What is happening with the Pacific Alliance?

August 21, 2023

The results of the Pacific Alliance have been much lower than announced. An example of this is Colombia’s trade deficit with the Alliance.

Pacific Alliance, México, Perú, Chile, Colombia, Más Colombia

In 2011, when the Pacific Alliance was created, the governments of Colombia, Chile, Peru and Mexico announced that this was a deep integration process.

They also said that it would be an example for the world, would open the doors to Asia and would form the basis for true Latin American integration. Today, 12 years later, the results are languishing.

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Ambitious objectives of the Pacific Alliance

One of the objectives of the Pacific Alliance was to harmonize the FTAs that each of the signatory countries has with the United States, in order to create a sort of small FTAA.

For this reason, the United States at the time greeted the bloc with great enthusiasm, even pointing out that it was the most important integration process since the independence of Latin America.

The FTAs with the United States became, then, the floor of the agreement and, as all the member countries of the Pacific Alliance had their own free trade agreements with the northern country, it was assumed that there would be a deepening of liberalization.

On the other hand, the strategy of the member countries of the Alliance was to move closer to Asia. However, after 12 years, the only achievement is a free trade agreement with Singapore, under which Colombia exported USD $100 million in 2022, according to DANE.

In fact, since the signing of the agreement, Colombia’s main non-mining and energy exports to Singapore have been coffee, live fish, medicines, bakery products and flowers. In turn, Colombia imports petroleum oils, medicines, orthopedic articles and malt extracts from Singapore, according to DANE.

Poor results of the Pacific Alliance

Colombia’s balance with the Pacific Alliance is in deficit. This is especially due to the deficit with Mexico, which in 2022 exported US$ 4,175 million and bought only US$ 1,752 million, according to the Mexican Ministry of Foreign Affairs.

The trade relationship with Peru also stands out, where it went from a surplus of US$688.9 million, in 2021, to one of US$138.3 million in 2022, according to DANE.

Almost all the countries with which the Pacific Alliance tried to strengthen relations have long had Free Trade Agreements with the countries that comprise it, as is the case of Canada, or have stalled negotiations, as is the case with New Zealand and Australia.

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During the 16 summits held by the Pacific Alliance, dozens of proposals and plans have been made, and enormous resources have been spent that are not commensurate with the results obtained.

Reserved prognosis

In June 2023, the Mexican government transferred the Pro Tempore Secretariat of the alliance to Chile. This would have corresponded to Peru from the end of 2022, but this did not happen due to the refusal of the Mexican president, Andrés Manuel López Obrador, to transfer it in order not to legitimize Dina Boluarte, whose government he described as the result of a coup d’état.

Under these conditions, Peru’s active presence is in question and the dynamism of the Pacific Alliance has been overshadowed by the recent media presence of the Community of Latin American and Caribbean States (CELAC).

The Colombian government does not seem to be giving more importance to the Pacific Alliance either, and what started as a Free Trade Agreement deserved only a few lines in the last report of the Ministry of Industry, Trade and Tourism of Colombia on the results of the trade agreements of our country.

This report barely records the evolution of previous years, such as the Treaty with Singapore as an Associated State, the updating of Specific Origin Requirements and the accumulation of origin requirements for trade with that country, among other minor decisions.

Initially, the Pacific Alliance seemed to be a geopolitical project to approach Asia by countries leading free trade policies in Latin America.

However, the disputes between the United States and China and the failure of the Trans-Pacific Partnership, which brought together the United States and Pacific Rim countries, and which the Alliance countries wanted to join, frustrated the purpose of using this vehicle to approach the Asian market.

The Pacific Alliance is paralyzed and with a reserved prognosis, it is not known when its next meeting will be held and the few results -good or bad- can be attributed more to the Treaties between its members than to its existence.