Archive for the ‘Pacific Alliance’ Category

Last night at PU: Krauze and Vargas Llosa, the two giants

Wednesday, October 9th, 2013

Imagine the two foremost figures of Latin American letters having a conversation on the politics of the region, and you being able to listen. Well, that was the scene last night at 50 McCosh on the Princeton University campus.

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Nobel Prize for Literature Mario Vargas Llosa conversed with historian Enrique Krauze Kleinbort in front of a standing-room-only audience. The two gentlemen spoke about Peru, Mexico, Uruguay, Venezuela, and Cuba, among other countries. The Daily Princetonian reports,

“Latin America is improving. We have more democracy; we have large consensus on what kind of economic policies we need to develop and become modern and successfully fight poverty,” Vargas Llosa said, adding that the transformation of most Latin American nations in recent years has been formidable. “Poverty has diminished; in statistical terms, the poverty level is still large, but the way which the middle classes have been grown in the country is fantastic.”

Vargas Llosa cited Uruguay’s economic success as a model for the rest of Latin America. He said that the country has seen very liberal social reforms, including gay marriage and gay rights. “Not liberal in the American sense,” he added to the audience’s laughter.

More importantly, Vargas Llosa enumerated, Uruguay has respected its constitution, has independent strong institutions, observes the rule of law and welcomes foreign investment.

Krauze is not as optimistic on Mexico, pointing out the country’s recent lack of economic growth and the absence of a moderate left.

I had the pleasure of asking what the Pacific Alliance may mean for the hemisphere . Vargas Llosa said it will be the only alliance that will endure; Krauze pointed out “best yet, like the name says, it’s pacific”.

It was a splendid evening, bringing many insights from two of the greatest minds in the contemporary world.


Good news Sunday: The Pacific Alliance

Sunday, June 2nd, 2013

The Pacific Alliance met in Colombia last week, for the seventh time since its creation in June of 2012; This is good news for the world, not just for the region.

For starters,

there are two major “requirements” for a nation to join the Alliance. First, the government of the aspiring member state must adhere to the charter of the Alliance, which stresses respect for democracy.

In addition, the second requirement to joining the Alliance is that a new member must have free trade agreements with the other Alliance members before becoming full members. Hence, Costa Rica will only join the Alliance after President Chinchilla signs a free trade agreement with the Colombian government (San José [Costa Rica] already has FTAs with other Alliance members).

Member countries Chile, Colombia, Peru and Mexico were joined by Canada, Spain, Australia, New Zealand, Uruguay, Japan, Guatemala, Costa Rica and Panama,

These countries and investors from outside of Latin America are attracted by the positive business climate among Alliance members—they occupy four of the top-five spots in the World Bank’s Doing Business in Latin America ranking—and encouraged by the fact that the bloc is serious. It is focused on trade, investment and immigration rather than politics and ideology.

Keep in mind that

The goal of the alliance is to create a free-trade corridor of all countries in the Americas with a Pacific coast. The hope is that dropping barriers on labor, finance and trade will help the Alliance become a hub for commerce with Asia.

The reason Japan, Canada, Spain and Australia attended as observers is that members of the Pacific Alliance are all part of the Trans-Pacific Partnership; they are serious about growth and prosperity. Bloggings by Boz lists what they are getting done:

  • The four current members dropped tariffs on 90% of the goods traded among them (something that was mostly done due to bilateral free trade agreements) and committed to completing the final 10% within the next few years.
  • The countries have dropped visa requirements with each other.
  • The four countries will likely create a joint visa system – Visa Alianza del Pacífico – that will allow tourists to visit all four countries on just one visa.
  • Peru dropped business visa requirements for the other three members.
  • The four current members agreed to open joint embassies in Africa and Asia.
  • The countries will conduct a coordinated trade mission in Africa and tourism promotion globally.
  • The creation of a fund to support small and medium sized businesses.
  • A fiscal transparency agreement to prevent businesses from avoiding taxes.
  • Agreement on educational exchanges, including 400 annual scholarships.
  • Agreement to consolidate a scientific network on adapting to climate change challenges.
  • Mexico signed an agreement with Chile to export meat.
  • Mexico moved forward on integration into the Integrated Latin American stock Market (MILA).
  • Costa Rica signed a free trade agreement with Colombia.
  • Guatemala and Peru will have a free trade agreement within the next few months.
  • Guatemala dropped its tourist visa requirements for Colombia.

Decreasing Trade Barriers and Increasing Economic Growth

This initiative is a significant step forward to synchronize members’ trade commitments and is aimed at enhancing trade with the bloc’s most dynamic partners in East Asia.

The Pacific Alliance numbers speak for themselves. These four economies are the most dynamic in the region, representing more than 40 percent of Latin America’s economy with a market of more than 210 million people—more than one-third of the region’s population. Since 2010, these four economies have grown at a higher rate than their neighbors and have also invested at a greater rate—25 percent of their combined gross domestic product (compared to just 20 percent elsewhere).

The Pacific Alliance is already having an effect on regional politics. Daniel Duquenal posts,

Brazil in recent years had a campaign to gain a permanent seat in the security council of the United Nations. All the efforts have been lost, I dare say with the recent fiascoes. How can a country aspire to such a rank when it is unable to protect democracy in its area of influence, and furthermore generates deep divisions as it may happen soon between Mercosur and the Pacific Alliance? Clearly Itamaraty hopes of world leadership are seriously compromised as its actors are revealed to be mere grocery shop managers, more worried about Venezuela paying its bills to them than the long term perspective. Or mere amoral operatives if you prefer. Let’s say it: Brazil is not ready for the major leagues, Colombia is.

Democracy, free trade, investment and immigration: keys to the well being of the region, and the world.