Pacific Alliance promotes trade

On the occasion of the 7th anniversary of creating the Pacific Alliance, representatives of Chile – Ricardo Alen; Colombia – Claudia Turbay Quintero; Mexico- Maria de los Angeles Arriola Aguirre; and Peru – Patricia Yolanda Ráez Portocarrero, came together to join in celebration of this important anniversary, which highlights an innovative, efficient and attractive integration agreement as explained below.

The Pacific Alliance (AP) is an economic and commercial integration mechanism between Colombia, Chile, Mexico and Peru established in the year 2011 and formalised through a framework agreement that seeks to foster deep integration through a strategy of open regionalism based on four pillars: free movement of goods, services and people, capital and the cross-axis of cooperation.

It is an inclusive mechanism that does not counter any other regional initiative and has set itself ambitious goals.

Since June 30th 2017, Colombia has held the Pro Tempore Presidency – will be assumed by Peru in July 2018, in the framework of the 13th Summit in Puerto Vallarta, Mexico.

Some significant achievements include the following:

  1. Establishment of the Trade Protocol and trade facilitation and elimination of regulatory restrictions (Dec 2014), which entered into force in 2016.
  2. Modernisation of current bilateral agreements which are in force; relief of 92% of the universal tariff, leaving only 8% for its gradual relief.

These countries are looking to compete through the accumulation of ‘origin of goods’ among the four countries in the global market, engaging in regional networks, and increasing their level of competitiveness.

In order to facilitate trade with a focus on transparency, the four countries have instituted an interoperable Single Window and seek to jointly promote their export markets, investment and tourism promotion agencies.

The finance ministers of the four countries have created and strengthened a variety of important mechanisms for tax approval of the investments of pension funds. The issuance of the Catastrophe Bond and creation of the Infrastructure Fund are some notable examples.

With creation of the Integrated Latin American Market (MILA), which is the financial arm of the Alliance, the stock exchanges in the four countries have been integrated with the objective creating the largest stock market in Latin America.

The private sector in the four countries participate by giving recommendations to governments – through the Business Council of the Pacific Alliance – to develop a useful business facilitation agenda, which has generated significant initiatives such as the Venture Capital Fund for SMEs, in conjunction with the Inter-American Development Bank (IDB) Multilateral Investment Fund (MIF).

Regarding the movement of persons, the student and academic mobility platform for students of undergraduate, postgraduate and doctoral programmes and teachers – which generates 400 scholarships per year – was created and is being implemented successfully.

In relation to free movement, measures have also been taken (since 2012); such as the elimination of tourist visas and business visas for businesses that do not make income for up to 6 months. In addition, foreigners residing in member-countries of the Alliance do not require a visa for short stays.

It allows young people (between 18 and 30 years) of the member-countries to enter temporarily into any of the four countries and undertake paid activities to cover part of their expenses. Young people who apply to the programme will be able to pursue studies or activities for a period of two months. In the framework of this programme, free permits were agreed upon.

Consular cooperation that allows nationals of member-countries to receive consular assistance in those places where there is no diplomatic or consular representation of their country of origin has been proposed and concretised.

The Pacific Alliance countries share diplomatic offices in seven countries: Algeria, Azerbaijan, Ghana, Morocco, Vietnam and Singapore, as well as the Permanent Mission to the OECD in Paris. In addition, they have two joint commercial offices in Istanbul and Casablanca.

Ghana is the only country where the four founding partners of the Alliance are together and share premises of the diplomatic mission.

Currently, 52 countries make up the Observers – 4 of which have applied to become associate members. These are: Canada, Australia, New Zealand and Singapore.

The Pacific Alliance has 4 thematic areas in which its work is prioritised with observer countries: Science, technology and innovation, facilitation of trade, and SMEs and education.