U.S. Economic Hegemony: Consolidation and Deepening of the Pacific Alliance Trade Bloc

In a short period of time, the Pacific Alliance has emerged as one of the leading economic integration projects in Latin America. It aims to succeed where others have failed by creating a gateway to Asian markets and building a Pacific-rim trade deal. The U.S. and Canada are both pursuing deeper ties with the group and have been granted observer status. This is part of efforts to revive and expand their presence in Latin America. In some areas of integration, the Pacific Alliance has surpassed NAFTA. By merging the two together, it could be used to fill the void left by the collapse of the Free Trade Area of the Americas (FTAA).

The Pacific Alliance was officially launched by Chile, Colombia, Mexico and Peru in June 2012. Its objectives include to construct, “an area of profound market-driven economic integration that will contribute to the free movement of goods, services, capital and persons.” The group also seeks to, “become a platform for economic and commercial integration as well as political coordination with global outreach, particularly towards the Asia Pacific.” A key requirement in joining the Pacific Alliance is to have free trade agreements with all existing member states. Costa Rica recently received approval to become a permanent member. Other countries have also shown interest with a growing number requesting observers status. The goal of the Pacific Alliance is to go beyond traditional free trade deals and pursue even more liberalized economic policies.

The May 23, 2013 Pacific Alliance Summit in Cali, Colombia marked the next steps in the consolidation and deepening of the Latin American trade bloc. The presidents of the four founding member countries agreed to remove tariffs on 90 percent of the goods traded between them and to gradually eliminate duties on the remaining 10 percent. They also adopted measures to begin visa-free travel between member states and moved closer towards full labor mobility. In addition, the leaders announced the creation of a cooperation fund and ratified agreements to open up joint embassies and trade offices in Asia and Africa. They also pledged to continue to deepen regional financial integration. The stock markets of Chile, Peru and Colombia have already been merged together and Mexico is expected to join them within the next year. While other Latin American countries are seeking to curb U.S. influence, Pacific Alliance members seem to have a willingness to maintain and increase ties with Washington.

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