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Alliance of the Pacific emerges as a potent challenge for Mercosur and Brazil

Friday, June 8th 2012 - 02:08 UTC
Full article 9 comments
Mexican president Calderon, the alliance represents 55% of Latam’s exports and attracts 38% of foreign investment Mexican president Calderon, the alliance represents 55% of Latam’s exports and attracts 38% of foreign investment

The leading countries of Latin America’s Pacific Rim with the exception of Ecuador and a few Central American countries, agreed to conform the Alliance of the Pacific an ambitious integration project which has good relations with Washington and is targeted to accompany the growing influence of the Asia-Pacific basin.

It is also a strong challenge for the dominant power in the region Brazil and its Mercosur exhausted project since Chile, Peru, Colombia and Mexico make up a block with a population of 215 million, a 2 trillion dollars GDP that makes them the ninth economy of the world competing with Italy.

“It is the most important integration process of Latin America” said Colombian president Juan Manuel Gomez.

“Our economies together ranks us ninth in the world behind Italy with a GDP that is 40% of Latin America, manages 55% of the region’s exports and attracts 38% of all foreign investment”, pointed out Felipe Calderón, president of Mexico.

“Even when we are less in population and in the size of our economies compared to our brothers from Mercosur, we export double in volume and value than Mercosur, we have an extraordinary potential”, added President Calderón.

Peruvian president Ollanta Humala offered the political touch: “this new space is not geared to oppose any of the other Latin American integration projects, but rather to complement”.

Chile’s Sebastián Piñera said the Alliance of the Pacific is geared to join forces and look towards Asia and the Pacific so that together we can achieve what we couldn’t individually”.

Mexico, Colombia and Chile and the three most open economies in Latam and have free trade agreements with the US. Peru is on the same track waiting for its implementation. His predecessor Alan García completed the agreement in April 2011.

Humala who faces growing social problems because of indigenous peoples’ rejection of the mega-mining projects and the fact that poverty is still rampant in spite of several years running of bonanza has stated that his government is more geared to fighting poverty and promoting education.

According to the Spanish press which was present at the signing of the Alliance of the Pacific in Chile on Wednesday because King Juan Carlos was visiting Chile said that “Peru was precisely the country Brazilian diplomacy was expecting would not join the alliance”.

The Spanish press points out that the advantages of the new grouping is cohesion asn the fact that the Andean group is split over the free trade agreement with the European Union, Ecuador and Venezuela have opted for Mercosur. But Mercosur is also in disarray because of the trade barriers imposed by Argentina even on the associates of the group.

“The alliance thus is pointing to, although it tries to deny it, as a clear liberal alternative to the “Bolivarian” project headed by President Hugo Chavez and also to Brazil that has become the hegemonic power of the continent”.

Reports also indicate that Costa Rica and Panama from Central America have already applied to become members of the Alliance of the Pacific, but will have to wait until Chile and Colombia work out their own bilateral agreement. Delegations from Japan and Australia were also present during the deliberations in the north of Chile where the four presidents signed the founding document of the new space.

Meanwhile last week and in Buenos Aires Ecuador advanced in negotiations to become a full member of Mercosur which currently is made up of Argentina, Brazil, Paraguay, Uruguay and Venezuela in the process of incorporation.

“We’ve started procedures for the incorporation of Ecuador and a second round is now scheduled to take place in Quito”, said Argentine sources.

“This is particularly significant in the current international context of economic, political and social uncertainty” according to an official release from the Argentine Foreign ministry, which added that “the conditions are ripe to take advantage of this historic opportunity for the region and the daily work in the framework of Mercosur points in that way”.

Categories: Economy, Politics, Latin America.

Top Comments

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  • JohnN

    This Alianza del Pacifico is an exciting new trade organization, and the Mercopress story hits all the hot buttons to explain why. Great that Perú is joining - Humala is turning out to be doing a good job as president. Also great that our Canadian Foreign Minister John Baird was in Chile for the AP initiation:

    Jun 08th, 2012 - 03:21 am 0
  • LEPRecon

    If this goes ahead it will be good news. Mercosur needs competition as it is stagnating, and if all goes well this new alliance can become the leading economic block of countries in Central and South America.

    Jun 08th, 2012 - 10:27 am 0
  • Condorito

    It is good news for the countries signing up to this new alliance, but I don’t see how this is bad for Mercosur. It is not a zero sum game.

    Peru might turn out to be a loose cannon in this alliance. All is well right now but many Peruvians are deeply anti-Chilean and extremely regionalist – it will take a strong hand to keep them on course.

    Brazil should ditch Mercosur, they are big enough to go it alone and should be focusing on relations with other major trading blocks. Who in their right mind would want Chavez, CFK and Correa as their socios!

    Jun 08th, 2012 - 02:37 pm 0
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