Despite its relative youth, barely five years old, the Pacific Alliance has shown a degree of maturity and commitment to economic and commercial integration that has made it one of the most attractive integration processes in the world. To date, 52 countries have requested to become “observers”, including China, the US and Canada, among many others.
Indeed, the recent XII Summit of the Pacific Alliance, held in Cali in late June, showed how integration in this part of the world is progressing steadily. In addition to the successful working agenda developed so far, eminently in the commercial sphere, work has begun on an agenda to achieve the financial integration of the Pacific Alliance. Such an agenda has been promoted by Chile during this past year, as it held the pro tempore presidency of the Pacific Alliance.
The creation of a public-private group to deal with these matters is an important milestone. This group comprises regulators and experts appointed by both the public and private sector of the countries (the latter represented by the Pacific Alliance Business Council or CEAP, by its initials in Spanish).
This represents a new stage on issues that have traditionally been more complex to negotiate. The idea has been to start with products that are more concrete and “simple” to develop. In particular, the four countries are making progress towards the creation of a Pacific Alliance Funds Passport, supported by the experience and know-how of the Asian countries that already have the Asia Region Funds Passport. Additionally, progress has been made to ensure that foreign investment made by pension funds of countries from the Alliance is treated as local when made in Alliance markets.
For its part, in banking and other areas, the private sector has launched a pilot plan for issuing performance bonds between Chile and Peru, which will facilitate and help reduce costs for exporters of services between both countries, this pilot plan could be used in the rest of the countries.
In addition to the beginning of this new phase of negotiations, the Alliance, as a whole, has made progress by means of establishing relationships with the entire Pacific Basin through the creation of an “Associate State” status, that will allow some countries to acquire this category through the negotiation of a sort of free trade agreement between the Pacific Alliance as a whole and each of them. Today, it can be announced that Australia, Canada, New Zealand and Singapore are at the top of the list.
Coincidence or not, it is worth recalling that in 2005 New Zealand and Singapore, together with Chile and Brunei, formed the so-called P4, or Trans-Pacific Strategic Economic Partnership Agreement (TPSEP), a preliminary instance to what is now the a dying TPP.
The proven commitment of these potential new partners and the maturity shown by the Alliance makes it possible to dispel, to some degree, part of the uncertainty caused by the changes taking place in the international sphere. It could be said that the axis of leadership in integration has begun to shift towards this side of the Pacific Basin, a process that is, on its own, beneficial for the economic development and the competitiveness of our countries.
Note: This opinion piece was originally published on Friday 4th of August, 2017 in the Boletín Informativo N° 9 del Programa de Estudios de la Alianza del Pacífico de la Universidad Icesi, de Colombia