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Four Latin American countries agree $85 bn free-trade deal

Published time: February 11, 2014 13:44
Family photo of presidents (L to R):  Peru's Ollanta Humala, Chile's Sebastian Pinera, Colombia's Juan Manuel Santos, Mexico's Enrique Pena Nieto and Costa Rica's Laura Chinchilla at the convention center in Cartagena, Colombia on February 10, 2014. (AFP Photo / Luis Acosta)

Family photo of presidents (L to R): Peru's Ollanta Humala, Chile's Sebastian Pinera, Colombia's Juan Manuel Santos, Mexico's Enrique Pena Nieto and Costa Rica's Laura Chinchilla at the convention center in Cartagena, Colombia on February 10, 2014. (AFP Photo / Luis Acosta)

Chile, Colombia, Peru and Mexico have signed a treaty to eliminate tariffs on 92 percent of goods and services. The Pacific Alliance is free trade area of some 210 million people, accounting for more than a third of all Latin American and Caribbean GDP.

The move is a big step towards strengthening the countries' position alongside the strong neighboring trade pact – Mercosur - which includes Argentina, Brazil, Paraguay, Uruguay and Venezuela.

"This translates into more investment, more competitiveness and as a consequence, more employment, and good quality employment. This is the fundamental purpose of this whole exercise," the Wall Street Journal quotes Colombia's President Juan Manuel Santos.

Morgan Stanley estimates an average 4.25 percent growth for the new alliance this year, or about $85 billion. At the same time many economists forecast a shrinking Venezuelan economy, weak 2 percent growth for Brazil, along with Argentina falling into recession.

Besides establishing strong economic connections, the deal will also create a fund to finance infrastructure investment and a medicines price monitoring and leverage system.

The Pacific Alliance, founded in June 2012, has set a vital goal to increase trade with fast-growing Asian nations. Accounting for 50 percent of the population of Latin America the union is ready for further expansion. Costa Rica applied for membership at the VIII Summit of the Pacific Alliance. Panama and Guatemala have also expressed interest in becoming members.

Comments (6)

 

eyeofinsight 12.02.2014 12:03

ToniL 11.02.2014 21:03

<BR nodeIndex="1&qu ot;>Certainly that's why Mexico is turning its back on over half a trillion $USD in trade with the US in favour of a whopping $85B with Venezuela and Peru.

  


Point taken. But that half a trillion comes with strings attached and effectively makes Mexico into a vassal state. And if you call that progress, then why not opt for re-colonisation instead.

 

Enrique 12.02.2014 10:46

The Pacific Alliance, with 210 million people, doesn´t account for "50 percent of the population in Lain America" but for 37% given the fact that total Latin American population is 567 million people.

In fact, just Brazil have a population of 201 million people, and the total for Mercosur is over 275 million people, so 30% bigger than the Pacific Alliance.

T he Pacific Alliance, if it is for Spanish speaking Latinamerican countries would be great, a Bolivarian dream...but if they include Canada, Israel and the USA, it would be just an American Protectorate, a U.S. project to compete with Mercosur.

 

Snooping Iswrong 12.02.2014 08:46

These presidents are recognized lackeys for the evil empire. The worst are Santos (distant cousin of the evil Rothschilds) and Piñera (deals with Rockenfelder (Rockefeller)).
So the normal outcome is that the alliance will only benefit the oligarchy and the evil empire, not the people.
Besides, it is specifically designed to weaken the Celac, Unasur and the Mercosur, which are authentic alliances without imperial extern meddling.
We are an increasing portion of Latinoamericanos who want the Union of Latinoamérica, as a prosperous, sovereign and peaceful country.

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