Two weeks ago the 13th summit of the
Pacific Alliance took place, the initiative of regional integration conformed
by Chile, Colombia, Mexico and Peru created in 2011. The relevance of this
meeting was the participation of the members of MERCOSUR, the other important initiative
of integration of the region, 20 years older and formed by Argentina, Brazil,
Uruguay and Paraguay. Was this the beginning of a process of convergence
between both mechanisms?
The Pacific Alliance and the MERCOSUR have
different conceptions, the former was created with the objective of having a
traditional free trade zone in the inside and a higher tariff for non-members;
the latter is based on the premise of allowing its members to freely negotiate
trade agreements with other countries, but giving priority to the negotiation
as a group with the Asian region. In the end, the difference is the ideological
approach to free trade.
The first decade of the XXIst
century appeared as the time to shine for Latin-America, with most governments
of the region politically left oriented and supported by commodity high prices.
Big plans were made for the region based on a common agenda that rejected the
proposal of the United States of a Pan-American free trade zone, the ALCA (Free
Trade Area of the Americas) in 2005 and concluded with the creation of a
regional financial institution “el Banco del Sur” the bank of the south. That
was the time of Hugo Chavez in Venezuela, Luiz Inácio Lula da Silva in Brazil
and Néstor Kirchner in Argentina, among others, the time passed and Banco del
Sur never started operations.
Nowadays the ideological pendulum has shifted
and most countries in the region have right wing presidents and the MERCOSUR is
stuck, first they admitted Venezuela, then the country was suspended and no
additional steps have been given to conform the common market, each one prefers
to move individually, protecting their exportations. That is the core reason
why MERCOSUR countries have turn their look to the Pacific Alliance, there is
no ties with the commercial block.
In a deeper look the Pacific Alliance there is
more a marketing strategy than an integration process, there is no such a thing
as a common market. Whenever someone talks about it, the data shown is the
internal product of the region as percentage of the world and the potential
consumers of the region, but it is often forgotten to mention the low exchange
of goods between members and the scarce results of the strategy to remove 92%
of tariffs on goods traded since 2016. In other words, the Pacific Alliance has
been successful in one thing, the idea of Latin America as a single
Market. As the Comunidad Andina became irrelevant compared to the MERCOSUR,
the MERCOSUR now has become less attractive for investment compared to the
Pacific Alliance. In the beginning, the Pacific Alliance was planned to accept
other countries as full members under the same conditions, free trade
agreements with the rest of the members; Costa Rica and Panama got in the
middle of that process but finally desisted, now it appears to be limited de
facto, with a new category of members (Associate states) for those countries
with free trade with the Alliance members, at the moment Canada, Singapore, New
Zealand and Australia.
Is that process the right pad for the region?
It depends on the expectations, so far, the results are more cosmetic than
structural: common embassies in Asia, common stands in commercial fairs,
academic cooperation and many, many plans but not as ambitious as to compromise
their monetary policy by a common reserve fund as the Latin American Reserve
Fund or a unit of accounts that ease commerce. So far, it looks that the future
of Latin America Integration is more close to the ALCA proposed by United
States than to the Patria Grande (Great Fatherland) of Simon Bolivar.
