The Pacific Alliance

The Pacific Alliance:
A Chilean Perspective
Manfred Wilhelmy
Executive Director
Chile Pacific Foundation,
Professor, Institute of International Studies, University of Chile
September 2015
Integration in Latin America (I)
• Independence: The Bolivarian ideal, 1826
• Pan Americanism: The United States and regional cooperation
• Industrialization via import substitution and the role of ECLAC
(CEPAL)
• The influence of European integration, 1957
Integration in Latin America (II)
• Towards a regional free trade zone: ALALC and ALADI, 1960
• The supranational model: The Andean Pact, 1969
• The Atlantic economies: Mercosur, 1991
• Latin America and the Asia-Pacific region: Open regionalism
through APEC
Latin America and The Asia-Pacific
• The P4: New Zealand, Chile, Singapore, and Brunei Darussalam
• From P4 to TPP
• Latin American Regionalism to engage the Asia Pacific: “Pacific
Arc”
• President Alan García: a Pacific Alliance (Mexico, Colombia, Peru,
and Chile) 2011 -
The Pacific Alliance in Numbers
• Land area: 5,15 mill Sq. Km
• Population: 216 million, 35% of Latin America and the Caribbean
• 37% of regional GDP (38% PPP)
• 8th. economy in the world (2,8% of global GDP 2014)
• 52,7% of Latin American and Caribbean foreign trade (2013)
• AP: Chile’s 6th. trading partner 2014 (4.06 USD bn exports, 5,12 USD bn
imports)
P.A. Members:
Mexico
• Largest P.A. economy
- land area 1,96 mill. sq. Km.
- population 119 mill.
- foreign trade volume USD 750 mill. Bn (2012)
• Closely integrated into NAFTA
- 70 % of trade volume
- participation in value chains (geographical advantage)
• Strategic location in North America: Pacific, Gulf & Caribbean,
Central America
• Member of APEC, TPP
• HDI 0,756 (2014)
P. A. MEMBERS:
COLOMBIA
• 2nd P.A. economy
- Land area 1,14 mill., sq. km
- Population 48 mill.
- Trade volume USD 115 bn (2012), 3rd. in P.A.
• Combines rich natural resource base (oil, coal) and manufacturing
• Strategic location: Caribbean & Pacific coasts
• HDI 0,711 (2014)
P.A.MEMBERS:
PERU
• Land area 1,28 mill. Sq. Km.
Population 31,5 million
Trade Volume (2012) US$ 88 bn
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Large exports of commodities (mostly minerals)
Active policy of FTA negotiations
Member of APEC (host in 2016), TPP
HDI 0,741 (2014)
P.A. MEMBERS:
CHILE
• Land area 0,756 mill. Sq. Km
Population 17 mill. (both smallest in P.A.)
Foreign trade volume USD 153 bn (2012)
USD 148 bn (2014) ( 2nd. In P.A.)
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Largest relative exposure to Asian markets (2014 40,8% of exports)
High incidence of commodities, esp. minerals (copper, iron, ore …)
FTAs with most large economics
Member of APEC, TPP
HDI 0,822 (2014)
THE GOALS OF THE PACIFIC ALLIANCE
Vision: “deep integration” (Paranal treaty, 2012)
What is the meaning of this concept?
• Trade
FTA among members a basis for further integration
- Tariff liberalization
- Elimination / Reduction of NTBs - e- commerce
- Common rule of origin
- Single Windows, interconnected (VUCEs)
- Cooperation in export promotion to 3rd. countries
P.A. Goals (Cont’d)
• Free movement of persons
- Elimination of visas
- Business stays to be extended
- Exchange of migration data
• Free movement of capital flows
- Facilitation of FDI
- Stock Exchange integration (MILA)
THE GOALS OF THE PACIFIC ALLIANCE
• Cooperation
- Science & technology: Joint work on climate change
- Higher education: exchanges of students, faculty
- Civil Society: Volunteer programs
- Tourism: Develop common standards, promote integrated
packages
- Infrastructure: Roads, air transport, connect energy grids
- Diplomacy: Share facilities in selected locations, esp. new embassies
PACIFIC ALLIANCE:
FACTORS OF STRENGTH
• Political support of members
- Commitment of leaders: Presidents Calderón, Peña Nieto (Mexico),
García, Humala (Peru), Piñera, Bachelet (Chile), Santos (Colombia)
- 10 Presidential Summits, 2011 – 2015
- Founding treaty (Paranal, 2012) now in force
- Additional Protocol (trade disciplines)
- A pragmatic, realistic approach
PACIFIC ALLIANCE:
FACTORS OF STRENGTH
• No heavy bureaucracy – Committed “pro Tempore” secretariats
• Engagement of private sector
- CEAP
- MILA
• International support
- Applications for membership from Panama, Costa Rica
- Large member of observer countries, including the US, China, Japan,
Korea, India, Germany, UK, France, Italy, Sapin, Canada … in Southeast
Asia, Singapore, Thailand, Indonesia (applications)
PACIFIC ALLIANCE: CHALLENGES
1. Design a roadmap
• 2020
• 2030 and beyond
Inspiration: The Bogor Goals?
2. Develop regular work cycles, including summits but not too
dependent on Presidents
3. Establish P.A. policy support core
Inspiration: Apec Secretariat PSU?
Challenges (cont’d)
4. Align national bureaucracies
5. Develop roots, build up support in civil societies beyond political
and business elites
6. Engage observer countries
7. Build relations of cooperation with Mercosur and other
groupings
8. Develop a cooperation agenda with the Asia-Pacific region
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ASEAN area
China
Korea
Japan
Conclusion: Chilean Perspective
on the Pacific Alliance
• Chile supported the Pacific Alliance to succeed the “Pacific Arc”
• Underlying conception of “like minded Countries” helpful in context of
bilateral issues
• Facing Brazilian reservations: “Pacific” vs. “Atlantic” Alliances?
• Government of President Bachelet: work towards “convergence” of Pacific
Alliance and Mercosur
• They key should be cooperaction
Thank you for your attention!