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Pacific Alliance is the new economic power

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Staff writer ▼ | May 30, 2013
Pacific AllianceWhile the eyes of the business world are on the U.S., Europe and China, a new powerful economic alliance was created almost in the shadow.


The presidents of the Pacific Alliance - Chile, Colombia, Mexico, and Peru - met in Colombia to sign an agreement removing tariffs on 90% of merchandise trade and they intend to reach a deal by June 30 for adding duty-free treatment for the remaining 10 percent.

At its Seventh Presidential Summit, the alliance's power was very visible: together with presidents of the member countries, the leaders of Spain, Canada, Costa Rica and Panama attended along with delegations from the Uruguay, Japan and Australia, and corporate leaders from all around the world.

Colombian President Juan Manuel Santos said that the Pacific Alliance "is the new economic and development engine of Latin America and the Caribbean," and he was very right. The four Pacific Alliance members had a combined economic growth of 5 percent last year, while members of Mercosur (Argentina, Brazil, Paraguay, Uruguay, and Venezuela; with Bolivia) grew 2.9 percent, according to the United Nations Economic Commission for Latin America (ECLAC).

Chile, Colombia, Mexico, and Peru are the most dynamic in the region. They represent more than 40 percent of Latin America's economy with a market of more than 210 million people. Those countries have grown at a higher rate than their neighbors and have invested 25 percent of their combined GDP.

President Enrique Pena Nieto of Mexico said that members of the Alliance share "a vision in support of the rule of law and democracy, and the belief that with free trade we can find better competitiveness for our people."

Costa Rica President Laura Chinchilla, whose country is officially joining the Pacific Alliance, said that in Latin America, "we've had enough of ideology, slogans, and trying to find scapegoats. We have to assume our responsibility and complete the work that remains to be done in terms of development."

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