Pacific Alliance, Mercosur Leaders Ink Plan for Closer Ties at Puerto Vallarta Summit

The presidents of Chile, Colombia, Mexico, and Peru wrapped up a presidential summit for the Pacific Alliance this week, agreeing to bring the bloc closer with the neighbouring customs union Mercosur, while confirming South Korea as a new candidate for associate member status.

The leaders’ meeting, held in the Mexican coastal city of Puerto Vallarta, comes seven years since the Pacific Alliance was formed, with leaders pledging to dedicate themselves further to meeting their “strategic vision” for 2030 and support work that aligns with the UN’s Sustainable Development Goals (SDGs).

“We declare our firm goal of continuing to promote sustainable and inclusive economic development, and the competitiveness of Pacific Alliance members, in our globalised world by supporting free trade and regional integration,” leaders said in their final communiqué, known as the Declaration of Puerto Vallarta.

The Pacific Alliance meeting comes at a time of intensified international tensions on trade, which in turn has spurred many coalitions to ramp up their efforts at negotiating new trade accords or finalising existing processes. The geopolitical climate was noted by Colombian President Juan Manuel Santos during the meeting, who pledged at the summit’s close that he and his fellow Pacific Alliance leaders would work to ensure that their coalition serves as a powerful bulwark against protectionist pressures.

“We are proponents of free trade and we do not like protectionism, we instead support integration. We are part of this global architecture that has evolved bit by bit, carefully and with much difficulty, with the objective of developing a global order. We will defend multilateralism,” he said.

Along with looking at prospective new partners and the state of intra-regional trade, leaders also agreed to develop the Alliance’s work further in topics such as gender, where they hope to incorporate that lens into the group’s overarching activities, while reaffirming their existing commitments to multilateral environmental and climate accords.

The meeting also saw the end of Colombia’s presidency of the bloc, with the role now falling to Peru for the coming year. Peruvian President Martín Vizcarra said that his country, in its upcoming presidency of the Alliance, would aim to achieve a series of milestones aimed at advancing the coalition’s internal integration and the cementing of new partnerships.

Among these objectives, he said, would be “boosting intra-Pacific Alliance trade, make it easier for small and medium-sized enterprises (SMEs) to access financing, and wrap up negotiations with associate member candidates.“

Latam free trade zone?

Leaders highlighted that one of the key achievements of the Puerto Vallarta talks was reaching an “action plan” for the coming year that would bring their bloc closer to Mercosur, the long-standing customs union which includes Argentina, Brazil, Paraguay, and Uruguay as members.

“This was the first joint summit of the Pacific Alliance and Mercosur that allowed us to move from a roadmap to an action plan that allows us to prepare for a free trade zone covering much of Latin America,” said Chilean President Sebastián Piñera after the meeting.

The action plan was not publicly available at press time. However, a summary published by the Pacific Alliance indicted that the two groups have agreed to work on objectives such as “removing non-tariff barriers, regulatory cooperation, trade promotion and SMEs, trade facilitation in goods and services, and tourism.”

Both sides are also looking to “exchange experiences” on topics such as inclusive digital trade and gender, among others, and will meet regularly to review their progress on these various streams of work.

South Korea to become candidate for associate member

Foreign ministers met the day prior, which included preparatory talks for the leaders’ summit as well as discussions with trade ministers from Ecuador and South Korea, according to a communiqué published afterward by the Mexican government. Both Ecuador and South Korea have asked to be considered for associate member status with the Pacific Alliance.

The presidential declaration issued on Tuesday 24 July confirmed that South Korea will become a candidate for associate membership, while noting that talks with Ecuador on its request are still ongoing. Formal negotiations with South Korea to become an associate member will take place after negotiations wrap up with the four existing candidates for that same status.

Leaders also noted that talks with the four existing candidates for associate membership are advancing well, while stopping short of announcing particular breakthroughs. Officials from Australia, Canada, New Zealand, and Singapore are already negotiating to become associate members of the bloc, after the Pacific Alliance announced the creation of this new status one year ago. (See Bridges Weekly, 6 July 2017)

The Pacific Alliance has also expanded its roster of observer countries, adding on Belarus, Serbia, and the United Arab Emirates. Their group of observer countries now numbers at 55, covering parts of the Americas, northern Africa, Asia, Europe, and Oceania. That observer role differs significantly from associate member status, the latter of which involve the negotiation of free trade accords with the group.

For example, observers can participate in Pacific Alliance meetings upon invitation, and the role can be a launching pad for requesting associate member status so long as those observers had trade accords with two of the four Pacific Alliance full members.

One of the stated objectives of the Peruvian presidency will be to develop relationships with these observers further, including reviewing how to align these relationships with the bloc’s “strategic vision” for 2030.

Concurrently, Singapore and the Mercosur countries announced the launch of negotiations for a free trade accord on the sidelines of the Pacific Alliance meeting, which Mercosur officials praised as the bloc’s first foray into the southeast Asian region.

“Singapore is a commercial hub for one of the most dynamic regions in the global economy, and we hope that this process will generate opportunities for Argentina in goods and services trade in southeast Asia,” said the Argentine Foreign Affairs Ministry on Monday 23 July.