The Pacific Alliance (PA) and the Common Market of the South (Mercosur) combined represent more than 80% of regional foreign trade as well as population, and more than 90% of GDP and direct foreign investment flows, according to a new report by the Economic Commission for Latin America and the Caribbean (ECLAC).
The Pacific Alliance and Mercosur: towards convergence in diversity was ECLAC's contribution to the seminar Dialogue on Regional Integration: The Pacific Alliance and Mercosur which took place in Santiago organized by the Chilean Ministry of Foreign Relations.
The report stresses that the two groups account for the seven biggest economies of Latin America and the Caribbean, according to 2013 GDP: Brazil, Mexico, Argentina, Colombia, Venezuela, Chile and Peru. The Pacific Alliance is made up of Chile, Colombia, Mexico and Peru, while Mercosur, Argentina, Brazil, Paraguay, Uruguay and Venezuela.
In 2013, total trade between both groups of countries reached 47.4 billion dollars, with exports from the Alliance to Mercosur totaling 23.7bn dollars and a similar figure on the other way.
Given the current exchange levels, Eclac argues that convergence between the Alliance and Mercosur not only will bring benefits to their member states, but also will be an historic opportunity to move towards true regional integration.
An integration process of regional features seems more appropriate as a sign of the times and the demands of structural change in favor of equality in Latin America. The gradual convergence between the Pacific Alliance and Mercosur could prove to be a decisive catalyst of that process, Alicia Barcena, Eclac's Executive Secretary, said at the study's introduction.
However globally Latin America and the Caribbean have shown a stagnant situation in terms of exports since the end of the nineties, considering that the region's participation in world exports has fluctuated between 5% and the current 6%, despite the high prices registered by some of the commodities exported by the region during most of the last decade.
Likewise the region has shown low incorporation in the knowledge-based economy, assigning just 0.84% on average of regional GDP between 2005 and 2012 to research and development (R&D), although investment in this field in most countries of the region (with the exception of Argentina and Brazil) was below 0.5% of GDP.
According to the United Nations organization, a final integration of all Latin American and Caribbean sub-regions should be the goal for the different groups and forums in the next years. Furthermore, concerted regional action would strengthen the region's voice in the world's principal debate arenas as well as relations with other key players in the international system.