Mónica Blanco-Jiménez, Georgina Parra-Irineo, Nayra González-González and Arturo Tavizon-Salazar
Abstract
This chapter discusses the creation of the Pacific Alliance comprising four countries: Mexico, Chile, Peru, and Colombia. It shows that is not only a free trade agreement between these countries but also a multidimensional regional integration with political, economic, and cultural perspectives. Programs and actions have been structured in a way that allows and promotes integral growth of Latin American citizens. For this reason, it is important to analyze in this chapter the opportunities that Alliance Pacific generates with respect to each of these three aspects. (1) Political and diplomatic implications like eliminating visa requirements for the members, sharing some embassies, facilitating labor mobility between these countries, and proposing the creation of a joint parliament. (2) Economic and trade implications with a gradual elimination of tariffs that will allow companies to be more competitive, creation of different government agencies in each country to support business and promote intra-regional trade of goods and services, and create a joint platform to promote innovation, entrepreneurship and gender equity. Finally, (3) Cultural and educational implications, as the creation of “Student and Academic Mobility Platform” of the Pacific Alliance with scholarships for students and researchers, the integration of a “Technical Education Group” to foster integration and social inclusion of children and adolescents, and the creation of “Sports Diplomacy Program” and a “Scientific Research Network on Climate Change.” Although there are still several challenges for improvement in the Pacific Alliance, it is an agreement that will bring stability, welfare, and development effects for the members of these countries.
Introduction
The emergence of the Pacific Alliance, comprising Mexico, Chile, Colombia, and Peru, with Costa Rica and Panama as aspirants, has a strong impact on the regional integration process in Latin America as it moves toward consolidation. The Alliance favors trade and the economy of the member countries. However, unlike many other free trade agreements, this treaty is aimed at multidimensional regional integration – not only economic but also social, political, cultural, educational, and sports cooperation – that allows integral growth of Latin American citizens.
For this reason, the Pacific Alliance follows a model of openness with a vision of “open regionalism,” in which the majority of the four member countries have important trade agreements with other countries of the world. This allows, on the one hand, for the members to openly tackle globalization and, at the same time, to foster a profound internal regional integration where all productive factors, goods and services, labor, and capital can circulate without boundaries. This strength will enable the member countries of the Alliance to be more competitive in the face of the new global challenges and dynamics of the economy and international trade (Briceño Ruiz, 2013).
Another strength is that Chile, Colombia, Mexico, and Peru not only have a great common history and cultural brotherhood because of their colonization by Spain but also have a front view of the Pacific Ocean. This provides them to have a giant road of opportunities between them and other continents, especially with Asian countries.
Finally, collectively, they are the ninth-largest economy in terms of gross domestic product (GDP). They have a market of about 222 million people, representing the fifth-largest population worldwide (Table 1.1). With an average GDP per capita of US$ 9,000, they keep their economies growing and, collectively, represent 55% of Latin American exports. Therefore, this integration in the Pacific Alliance allows the economy of these countries to be promoted, encouraged by fostering joint transactions, thereby providing opportunities for foreign investment and, above all, improving their economic indicators.
Table 1.1. Pacific Alliance: Economic Indicators.
This economic growth promoted within the Pacific Alliance will produce effects of stability, well-being, and development for the members of these countries. Considering the above, the purpose of this chapter is to show the extensive list of actions and programs generated, with their political–diplomatic as well as economic–commercial and cultural–educational implications for the four member countries of the Alliance.
Political–diplomatic Implications
Mexican foreign policy has had a change in its trade regime when it opened its borders in the 1980s, going from trade protectionism to an open system in order to enter the General Agreement on Tariffs and Trade (GATT) in 1986, especially with the signing of the North American Free Trade Agreement. As is known, foreign policy is the capacity of states to respond to the external situations in the international system; this is the reason why countries open a dialogue looking for cooperation and understanding, which allows them to defend their interests internationally (Marcsak & George, 2016a, 2016b).
It should be noted that this approach by the Mexican government with its northern neighbors brought a loss of leadership in the Latin American countries. Therefore, in early 2000, Mexico attempted to revert this situation and has sought to make use of horizontal multilateralism, where regional integration is no longer limited to cooperation and openness but it also ventures into an interaction of the economic and political aspects. This in turn has softened the dividing line between the above aspects, and thus, political integration is a consequence thereof (Ardila & Krzywicka, 2015, p. 38; Velázquez Flores et González Cruz, 2016).
This policy of rapprochement with the Latin American and Caribbean countries continues to be promoted by the current president of the United Mexican States, Enrique Peña Nieto, who points out that the main objective is “to strengthen the presence of Mexico in the world, so as to diversify political, trade, investment, tourism and cooperation ties” (Peña Nieto, 2017). Therefore, the Pacific Alliance is an excellent means to achieve this goal; it will allow better liaison among Chile, Colombia, Mexico, and Peru and improve its position in the international arena, so it is natural that Mexico has been seen as a driver of these objectives.
As noted, the foreign policy of the Pacific Alliance countries has promoted the use of diplomacy as a negotiating mechanism that has successfully achieved consensus and very important agreements, all of which have permeated the internal policies in the four countries. This allows the main objectives of the Pacific Alliance to be fulfilled, with concrete and effective actions and programs that provide short-, medium-, and long-term benefits for all citizens of these countries. It also has several political implications for the Pacific Alliance’s diplomatic agenda: the policies of mobility among the member countries, migration, and the improvement of the quality of life of individuals. These implications are as follows:
- An outstanding achievement for the foreign policy of these countries was the elimination of visas among these four countries as of November 1, 2012. This will facilitate mobility of people, which in turn will strengthen tourism and the free flow of people among the member countries (Alianza del Pacífico, 2015). This elimination is particularly intended to encourage the exchange of students, professors, and researchers to increase academic links.
- To reinforce a joint diplomacy that strengthens the union and integration between these countries, some embassies and common consulates were established in 2013 to provide the Alliance’s citizens with the necessary diplomatic services. Hence, now several of these countries share six diplomatic locations: Ghana, Vietnam, Morocco, Algeria, Azerbaijan, and the OECD’s Diplomatic Mission (Flores Liera, 2016).
- In 2012, a parliament of the Pacific Alliance was also proposed, which was initiated with the commencement of a plenary session of parliament, comprising 10 representatives from each of the four congresses to determine the future functions of parliament. On July 11, 2013, the Inter-parliamentary Commission was created with representatives of the four congresses of the member countries. Its main function is to promote the formulation of laws from agreements reached by the governments of the Alliance. Therefore, this integration in Latin America is not only of a commercial nature but it also seeks political and legal integration (Informador, 2013).
- It is important to point out that in 2013, to promote concrete actions with the aim of improving some migration problems that exist among the member states, the program “Labor Mobility in the Pacific Alliance” was created. For this aspect, governments have had meetings with businessmen and national and international experts from the member countries of the Pacific Alliance to analyze the implementation of labor mobility in an orderly manner, particularly as a development tool that can benefit both the workers and their families in the countries of origin and destination; this is known as “the triple victory” (Insa & Espínola, 2015). Therefore, in July 2015, the Inter-Institutional Agreement on the Implementation of an Information Consultation Mechanism with Migration Purposes to Facilitate Mobility of Persons was created (Alianza del Pacífico, 2016b).
- Finally, improving roads and port infrastructure for greater physical interconnection among the countries and supporting initiatives in terms of electrical and energy interconnection is also expected.
Economic and Trade Implications
As discussed earlier, the Pacific Alliance agreement has political–diplomatic implications that have enabled the creation of one of the largest economic and financial blocs in Latin America. As regards the commercial aspect, several actions have been developed to foster a much deeper economic union, with the following implications:
- Intensive negotiations were conducted so that the trade agreement facilitates trade with a tariff reduction on most products, along with the reduction of trade barriers, speeding up of dispute settlement, and facilitation of trade in services. This in turn will accelerate import and export operations among the member countries. Therefore, an Additional Protocol to the Framework Agreement of the treaty (PAAM) was signed in February 2014, which entered into force in 2016, laying out the necessary guidelines for the proper conduct of free trade, thus benefitting all parties (Alianza del Pacífico, 2016c). This protocol of tariff reduction allows for a gradual elimination of tariffs within the next three–seven years in more than 92% of the products, with the exception of the agro industry, where taxes will be relieved in a term of 17 years.
It should be noted that this treaty does not require a common external tariff like most treaties, since the PA countries continue to maintain the tariffs they signed with other countries in each of their previous treaties. To date, they have signed approximately 76 trade agreements with other countries.
- Another important point is the support provided to importing and exporting businessmen to facilitate business among the member countries and thus promote intra-regional trade with goods and services through different government agencies of each of the four countries: Chile, Colombia, Peru, and Mexico, as shown in Table 1.2.
- In addition to the support of these organizations, a cooperation fund of US$ 1 million between the four countries was created in 2013, during the seventh summit of the Pacific Alliance; this fund will boost the incursion into new markets and, above all, it will strengthen the alliance as an economic bloc, which will allow its optimal functioning.
- In 2012, the Business Council of the Pacific Alliance (CEAP) was created; it comprises businessmen and representative associations of the four countries, with its main objective being the promotion of cooperation among entrepreneurs of the Pacific Alliance and the global entrepreneurial community. A further purpose of it is proposing actions aimed at third-world markets,...
