Lessons from Brexit for the Pacific Alliance

Lessons Brexit

Photocredits: Stuart Miles/FreeDigitalPhotos.net
Recently commentators and politicians have stressed the success of the PA scheme and compare it to the uncertain state of affairs in the European Union and the unexpected Brexit referendum results. They present the PA as a reference to follow.

However, I see that there are important lessons for the PA to learn from the EU situation and the British exit decision likely to materialise within the next two years. The reasons for the UK exit point to three important factors, identity conflicts paired with nationalistic rebirth, social inequality, and immigration concerns. The factors speak about the discontent of some sectors of the population over labour migration and the worsening of working conditions and paying for less qualified workers in the agriculture and services industry. The insufficient development of social policies and infrastructure (education, housing, and health) that could cope effectively with the demands of a growing population exacerbate tensions between social groups by overstretching the capabilities of the system in detriment of essential public service supply. These factors and the discontent of some groups of the population with the distribution of the benefits from the EU integration have created appropriate conditions for the nationalist sentiment to be revived and be fed by the pro exit campaigners. The results are evident, voters feeling disenfranchised with the integration project and paying the collateral costs voted to leave and won.

There are lessons worth considering for the PA to move forward in the future:

  • First, free movement of people. Mind the gap! Social policies and the development of the essential services infrastructure. Free movement of people is always a contentious issue in an integration scheme that awakens a lot of sensitivities. Minor progress has been made in the PA on this front in regard to business people, tourists, and other skilled personnel, but members maintain very cautious approaches and are willing to make limited concessions. Does the UK experience tell the PA that it should not move further on this front? Not really. Economic benefits of the free movement of people are indisputable but this is a policy that on its own could lead to disaster when readjustment policies are lacking for the social pockets bearing its costs. In countries like the PA members where there are massive inequality gaps, free movement of people alone could bring insurmountable tensions for the integration.
  • Second, reinforcing a regional identity is an overlooked issue within the PA where the focus seems to be building the common market. The recent UK experience confirms that the lack of citizen engagement with the integration project contributes to build on nationalistic rhetoric that in times of low economic performance could be seen as a viable  way out. I wonder if a regional identity is part of the imaginary of the PA leaders. Some efforts seem to point in this direction but they are not conclusive. Identity also takes times and the PA is still a young process.  Although I wonder if there would be a day in which a real PA identity could come to terms with the engraved nationalistic views of members such as Mexico.
Finally, other complex questions call for the need to define strategic views on structural aspects such as the acceptance of new members and clarity on the expectations and commitments that new members are willing to undertake in the long-term to built deep integration. Moreover, the operation of the institutional model today leans towards a clear preference for decentralised and an intergovernmental model but there is a need to ensure flexibility to review these institutional preferences when required.

I look forward to hearing your views on the lessons that the current EU state of affairs teach for the PA to move forward!

sources: economist.com