“After a decade of chavismo, these four countries are what is left of liberal democracy in Latin America” – and that’s good news:
Each of the members already has a bilateral free-trade agreement with each of the others and each has an FTA with the United States. Peru began opening its markets during the Fujimori government (1990-2000). With almost 20 years of Nafta under its belt and a decade of sparring with Chinese producers, Mexican business has become accustomed to foreign competition and is hungry for new markets. Chile has been opening its markets unilaterally for decades, and Chilean producers are world-class. Colombia, arguably the least open of the pack, is led by pro-market President Juan Manuel Santos.
As a single free-trade region, the Pacific Alliance will be formidable. Its population—almost 210 million—is 36% of Latin America and larger than Brazil. In 2012 the four economies combined accounted for 36% of the region’s gross domestic product, roughly half of the region’s total exports and imports. As a single region, the alliance would be the eighth largest economy in the world and the seventh largest exporter, according to Mexico’s economy ministry.
The alliance will also liberalize competition in services and provide a framework for certainty and regulatory stability for foreign investors.
Read the whole thing.