Chile, Peru, Colombia and Mexico signed an accord Wednesday creating the Pacific Alliance to more deeply integrate their economies, and develop new trade links with the Asia-Pacific region.
All the countries involved have the most open and outwardly focused economies of the region which contrasts strongly with other experiences on the Atlantic side such as Mercosur, which in two decades has virtually remained stalled on its original integration and free trade plans.
From the heights of Paranal, in the most arid desert in the world and under the clearest of skies, we have signed a pact officially giving birth to the Pacific Alliance, Chilean President Sebastian Piñera said.
He was speaking at a presidential summit near the giant telescopes of the Atacama desert to launch the new alliance, attended also by Mexico's Felipe Calderon, Peru's Ollanta Humala and Colombia's Juan Manuel Santos, as well as the presidents of Costa Rica and Panama, and others as observers.
The creation of the Latin American bloc -- with a total of 215 million consumers and a combined GDP of more than $2 trillion -- was proposed last year in Lima.
In very little time, we have succeeded in moving forward rapidly, said host Piñera, explaining that it would bring about a deep integration that will go far beyond free trade and reach out to the Asia-Pacific region.
The Pacific Alliance's economic potential is significant, said Mexico's Calderon, noting that the new alliance groups together Latin America's fastest growing economies such as Peru and Chile.
Colombia's Santos called it the most important integration process in Latin America.
There are no incompatibilities or exclusion vis-a-vis other integration efforts. We are against nobody but rather in favour of even greater integration, he said.
Santos was echoed by Peru's Humala who insisted that the new alliance doesn't look to displace other groupings, such as the Andean Community, or the Union of South American Nations.
Costa Rican President Laura Chinchilla, who attended as an observer alongside Canada's foreign minister and Spain's King Juan Carlos, formally asked to join the alliance.
Although not expressed the leaders from Latin America’s most open economies will not only try to increase trade along the Pacific rim of the region but will also distance themselves from countries such as Argentina and Brazil that are raising import restrictions amid the global slowdown.
Those attending “are the most outwardly focused and open economies in the region” said Abraham Lowenthal, a Latin American expert at The Brookings Institution in Washington “This is in keeping with where these countries are going in terms of diversifying their international economic relations.”
The alliance plans to remove barriers not covered under existing bilateral free trade agreements, such as the free movement of people, establishing a bloc that accounts for more than 35% of Latin America’s GDP.
The drive toward free trade contrasts with the slow pace of integration in the four-nation Mercosur trade bloc led by Brazil and Argentina, which hasn’t achieved its goal of a common market more than two decades after its creation.