In only two years, the Pacific Alliance accomplished important goals mainly in terms of mobility, academic and trade cooperation. Among them, we can mention:
• The elimination of visa requirements for citizens of the four member countries.
• Establishment of a platform for academic mobility.
• Growth of tourism cooperation.
• Creation of the Pacific Alliance Business Council, which aims to promote the economies of its members, improve integration and encourage joint actions towards third markets, especially the Asia Pacific area.
• Coordination of the four trade promotion agencies of the Pacific Alliance (ProChile, Proexport, ProMexico and PromPeru). Apart from joint activities, there is an agreement to share some offices abroad.
• Signature of the Additional Protocol of the Framework Agreement. This one was signed recently and is the most important achievement for trade and business. The agreement establishes and will allow as soon as it enters into force:
o The elimination of tariffs on 92% of the products immediately and on the other 8% gradually.
o Rules of origin.
o Investment promotion.
o Health cooperation.
o Energy integration.
o Stock Exchange integration.
The signature of the Protocol is per se a meaningful achievement, but it also involves new objectives and challenges. The actual most ambitious projects of the Alliance, the common market and the stock exchange integration, will require a deepener cooperation and joint actions of all the members’ government levels in terms of regulation improvements, intellectual property, infrastructure, movement of people and services of investment and trade.
Furthermore, the Pacific Alliance pretends to strengthen the relationship with third countries in order to harness more business opportunities, starting with the Asia Pacific zone and the already existing observer countries. In the case of the observers, each one of them will develop joint agendas on economic issues, education, innovation, science, technology, micro/small and medium enterprises, development, etc. While with the Asian Pacific countries, the focus will be in promoting commercial, political and security coordination.
All these aspects together with the characteristics of each member mentioned in the previous chapter offer competitive advantages for international business and have made the Pacific Alliance more attractive for foreign investment. The integration offers important opportunities in free trade, for example:
• It has a network of trade arrangements with the most developed economies of the world and a free trade arrangement among the member countries.
• It has competitive advantages in the industries of mining, forestry, fishing, energy, automotive and manufacturing.
• Some Asian economies have already expressed their interest to invest in the countries of the Pacific Alliance as an entry point to Latin America.
• For international business, it is attractive to access to a group of homogenous markets in terms of macroeconomic policy.
Within Latin America, the Pacific Alliance is also a good option compared to other economies, including those of Mercosur. According to a BBVA research, the Alliance will grow more in 2014 and 2015 than the average of Latin American countries and will double the growth of Mercosur, as it can be appreciated in the graphic:
Although Mercosur has a larger population and GDP than the Pacific Alliance, the foreign trade and investment of the last one far exceeds Mercosur, due mainly to the stagnation of its members (Argentina, Brazil, Paraguay, Uruguay and Venezuela) and its protectionist actions.
Furthermore, Pacific Alliance countries are more competitive, as shown on the image.
As for the perception of the Pacific Alliance in other regions, the European Union considers it the most serious integration initiative in Latin America as well as the best platform for trade and investment in the region, making it the best business option for European countries. According to the UE, the reasons for following closely the Pacific Alliance are the trade and investment importance as a bloc and the free trade among the actual and future members; and if Mercosur keeps its protectionist policies and the Alliance maintains its policy of economic liberation, it could become the first trade partner of Europe in Latin America.
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