One of the most recent integration blocs in Latin America which has gained a high importance and significance within the last years is the «Pacific Alliance» or «Alianza del Pacífico». PuntoLatino and UniBeLat organized this special event, with the support of persons with adequate knowledge of the subject. Their initial presentations provide the basis for a debate. The public could also ask questions.
THE PACIFIC ALLIANCE AND ITS OBJECTIVES
The Pacific Alliance is a regional integration initiative whose member states are Chile, Colombia, Mexico and Peru. The Pacific Alliance was created on April 28, 2011.
Its objectives are:
Build, in a participatory and consensual manner, an area of deep economic integration and to move gradually toward the free circulation of goods, services, capital and persons.
Promote the larger growth, development and competitiveness of the Parties’ economies, aiming at achieving greater welfare, overcoming socio-economic inequality and achieving greater social inclusion of their inhabitants.
Become a platform for political articulation, and economic and trade integration, and project these strengths to the rest of the world, with a special emphasis on the Asia-Pacific region.
Panel 1 – Integration potencial of the Pacific Alliance for each country with its partners and with Asia
Panel 1: Luis Chuquihuara, Embajador del Perú; Jorge Castro-Valle, Embajador de México; Ministro Philippe Nell, Head of Americas Unit at the State Secretariat fpr Economic Affairs (SECO); Beatriz Londoño Soto, Embajadora de Colombia y José Luis Balmaceda, Embajador de Chile. – University of Bern, 07.10.2015.
Introduction to the publication
Philippe G. Nell, Minister, Head of Americas Unit at the State Secretariat for Economic Affairs (SECO)
On October 7, 2014, Punto Latino organized at the University of Bern a panel discussion on the Pacific Alliance, a new integration scheme established in Latin America comprising Chile, Colombia, Mexico and Peru. Under a first part, the Ambassadors of the four Pacific Alliance countries accredited in Switzerland made a short presentation followed by a debate moderated by Philippe G. Nell, Minister, Head of Americas Unit at the State Secretariat for Economic Affairs.
Under a second part, the Swiss perception of the Pacific Alliance was dealt with by Laurent Bernet, Division Americas, Department of Foreign Affairs, Ulrich Hinterberger, Consultant, Switzerland Global Enterprise, Juan F. Palacio, University of St. Gallen, Rodrigo Polanco, University of Bern, Cristian Rodriguez Chiffelle, World Economic Forum under the moderation of Professor Peter Qvist Thorensen, Zurich University of Applied Sciences.
This publication presents first as an introduction some thoughts of Philippe G. Nell on the Pacific Alliance in a global world, then remarks from the Ambassador of Mexico, Jorge Castro-Valle Kuehne, covering an overview of the origin of the Pacific Alliance, its main characteristics, objectives and achievements as well as priorities of the Mexican presidency. The Ambassador of Peru, Luis Chuquihuara, highlights the importance of integration for Peru, some key features of the Pacific Alliance and the role of observer of Switzerland. The Ambassador of Chile, José Luis Balmaceda, focuses on the situation in Chile and sentiment towards the Pacific Alliance, the educational aspects of its agenda and the interest of collaborating with Mercosur. Finally, the Ambassador of Colombia, Beatriz Londoño, brings forward the Colombian perspective and assesses the main challenges facing the Pacific Alliance.
The Pacific Alliance in a global world
Philippe G. Nell¹, Minister, Head of Americas Unit at the State Secretariat for Economic Affairs (SECO)
On April 28, 2011, the Presidents of Chile, Colombia, Mexico and Peru signed the Declaration of Lima during a Summit called by the former President of Peru, Alan Garcia. They established the Pacific Alliance with the objective to move gradually toward the free movement of goods, services, persons and capital. They also aimed at promoting growth, development and competitiveness overcoming thereby social inequality and set a special emphasis on the Asia-Pacific region. The signing ceremony of the Constitutional Act of the Pacific Alliance took place on December 4, 2011 in Mérida, Mexico.
Integration will foster efficiency, productivity and growth. Since the beginning of the XXIst century, the members of the Pacific Alliance have pursued a liberal economic policy establishing free trade relations with a large number of partners. Stimulated by historically very high commodity prices, growth has been strong with substantial resources for investment. Chile even created a sovereign fund with copper revenues. Extreme poverty and poverty were substantially reduced with income growth and redistribution programs such as Oportunidades in Mexico, Familias en Acción in Colombia, Juntos in Peru and Chile Solidario in Chile. These schemes contributed to social stability.
For the coming years, the world situation looks more difficult. A key engine of growth during the past 15 years, China must undergo internal rebalancing with a much stronger accent on domestic consumption and services, with further currency appreciation and declining external surpluses². The policies of China to maintain a high level of growth, of the European Union to fight unemployment, resorb debt and restore growth, and of the United States to normalize monetary policy will have an impact on the Pacific Alliance.
With commodity prices coming down from their peaks, it is of utmost importance for Pacific Alliance countries to focus on their own integration, to further strengthen ties with the rest of the world and to achieve well-balanced inclusive growth. The task will not be easy with, except Mexico, a strong dependence on commodities for exports and for all four countries, dwindling fiscal revenues therefrom. Middle-income countries, Pacific Alliance members face the significant challenge to improve upward mobility and respond to the aspirations of a growing middle class with increasing social demands.
Europe’s experience throughout the XIXth and the XXth Centuries shows that raising living standards requires a peaceful environment, significant time, open economies, good education systems, research capabilities, broad access to the financial system and innovation capacity. During their first years, the European Economic Community and the European Free Trade Association were not confronted with many of the problems of the Pacific Alliance linked to dual societies. The bigger market and rising incomes provided broad opportunities. People moved from agriculture to industry and services, and productivity increased significantly with technological progress. Intra-industry trade expanded based on specialization and product differentiation; research and development, inventions, innovation, credit availability, trademarks and intellectual property protection became the driving forces behind entrepreneurship.
The Pacific Alliance differs from the European integration model with a very large young population, a big informal sector, a low level of public education, a strong dependence on commodities and a weak capacity to innovate. The willingness to increase competitiveness, adopt market-oriented reforms and narrow the income gap with developed countries is reflected by the OECD membership of Chili and Mexico, the ongoing accession negotiations of Colombia and the status of country program for Peru. At a global level, having established free trade relations with the United States and the European Union, the Pacific Alliance members are very well positioned to eventually join at a later stage the large market being presently created by the two world leading economies under the Transatlantic Trade and Investment Partnership (TTIP).
The Pacific Alliance is a very valuable complement to a global strategy. It is likely to stay that way as long as intra-Pacific Alliance trade and investment remains much lower than with either the United States, China or the European Union. Notwithstanding this fact, the creation of a single market is a very legitimate objective. Based on historical, cultural, geographical and societal ties, the members of the Pacific Alliance have much to share. They have also identical challenges to address such as drugs, security, corruption, informality, climate change, dependence on commodities, education and health. Instead of looking for tailor-made solutions, in particular for cross-border issues, acting at the Alliance level and implementing policies in a coordinated way could have a far greater impact. This was recognized by Costa Rica and Panama, expected to join the Pacific Alliance in the near future. Guatemala has also applied for membership.
The question arises as to the contribution of Switzerland to the Pacific Alliance. It may be twofold. First, Swiss integration experience with the internal market of the European Union may serve as a useful reference. Areas covered encompass customs, movement of persons, mutual recognition of diplomas, coordination of social security contributions, technical barriers to trade, government procurement, air and road transport, research and development, and students’ mobility programs. In order to realize an internal market, the Pacific Alliance will require a program with well-defined steps. Lean permanent administrative structures and consultations with parliamentarians, social partners and business in each member country will be necessary³.
Second, as an observer to the Pacific Alliance, Switzerland could assist its members in the areas of innovation, clean technologies and technical education. Switzerland is already today very active in Colombia and Peru with economic cooperation programs. They cover inter alia promotion of a competitive private sector with access to finance and global markets, sustainable and integrated urban infrastructure, sustainable management of natural resources, prevention of environmental degradation and mitigation of climate change, promotion of effective and transparent public governance and increased accountability to the citizens.
To conclude, the Pacific Alliance is a promising integration group. The first steps were successfully undertaken. For the future, it will be necessary to find an appropriate balance between deepening integration, enlargement and cooperation with other integration groups in Latin America and around the world. Moving the integration process forward will soon require the adoption of common policies and rules. Political commitments from governments and parliaments, support by the business community and society as well as progressive transfer of sovereignty to the Alliance will become necessary. The most difficult lies ahead. With a strong integration, the Pacific Alliance will increase its influence in Latin American and world affairs where its stake will remain considerable for the years to come as a major provider of key commodities.
¹ The views expressed are exclusively the author’s.
² C. Fred Bergsten, Gary Clyde Hufbauer, Sean Miner, Bridging the Pacific: Toward Free Trade and Investment between China and the United States, Peterson Institute for International Economics, Washington, DC October 2014.
³ For an analysis of the institutional issues confronting the Pacific Alliance, see: Juan Fernando Palacio, El Sentido de la Alianza del Pacífico. Claves de su Trascendencia y sus Desafíos, University St.Gallen, 2014.
Jorge Castro-Valle Kuehne, Ambassador of Mexico to Switzerland
Buenas tardes a todos. Good afternoon, ladies and gentlemen, it is a pleasure to take part in this Podium at the University of Bern.
Dear Minister Philippe Nell, thank you very much for your kind introduction and for moderating our panel. My gratitude also to the organizers and panelists, and particularly to the audience, for their interest in the Pacific Alliance (PA), this innovative new integration process in Latin America.
As agreed with my fellow panelists, I would like to focus on what I believe to be the distinctive characteristics and strengths which have made the PA into such a success story. But first, allow me to provide you with a brief general overview on the historical background and objectives of the PA, and conclude with a glance at the priorities of Mexico during its presidency.
Origin of Latin American Integration
Latin America has embraced the notion of integration since its independence from Spain in the early 19th century. But in spite of the best of intentions and eloquent political discourse, the aspirations of Simón Bolivar have never fully materialized. Attempts, ranging from the Congreso Anfictiónico of Panama in 1826 to ALALC, ALADI and other integration initiatives in the 20th century, have not been able to fully meet their expectations.
So, is the PA one more of Latin America´s experiments with integration? Even though its immediate predecessor – the so-called Arco del Pacífico – was not successful, I believe that the PA has learned relevant lessons from past initiatives and is proving its value and effectiveness with deeds and not only with words.
Allow me to remind you briefly what the PA is about and what its main characteristics and strengths are.
Objetives
The PA´s goal is to create a new integration platform based on the free flow of goods, services, capital and people; promote greater competitiveness and growth in the economies of its members; and widen the region´s economic relations with Asia-Pacific.
The PA in Latin America and the World Economy
The four countries have a population of 214 million inhabitants and a combined GDP of over 2.1 trillion dollars equivalent to 37% of Latin America´s total GDP. Together they represent the eighth largest economy in the world.
Their economies have averaged 5% annual growth over the past four years. Their foreign trade amounts to more than 1.1 trillion dollars equivalent to one half of Latin America´s commercial exchanges with the world and they receive 45% of total foreign investment flows in Latin America.
So, what makes the PA different from other attempts at integration, what has allowed it to make so much progress in so short a time and why has it attracted the world´s attention?
I believe that the answer to these questions is found in its CHARACTERISTICS AND STRENGTHS:
The four founding countries share important values.
They are committed to democracy, the rule of law and respect for human rights.
They possess a solid institutional structure, with periodic democratic elections, dynamic globalized markets and favorable conditions for foreign investment.
Theirs are open economies with a vast network of free trade agreements among themselves as well as with a wide range of countries from all regions of the world.
By the way, an important pre-requisite for membership in the PA is to have concluded free trade agreements with all of its members and, in the case of the observers, to have free trade agreements in place with at least half of the members.
They have proven to have the political will to promote open economies, free trade and deep integration, independently of changes in government like the ones that have taken place in Peru, Mexico and Chile since the creation of the PA. Nevertheless, this remains a challenge for the future.
Unlike other integration processes which have started from a large basis and have failed to attain the necessary cohesion, the PA was initiated by a small group of like-minded countries. This has facilitated decision-making by consensus. At the same time, it has remained open to new members provided they fulfill the conditions and requirements for membership (Costa Rica and Panama). Another innovation is its outreach to observers from other regions of the world. A further relevant distinction is that its members, contrary to other initiatives, do not belong to the same subregion, thus guaranteeing a certain degree of diversity while at the same time maintaining their unity of purpose.
The PA has a simple and flexible structure characterized by a lack of heavy bureaucratic burdens in spite of the sophistication and high degree of specialization of its negotiations. It has made practical use of all kinds of opportunities and fora to hold high-level meetings (even virtual teleconference summits) and it has developed a result-oriented approach which has enabled it to obtain remarkable achievements in a relatively short period of time. All this has contributed to enhance its world-wide prestige as a dynamic, effective, pragmatic and innovative mechanism.
Just consider the following list of CONCRETE RESULTS:
– The conclusion of the Framework Agreement, equivalent to the Constitution of the PA, and the Additional Protocol with 19 chapters.
– The elimination of tariffs: 92% immediately and 8% in the following years.
– The abolition of visas for tourists and business people, with a remarkable increase in travel flows among the four countries.
– The establishment of a platform for student and academic mobility, one of the most significant and potentially beneficial achievements for further deep integration.
– The unification of stock exchanges with Mexico´s incorporation to the Mercado Integrado Latinoamericano (MILA) which has thus become the second largest stock exchange in Latin America with over 750 listed companies with a market value of 1.1 billion dollars.
– The homologation of health and regulatory certifications.
– The agreement to share embassies and trade offices in several parts of the world, as well as consular protection services.
– And the development of a framework for dialogue and cooperation with observer countries from different regions and international organizations.
Priorities of the Mexican Presidency pro tempore
Upon taking over from Colombia the presidency of the PA at the Punta Mita summit meeting last June, Mexico set forth the following priorities for its term of coordination:
1) To fulfill the pending mandates from previous summit and ministerial meetings.
2) To implement the on-going accession processes of Costa Rica and Panama.
3) To foster relations with observer countries (32) and international organizations (IDB, OECD).
4) To strengthen links with the Asia-Pacific region (ASEAN).
5) To develop new topics such as SMEs, innovation, transparency, fiscal evasion, intellectual property, health issues, sports diplomacy, mining, among others.
Thank you for your kind attention.
Muchas gracias!
Luis Chuquihuara Chil, Embajador del Perú en Suiza
Para el Perú, la vocación por la integración es un elemento sustancial de su política exterior desde siempre. En su época, visionarios como el Canciller Carlos García Bedoya analizaron en profundidad el mecanismo vigente más próximo en ese momento, como era el Pacto Andino, hoy Comunidad Andina. Los años 90′ dejaron en el mundo entero marcas indelebles, paradigmas emergentes se transformaron en variables sustantivas y determinantes para la economía y el comercio internacional, para el desarrollo social y humano, para las relaciones internacionales, para la innovación científica y tecnológica, en línea con una renovada perspectiva integracionista.
Cuando el año 2000 el Perú recuperó la democracia, la nación en su conjunto se planteó la necesidad de reformular las líneas maestras de nuestra política interna y externa. Así, nuestro país se encaminó hacia una proyección nacional e internacional más moderna, con auténtica vocación por la gobernabilidad democrática, la apertura económica y la cohesión social. Quedó claro que la realidad del siglo XXI no podía ser ajena a la elaboración de una estrategia de desarrollo nacional eficiente, tanto a nivel interno como externo. Actores políticos, agentes económicos y líderes sociales coincidían.
Dicho consenso nacional de plasma en el Acuerdo Nacional, suscrito el año 2002, que congregó a los partidos políticos, gremios empresariales, instituciones religiosas, centros académicos y representantes de la sociedad civil, sin distinción de ninguna clase. Así, elementos centrales para el desarrollo del Perú serían (1) la democracia y el estado de derecho; (2) la equidad y la justicia social; (3) un país competitivo; (4) un Estado eficiente, transparente y descentralizado; (5) participación activa en el sistema económico global para favorecer el comercio, la inversión y la cooperación.
Las políticas públicas definidas en el Acuerdo Nacional han sido impulsadas sucesivamente, cada quien con sus matices, por los presidentes peruanos del siglo XXI: Alejandro Toledo, Alan García y Ollanta Humala y sus respectivos gobiernos. Particularmente la referida al punto 5 ut supra.
Por ello, en octubre del 2010, el Presidente Alan García tomó la iniciativa de invitar a los países hermanos de México, Colombia y Chile para crear juntos un «área de integración profunda», en la que se asegure la plena libertad de movimiento para bienes, servicios, capitales y personas. Este nuevo modelo de integración, además, debería constituir una plataforma con proyección al mundo, especialmente el Asia, bajo el concepto de regionalismo abierto.
Una de las innovaciones en esta iniciativa integracionista es que se superó la tradicional concepción geográfica de «países con territorios adyacentes». Por encima de ello, se fortaleció el concepto de procesos de integración con «países convergentes». La afinidad de políticas económicas por encima del tradicional concepto geopolítico. Así, la Alianza del Pacífico ha unido a México, Colombia, Chile y Perú, todos ellos países con concepciones muy claras y modernas en lo referido a economías sólidas, con estabilidad macroeconómica, con proyección internacional hacia el libre comercio, para cumplir el rol central sustantivo de la economía: satisfacer eficientemente las necesidades de la población. Por ello, la Alianza del Pacífico se plantea amplios objetivos de movimiento de capitales, integración e intercambio de tecnología, movimiento de recursos humanos, fomento de la innovación y competitividad, mejores oportunidades laborales, i.a. Esos son ejes centrales en la acción de la Alianza del Pacífico.
Ahora bien, por qué el Perú apuesta por la Alianza del Pacífico? Porque tenemos visiones similares respecto a la economía y el fortalecimiento de la democracia; porque creemos en el libre comercio, porque estamos convencidos que la integración entre similares y a la vez complementarios, nos favorece en el intercambio de bienes que, a su vez genera puestos de trabajo y desarrollo productivo. Porque estamos convencidos que podemos avanzar unidos y que debemos fortalecer un proceso de integración profunda y abierto al mundo.
Por cierto, evitemos todo reduccionismo, la política de integración del Perú apuesta a participar en diversos escenarios de integración y cooperación regional en nuestro ámbito latinoamericano bajo la premisa de sumar y no restar. Por ello, somos fundadores de la Comunidad Andina, observadores en el Mercosur, miembros de UNASUR y participantes en CELAC. La Alianza del Pacífico no ha sido concebida para colisionar con otros procesos si no para, respetándolos, contribuir al horizonte último de la integración regional.
Los Embajadores de los países de la Alianza del Pacífico ante la Confederación Suiza tenemos el honor de intercambiar hoy ideas en la sede de la prestigiosa Universidad de Berna. Además que nuestro moderador, el Ministro Philippe Nell, Director de las Américas de la Secretaría de Estado para la Economía (SECO) sea un alto funcionario público que conoce en detalle la realidad económica y social de América Latina y que representa con gran solvencia profesional a su país.
En este escenario, nos planteamos también cuál es la importancia de tener a Suiza como país observador de la Alianza del Pacífico? Se trata de una de las democracias más sólidas del mundo, valor compartido con los países de la Alianza del Pacífico. Además, hay elementos convergentes como son la libertad económica, la vocación integracionista, la convicción en la importancia del mercado, la innovación y la competitividad, la promoción del desarrollo humano, el desarrollo tecnológico, la protección del medio ambiente, i.a. Por ello, estamos seguros que Suiza, país observador desde noviembre del 2013, tendrá un papel sustantivo en el trabajo conjunto con nuestros países.
Estoy convencido que el intercambio de ideas de esta jornada, tan acertadamente convocada por Punto Latino y su equipo de trabajo, servirá para analizar con espíritu abierto los avances y desafíos de la Alianza del Pacífico. La Universidad, el mundo académico, es el foro ideal para este intercambio. Agradezco el haber podido compartir con ustedes y estaremos atentos a vuestras opiniones.
Muchas gracias.
José Luis Balmaceda, Ambassador of Chile to Switzerland
After centuries of considering the Pacific Ocean as a border between Latin America and its other shore, today arise as a solid bridge to global trade, allowing Chilean copper, Peruvian food, Colombian iron and Mexican tequila fed into a global supply chain centered on the needs of Asia. Direct investment flows in the opposite direction, boosting the commodity trade.
The consolidation of the Pacific Alliance, emerge from a clear vision of the future challenges and a community of interest in trade and development, should be understood as:
1.- an incentive to the economic development and employment;
2.- a facilitator of the process of integration with Asia-Pacific, where the four countries have earn respect and credibility, also supported by the fact that three of them are member of APEC. And,
3.- as a magnet for Asian, USA and European investments. In fact, the bloc provides a feasible export option for small and medium-sized companies seeking an entry to global markets.
The homogeneity of our economies, as a result of the close public/private linkages, has speed up the advances in the fields of trade, finance, labour and coordination of public policies.
Chile FTA’s with 62 countries that cover near 80 % of our trade, contributing to facilitate the development and penetration of exports markets, has lowered our average tariff on import to a figure close to 1%. In this regard, the Alliance has served Chile to complement and reinforce our economic and trade position at the global level. In July, during her first appearance at the Pacific Alliance forum, President Bachelet said: «Our presence in the Pacific has transformed us [into] the bridge which lets Latin America demonstrate its diversity and richness to the booming Asian market.»
The Latin-American dimension of the ties with Asia-Pacific has been a constant of the Chilean foreign policy.
Nevertheless, as our President underlined in her campaign, «growth with equality» is increasingly becoming a common goal across the continent. Development is not defined only with high per capita figures: it is sustainable growth, inclusion, social cohesion, governance, diversity, transparency and accountability, with care to the environment and respect for human rights. It is synonymous of markets that thrive and operate thanks to productive innovation and not speculation», she added.
Notwithstanding a GDP per capita of US$ 19.100, a trade exchange of US$ 155,86 billion, 26 FTA, Chile still maintains high levels of inequality. To reduce the gap between richest and poorest and become a more inclusive country, the present Government presented a tax reform, already approved by the parliament, which will serve to improve the quality of education, public health and start a new program of public works aimed to reactivate economic activity and increase employment.
Chile doesn’t wish to keep on observing how development passes in front of the houses of the poorest. We want this to enter their homes and provide the welfare they requires. So the President addressed its agenda, ensuring that educational reform is one of the fundamental pillars to fight inequality and the only way to keep the talents.
We are pleased that this so called «deep integration» of the Alliance contemplates an agreement on academic and student exchange, allowing to effectively involve the civil society. The main target of this scholarship program is to contribute to the formation of advance human capital of the member countries, via the academic exchange of undergraduate students to doctorate, as the implementation of academic internships. The areas identify by the Parties are: business, finance, international trade, public administration, political science, tourism, economy, international relations, environment and climate change, engineering, science and technology, exact science.
Dear friends, we have achieved integration outward from the Alliance but we haven’t reached the same result at the regional level. Chile has chosen to develop a foreign policy from the Latin American and Caribbean region, our natural space, aware that differences do not prevent convergence. Our goal is to build bridges of understanding, above the differences, in such a way that the region can be presented to the world united. While we will continue to participate actively in the Alliance, understood as a project of economic integration and a regional platform, nor exclusive not antagonistic with other projects, Chile has undertaken to promote a dialog between the PA and MERCOSUR, to search for points of agreement.
We already gave a first step, the participation of the Foreign Ministers of Argentina and Brazil in the ABAC meeting held in Santiago last May. The next step, adopted by the Alliance, is to sustain an exploratory dialog PA-MERCOSUR at the level of F.M., scheduled for November 24 in Chile.
The convergence should be gradual, complementary and pragmatic. We are convinced that we could make progress in areas of mutual benefit as mobility of people, oceanic corridors, cooperation on sanitary and phytosanitary matters, trade facilities, tourism and scientific and technological cooperation.
Beyond this compromise, the PA seen as Latin Americas springboard to Asia, has the potential to open a new stage in the involvement of the member countries in the Asia-Pacific region.
As this bloc shows good and sustained rates of growth, macroeconomic stability, solid external accounts, as well as a consolidated institutionality, became attractive partners for major Asian economies. Their empowerment, carried out in a competent and dedicated way, may result in benefits not only for its members but also to the Andean countries and throughout Latin America.
What has been achieved through the Alliance is a valuable asset for Chile and the region, which is necessary to protect and develop within the frame of the global economy. This capital provides a great opportunity to generate positives links with other blocks of integration from an advantageous position.
In summary, this new sub/regional effort constitutes a renewed declaration of open regionalism by which Chile has been advocating during last decades. The Alliance is called to be a central instrument of external repositioning and regional development as well as to provide a modern and strategic vision regarding the role of public authorities and civil society. This will required concerted and sustained actions based on a common future vision.
The Pacific Alliance and its challenges ahead
Beatriz Londoño Soto, Ambassador of Colombia to Switzerland
The Pacific Alliance has a promising future and it is seeded in fertile ground. However, the opportunities are as many as the challenges ahead. The objective of our four countries is to achieve a deep integration, which can only be obtained as a result of a long-term process. This is an integration process that needs to be understood in a much broader sense than only the sum of its parts.
A sheer political will is the driver of the integration process. Our political actions need to be consistent, coherent and resilient. The commitment towards the Alliance has to be able to survive external shocks and political changes in any of the member countries. Our pledge has to be strong enough to overcome downward economic cycles and paradigm shifts.
A common challenge for all members is the need for coherent and transversal regulations to ensure transparency, remove distortions and increase cooperation. The governments of the Alliance must play their role of being promoters, facilitators, coordinators and regulators of the Alliance. It is the tasks of our governments to create the most appropriate framework for the development of the Alliance, so that the private sector can obtain the most value of it.
And this crucial aspect is probably the single most important challenge of the Alliance for it to be successful. If our private sector does not find clear advantages to integrate, invest or trade in the member countries, and if this integration does not lead to the development of products and services in an upward innovation cycle we would have not succeed.
Another common challenge is the diversification of our economies, the increase of productivity and the creation of better quality jobs that help our industries better integrate in global value chains. This evolution will help our countries avoid the Middle Income Trap, or the dependency on natural resources and cheap labor and capital to achieve economic growth.
Increasing the intra-Alliance trade of goods and services is one of our main objectives. Having rapidly achieved a level of 92% of tariff reduction is already a good achievement. However, we still need to achieve zero-tariff levels and work on non-tariff barriers to trade. Our working groups on trade facilitation need to tackle the facilitation of trade by easing customs procedures, by implementing the accumulation of rules of origin, and by putting in place effective and simple quality assurance systems to verify sanitary and phytosanitary conditions.
Our investment flows and private financing sources have benefitted from the integration of the four stock markets. However, this integration remains shallow and companies have yet to unleash its full potential. For this to happen, and for international investors to take notice, we need to keep working on maintaining healthy fiscal, monetary and exchange rate policies. Foreign direct investment needs to be channeled to develop and grow new or existing industries, and not to substitute our current capabilities. FDI flows should be tightly linked to technology transfer and to the linking of our small and medium-sized enterprises to join global value chains.
There is much that the Alliance can learn from other integration processes in order to accelerate our own, avoid stagnation and overcome difficulties. We will have to come up with the best way to create effective ties to APEC, TPP, Mercosur and the European Union, among others. Acting as a block will be the best way to solve challenges such as the deceleration of China, the strong competition of South East Asia or ongoing political instability around the world.
Even if Chile, Colombia, Mexico and Peru have different priorities for economic development, some challenges remain transversal: quality of education including emphasis on vocational training, infrastructure, energy efficiency, productivity, innovation, institutional strengthening, transparency, and security are some of them.
Ahead, we see an Alliance whose achievements are also expressed in the improvement of social and environmental policies. Indeed there are many challenges ahead. This is an ongoing process but we are definitely optimistic in the future!
Thank you very much for your attention.
Pódium sobre la Alianza del Pacífico, Universidad de Berna, 7 de octubre 2014
Comisión de Organización de PuntoLatino:
Luis Felipe Montes Castillo (UNI BE)
José Parra Moyano (UNI ZH)
Alexandre Ramos Peon (UNI BE)
Luis Vélez Serrano (Coordinador PuntoLatino)
Diego Bachmann Rubio (UNIBE)
Nelson Casas, reportero gráfico de PuntoLatino
Participantes de PuntoLatino:
Alejandro Follonier-Ayala (UNI NE)
Isolde Erny (ETHZ)
René Díaz Agudo (UNI BE)
Michèle Bigler (UNI FR)
Bárbara Guerra