The Pacific Alliance closes the year with a busy last week. A couple of significant events took place and deserve some consideration. First the meeting of the technical groups in Bogota from the 11 to the 13 December. Second the presidential election in Chile.

The meeting in Bogota gathered more than a dozen technical groups and subcommittees on issues regarding tourism, gender, institutional matters, digital agenda, education,  regulatory cooperation, innovation, external relations and SMEs. Around 160 government officials from the four countries attended the meeting to discuss progress in the different areas and the action plans for 2018.

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This week the Pacific Alliance Council of Ministers announced the approval of the guidelines for states to become associates of the PA. The move is a response to the persistent interest that some of the observer states have in the mechanism and a push to move forward with economic and political relations with those observer states of ‘higher interest’.

The brief guidelines outline the requirement that, to become an associate state, the candidate should conclude a mandatory economic and commercial agreement with the four PA members that follows ‘high standards‘.  Although the guidelines are rather vague as to what constitutes a high standard agreement it seems to refer to the disciplines that shall be covered, including trade in goods, services and investment. It is also an underlying requirement that the agreement encourages openness and market integration along with its alignment with the general objectives of the PA.

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President Bachelet has recently expressed particular interest in Argentina becoming a PA member, and as Pro Tempore president of the integration mechanism will devote efforts to this end. Let’s remind us that since the second semester of 2016 Argentina officially became an observer of the mechanism.

However, going beyond the political rhetoric of presidents we need to consider the long-term economic and institutional implications for the PA in this scenario.

Despite efforts by the Argentinian president to signal a change in foreign commercial policy, there is a lot of uncertainty as to whether this is a move reflecting a shift in state policy or rather a short term policy of Macri’s government. Uncertainty on the continuity of this policy after the long lasting protectionist approach of the Kirchner era would not contribute to ensuring stability in this front for the PA. The PA is an integration model that has clearly characterised itself by the alignment of its members regarding commercial foreign policy and development approaches. Changes in unconsolidated state policies by a newcomer such as Argentina could not only slow down the pace but lead to stagnation, as seen in previous integration experiences.

On the other side of the table, Argentina should and will probably focus on putting things in order within Mercosur after Venezuela’s suspension from the integration scheme. This situation triggered a most recent institutional crisis for Mercosur and Argentina’s delegation of the pro-tempore presidency. Joining the PA as a full member would only represent another example of ‘the scape forward approach’ that Latin American governments and states often take towards regional integration.

Finally, I am not sure that with the short length of pro-tempore presidencies within the PA Chile should be investing efforts into extending the number of countries in the PA rather than setting and implementing a work agenda that could strengthen the economic ties and other integration areas within the already existing members. People might say these are not excluding issues but they de facto could be when limited human resources are devoted to performing multiple tasks like is the case in the PA. There is a need to prioritise efforts and areas of work.

The issue could be just part of the rhetoric accompanying the recent presidential visit of Bachelet to Macri, but places on the stage a major missing factor: a clear policy line and criteria regarding new members accession/entry to the PA.

Is the PA ready for the newcomers?

I look forward to your comments on this issue.

Sources: panampost.com

reuters.com

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It has already been documented that one of the main reasons for the early success of the Pacific Alliance lies in its ability to show and prove real results by tackling areas and projects where member states share common views and interests. These refer to non-contentious areas such as cooperation in education, innovation, science and technology, as well as the promotion of SMEs.

However sooner than later the PA will have to deal with more sensitive areas of the deep integration process if it is to live up to the expectations created. The PA needs to work on the high hanging fruits and test the political will to tackle these areas which include:

Labour Mobility: this field comprises not only flexibility of migratory requirements for high and medium skill professionals and technical personnel, but also the recognition of their qualifications and requirements to practice in the territory of the parties.

Financial Integration: although parties are working into integrating their stock markets through MILA the operations undertaken within it continue to be low due to hurdles from different sources including differences in regulatory frameworks, barriers to institutional investors such as pension funds and inefficiencies coming from dual fees and non-unified clearance systems.

Unleash the potential of energy integration: Marczak and George call on the need to work on a comprehensive integrated energy matrix within the PA using the Central American (Central American Interconnection System) experience as a precedent.

Progress in these areas requires high levels of regulatory harmonization and convergence that could trigger disagreements among domestic stakeholders benefited by the status quo regulation. Moreover, engaging the private sector participation in funding long-term projects continues to be a challenge. Again harmonisation of regulatory frameworks regarding public-private partnerships constitutes a step in this direction.

I look forward to hearing your insights on areas of work that continue to be high hanging fruits of the Pacific Alliance Integration.

Sources: Jason Marczak and Samuel George, ‘Pacific Alliance 2.0: Next Steps in Integration’ (Atlantic Council and Bertelsmann Foundation, May 2016)

Abstract:
The more recent waves of regionalism in Latin America have been associated, respectively, with structuralist, neoliberal and post-liberal economic and political experiments in the region.

Structuralist regionalism was launched in the 1950s and somehow survived until the 1970s; open regionalism followed in the 1980s and 1990s and was replaced, to a certain extent, during the next decade by post-liberal regionalism.

However, the limits, if not demise, of post-liberal experiments in the most important economies of Latin America pose the question of the future of regionalism. In this changing situation, this paper explores several questions about the future of regionalism in Latin America. Will regionalism hold sway over Latin America? Will present integration schemes continue in the region? Will new entities arise? Will there be a convergence in diversity between integration projects in Latin America? Will the new context of global uncertainties lead to a revival of regionalism?

Author: Alberto van Klaveren
Full document: 2017, Klaveren, Regionalism in Latin America -Navigating in the Fog

Abstract:
This article presents an analysis of the different approaches proposed by authors who have conducted research on Latin American integration and regionalism. This study suggests that there are three competing initiatives of integration and regionalism in the third wave of Latin American integration: Post-Liberal Regionalism contained within UNASUR and ALBA, Open Regionalism Reloaded in the region through the Pacific Alliance, and Multilateralism or Diplomatic Regionalism with a Latin American flavour envisaged in the recently created CELAC.

The study concludes that these new developments of a regionalism à la carte are a product of dislocation of the economic agenda of regionalism towards a set of diverse issues. Hence it demands a rethinking of the theorisation of Latin American Regionalism.

Resumen:
Este artículo analiza las diferentes perspectivas propuestas por investigadores sobre integración en América Latina y sugiere que hay tres iniciativas concurrentes de integración y regionalismo durante la tercera ola de integración latinoamericana: regionalismo post-liberal, sostenido en la UNASUR y ALBA; regionalismo abierto reforzado, que ha sido reinsertado en la región por medio de la Alianza del Pacífico, y el multilateralismo o regionalismo diplomático que contiene un tinte latinoamericano y que se perfila en la recién creada CELAC.

El documento concluye que estos nuevos acontecimientos representan un regionalismo à la carte producto de un dislocamiento de la agenda económica del regionalismo latinoamericano hacia un conjunto de temas diversos que obligan a repensar la teorización sobre este fenómeno.

Authors: Cintia Quiliconi and Raúl Salgado Espinoza
Full document: 2017, Quiliconi & Salgado, Integración Latinoamericana- ¿Regionalismo à la Carte en un Mundo Multipolar?

Abstract:
The purpose of the article is to examine the Mexican experience in its relations with MERCOSUR and the difficulties to establish a consistent and profitable relation with this regional block. At the same time, the article questions the creation of the Alianza del Pacífico considering the poor results of the Mexican relation with MERCOSUR. The argument is that the Alianza del Pacífico offers the kind of regional integration that responses to Mexican interests, focused primarily in trade and commerce that leaves social aspects of integration totally apart.

Resumen:
El propósito del artículo es revisar la experiencia de las relaciones entre México y el MERCOSUR y señalar las dificultades para consolidar una política consistente entre México y el bloque regional del sur. Al mismo tiempo, el artículo cuestiona la viabilidad de que México pueda lograr una relación más constructiva y fructífera con la Alianza del Pacífico, ya que la experiencia con el MERCOSUR no ha sido tan positiva. El argumento central es que la Alianza del Pacífico, sí, responde a los intereses regionales mexicanos, que deja de lado los aspectos sociales de integración para centrarse con mayor énfasis en la importancia de las relaciones comerciales.

Author: Luis Ochoa Bilbao, Rafael Velázquez Flores
Spanish Title: México, el MERCOSUR y la Alianza del Pacífico: intereses, identidades y prioridades regionales
Full document:2014 Bilbao & Velásquez, México, el Mercosur y la Alianza del Pacífico- intereses, identidades y prioridades regionales

Abstract:
This paper analyses the current scenario of regional economic integration in Latin America. Thus, it is argued that economic integration in this region is currently developing in three axes: an open integration axis (represented by the Pacific Alliance); a revisionist axis (symbolized by the Southern Common Market –Mercosur-) and an anti-systemic axis (represented by the Bolivarian Alliance for the People of our America –ALBA-). In each of these initiatives, diverse models of regional economic integration have been adopted. The relation between the current regionalist axes and the diverse models of economic integration in Latin America is discussed in the paper. Similarly, the paper evaluates the extent to which extra-regional initiatives, such as the European Union, the North American Free Trade Agreement (NAFTA) and the Association of South East Asian Nations (ASEAN) have also influenced on the models of economic integration in Latin America.

Author: José Briceño-Ruiz
Full document: 2014, Briceño, Regional Dynamics and External Influences in the Discussions about the Model of Economic Integration in Latin America