Pacific Alliance

 

The Pacific Alliance consists of four countries in a bloc – Chile, Colombia, Mexico and Peru.

The following are seeking associate membership – Australia, Canada, New Zealand and Singapore.

It is not a customs union.

Of these economies, Mexico is the largest by GDP (1.5 trillion USD, #15 in the world).

These countries are all at the research stage of CBDCs and there is no stated interest in actually adopting CBDCs.

 

 

 

 

 

 

Chile has found success in diversification, reported by the IMF –

As suggested in this paper, this accomplishment reflects Chile’s strength in policy areas that foster non-mineral exports (including complex exports), making the country a role model in export diversification and complexity policies among emerging market countries.

The EU reports how Asia Pacific trade is the focus for the Pacific Alliance driven by China’s demand.

EU Report

FDI

Foreign Direct Investment is vital to growth and Mexico has experienced high growth in FDIs (over 29 billion USD). This is due to trade agreements via USMCA and the Pacific Alliance.

New Silicon Valley style of developments are happening in Latin America – in Chilecon (Chile), Medellin (Colombia), and Guadalamara (Mexico).

The one in Mexico is gaining a lot of interest with 78,000 IT staff.

 

Digitization

 There is a clear digital agenda for the Pacific Alliance, four axes: economy, connectivity, government and digital ecosystems; through permanent public-private dialogue.

The Development Bank of Latin America took a role in structuring the Pacific Alliance Infrastructure Fund  (PAIF) which has a digitzation component.

Cross-Border 

All Pacific Alliance members have bi‑lateral FTAs with one another. In addition, three of the four members – Mexico, Chile and Peru – are parties to the CPTPP. One of the main achievements of the Pacific Alliance to date has been the negotiation and successful implementation as of 1 May 2016 of the additional protocol to the Framework Agreement, which eliminated with immediate effect duties on 92 percent of originating goods traded between Mexico, Chile, Colombia and Peru. Duties on the remaining eight percent of goods are being gradually phased out, although sugar and certain other products have been excluded from the tariff liberalisation commitments.

 

Diversification

The Pacific Alliance FTA and its Modifying Protocol, signed in February 2014 by Colombia, Chile, Mexico
and Peru, also contain provisions on e-commerce.

The e-commerce chapter (Chapter 13) covers
measures affecting electronic transactions of goods and services, including digital products. 

 

 

 

Economic Outlook

The Pacific Alliance faces several challenges in the medium-term. First, it must successfully incorporate Costa Rica as a full member, the first accession since the Pacific Alliance was formed. Further, it must clearly define how to fulfill one of its driving forces: to serve as a bridge between Asian and Latin American countries on both sides of the Pacific.

ECLAC Report

 

 

 

By cryptorocks_editor

Editor.