The Pacific Alliance is a regional economic integration initiative in Latin America, which was created on April 28, 2011 by the presidents of Chile, Colombia, Mexico and Peru.
The Alliance pursuits three main objectives:
1. Build a deep economic integration among its members, moving gradually Howard a free circulation of goods, but also services, capital and people.
2. Promote the growth, development and competitiveness of all members’ economies in order to achieve a greater welfare and social equality.
3. Become a platform for political articulation and trade integration, projecting its strengths to the Asia Pacific region and to the whole World.
Although there are more economic integrations in Latin America that promote trade growth, the Pacific Alliance is characterized by being sui generis in the process it follows in order to achieve its objectives. Normally, the integration process comprises 6 stages:
MERCOSUR has already a customs union and has already some characteristics of a common market, although it has not achieved it yet. And the only integration in the world with an economic and monetary union is the European Union.
The Pacific Alliance is nowadays in the free trade level, due to the fact that all its four members have signed a free trade agreement. What makes it sui generis, aside from a great stress in an integral cooperation, is the fact that it pursuits to have in the future a common market without having before a customs union.
The reason behind this is members consider that unifying their customs would reduce its liberty to celebrate agreements with third countries and enjoy the benefits from preferential trade with others, what has already been proven in the case of MERCOSUR. When a country is part of a customs union it must apply the same rules and tariffs as their partners, without giving any special treatment to foreign trade. In the case of the Pacific Alliance once the common market is a reality, there will be a free circulation of goods, services, capital and people among the members but they will still be able to individually promote trade with other parts of the world, e.g. Mexico in NAFTA.
This special integration process and other aspects that will be explained later, have attracted the attention of countries that want to be part of it and others that are following carefully all the actions of the Alliance:
•Costa Rica is in already in accession process
•Panama was part of the initiative to create the Pacific Alliance but it remained as an observer country because it didn’t fulfill the requirement of having a free trade agreement with the other four countries. Panama started working on free trade agreements with Colombia and Mexico, which were signed in September 2013 and April 2014 respectively. As soon as the agreement with Mexico is ratified, Panama will be able to start the accession process.
•There are 29 economies in all continents registered as observer countries:
o America: Canada, USA, Guatemala, Honduras, Dominican Republic, El Salvador, Panama, Ecuador, Paraguay and Uruguay.
o Asia: Israel, India, China, Singapore, Korea and Japan.
o Europe: Portugal, Spain, France, United Kingdom, Netherlands, Italy, Switzerland, Germany, Finland and Turkey.
o Africa: Morocco
o Oceania: Australia and New Zealand.
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