­ing on zero per­cent tar­iffs for 90 per­cent of traded goods, coop­er­at­ing on envi­ron­men­tal and social issues and sci­en­tific and tech­no­log­i­cal inno­va­tion, police and cus­toms coop­er­a­tion to track cross-​border crim­i­nal activity.

The Alliance has many chal­lenges ahead, not the least of which involve polit­i­cal pop­ulist ten­den­cies among their lead­ers, but, con­sid­er­ing what it has accom­plished on its first three years, that’s pretty good news to celebrate.

Fausta Rodríguez Wertz writes on US and Latin Amer­i­can pol­i­tics, news, and cul­ture at Fausta’s Blog.

While Venezuela, at one time arguably the richest country in the region, sells itself to Cuba and careens into disaster, and Argentina, another has-been, defaults yet again, it is easy to despair about the state of things in our hemisphere.

It comes as a relief to read about the Pacific Alliance, a common market in the making between Chile, Colombia, Mexico and Peru.

Do not confuse the Pacific Alliance with the Trans-Pacific Partnership (TPP)

The Trans-Pacific Partnership (TPP) is an ambitious, 21st century trade agreement that the United States is negotiating with 11 other countries throughout the Asia-Pacific region (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam).

The Pacific Alliance is about getting things done, with the presidents of the four countries attending meetings with specific statements and detailed timelines to advance agreed-upon goals (emphasis added):

Also in contrast to the underlying purpose of other groupings—including economic blocs such as Mercosur—Pacific Alliance members have achieved consensus on a model of economic and political integration aimed at attracting investment and creating export platforms for the global market. All have opted for a pragmatic relationship structured around bilateral free-trade agreements (FTAs) with the U.S., the EU and Asian countries.

The Pacific Alliance is perceived as a geopolitical counterweight to ideological and political trends on display in countries ranging from Brazil to Venezuela. It looks outward, acting in some ways like a free-trade zone (through the several bilateral accords among its members). But it is also oriented toward promoting greater cooperation and partnership among member countries. Another key objective is facilitating entry into the Asian market and, particularly, creating greater bargaining power than any of the individual countries could muster separately when approaching China. At the same time, the Pacific Alliance seeks a competitive edge for its members when competing with Asian countries for trade with the U.S. by providing better—and cheaper—products.

Last March I wrote about Vice-President Biden’s meetings with the four Pacific Alliance presidents.

Now in New York for the UN General Assembly, the presidents of Chile, Colombia, Mexico and Peru issued a joint article , Chile, Colombia, Mexico, Peru: Better Together summarizing the Alliance’s purpose (emphasis added),

We firmly believe that the main purpose of the Pacific Alliance is to improve the welfare of all our citizens through the promotion of growth and economic development, and the improvement of the competitiveness of our economies.

Among the measures: reviewing foreign investment laws so they are more attractive to foreign companies, agreeing on zero percent tariffs for 90 percent of traded goods, cooperating on environmental and social issues and scientific and technological innovation, police and customs cooperation to track cross-border criminal activity.

The Alliance has many challenges ahead, not the least of which involve political populist tendencies among their leaders, but, considering what it has accomplished on its first three years, that’s pretty good news to celebrate.

Fausta Rodríguez Wertz writes on US and Latin American politics, news, and culture at Fausta’s Blog.