Chilean President Michelle Bachelet and her Peruvian counterpart Ollanta Humala, two of the four leaders of the Pacific Alliance nations. Photo: Foreign Ministry of Peru
By: Marco N. Yurén
Chile, Colombia, Mexico and Peru, members of the Pacific Alliance (PA), together account for 35 percent of Latin America’s Gross Domestic Product, 47 percent of its total exports, and received 46 percent of its foreign investment. Now they should be looking for mechanisms to increase the combined investments in every sector that strengthen this integration. “This means harmonizing the trade agreements and country of origin rules in each country,” said Joaquim Tres, a leading specialist in trade and integration at the Inter-American Development Bank (IDB).
The IDB says the PA member countries are growing at a rate of 3 percent per year while the rest of the region trails at 1.5 percent. This is because “we continue to have very high costs of trade, and it’s not coming from tariffs but from the costs of transportation and logistics infrastructure,” Tres said.
Passing through customs at some PA borders takes 3.5 days, while in Asia it’s one day less, in Europe two, and “for many just one day is a lot,” says the IDB official.
In Latin America less than 2 percent of GDP is invested in infrastructure, compared with Asia, where it is as high as 10 percent. Tres says the savings could be as high as $11 billion if the borders were harmonized among the PA members.
The PA is one of the world’s newest economic blocs. It was founded to create a door to bring the markets of Latin America and Asia closer together. The alliance promotes trade, economic and policy …
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