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Regional Integration in Latin America - The Pacific Alliance a Way Ahead
Featured, In Conversation

The Latin American Services Factory for the Asia Pacific Region: Opportunities for the Pacific Alliance

The Pacific Alliance Blog spoke recently to Juan Felipe Toro-Fernandez, our new contributor to the Blog. We interviewed him about his research regarding the extent to which the Framework Agreement in the Pacific Alliance and the Comprehensive and Progressive Agreement for Transpacific Partnership (CPTPP) could become the pathway to developing “The Latin American Services Factory for the Asia Pacific”.Photocredits: Juan Felipe Toro-Fernandez

Mr Toro-Fernandez is a founding partner and the current legal manager of Kesher Business & Investments, a firm specialising in supporting companies in their internationalisation and expansion strategies in Latin America with a focus on the Colombian market. He is also a lecturer at the Law School in Universidad EAFIT and for other universities in Colombia. Mr Toro-Fernandez holds a Master in International Law, Investments, Trade and Arbitration from Universität Heidelberg and Universidad de Chile.

Mr Toro-Fernandez, how did you become interested in the topic of international investments in the Pacific Alliance?

I chose the topic of international investments in the Pacific Alliance because between 2017 and 2018, I carried out a research project that was part of my master’s degree. I titled the thesis “Normative Convergence Between the Pacific Alliance and the Comprehensive and Progressive Agreement for Transpacific Partnership as a Way of Attracting Investments and Promoting Services Chaining with Asia-Pacific: Analysis and Normative Comparison of both Investment Chapters“.

My goal was to compare and survey the investment chapter in the Additional Protocol to the Framework Agreement of the Pacific Alliance (PA) with the investment chapter in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). I wanted to examine convergence opportunities between both regimes to attract investments and promote services linkages (mode 3, commercial presence) with the Asia Pacific region.

I studied both legal regimes accounting for the origins and background of the investment subject and their legal structure. I endeavoured to compare their legal frameworks and address the question of the extent to which these agreements incorporated new generation investment protections for the investors (and the states). I also questioned whether these legal provisions contribute to attract investments and foster productive linkages in the services sectors between the PA and the Asia Pacific region.

I concluded that both investment chapters corresponded, were similar and therefore converged in terms of international investment standards (new generation clauses) such as non-discrimination standards (National Treatment and Most Favoured Nation), absolute standards of protection for the investors (eg, the Minimum Standard of Treatment, Fair and Equitable Treatment, Full Protection and Security), investment protection standards (eg Expropriation, Compensation and the free transfer guarantee), and Investor-State dispute resolution.

I also concluded that the degree of legal harmonisation and convergence achieved through both agreements allows for attracting foreign investments in Latin America and promoting services linkages with the Asia Pacific region.

What does the notion of a Latin American Services Factory for the Asia Pacific entail?

The third chapter of the thesis aims to examine the extent to which both legal regimes — the PA and the CPTPP — allowed for the promotion of services linkages connected with mode 3 of services supply (commercial presence). This idea was presented under a collaboration scheme that I named “the Latin American Services Factory for the Asia-Pacific.”

I understand “the Latin American Services Factory for the Asia-Pacific” as a business conglomerate, business structures linked to one another in an organised manner through horizontal collaboration schemes/networks. These schemes interconnect to provide services to large companies from the Asia Pacific region.

I also envisioned the schemes as an organised gear of small, medium and large enterprises based on all the PA members. These enterprises will supply services to multinational companies throughout all the stages of the supply chain. These enterprises interconnected around the Factory could also receive capital investments from the multinational companies located in the Asia- Pacific countries under vertical schemes.

Finally, I put forward the idea that the “Latin American Services Factory” for the Asia-Pacific would develop as a regional linkage within the PA under a specialisation model where concrete tasks would be allocated throughout the several stages. The Services Factory should promote services supply not only amongst the PA members but also with countries in the Pacific Rim, emphasising the CPTPP members.

Are the Pacific Alliance countries ready to lead a process to structure and develop such Latin American services factory?

I believe that this is the case. By having such a broad regulatory framework, the PA is prepared to lead and advance these productive linkage types between the members. I also maintain that a broad regulatory framework for the PA allows its members attracting investments from companies located in the Asia Pacific region.

Continue reading

March 10, 2021by Ana Maria Palacio
Spanish, Theses

Prospects for the Pacific Alliance to Generate Productive Chains

Abstract:

This case study presents a revision of the methodology to analyse productive chains in the frame of global value chains. It incorporates a new dimension for analysis regarding the political and strategic factors that favour these chains to develop at the regional level in the context of regional integration processes. Complementing this approach, the paper considers the Asian experience and its active participation in global value chains and production networks to examine the new Latin American bloc –The Pacific Alliance. It aims to determine whether this bloc could create favourable conditions for intra-regional productive chains to achieve more effective insertion into the global economy.

Resumen:
Este estudio de caso presenta una revisión a la metodología para el análisis de las cadenas productivas en el marco de las cadenas globales de valor, e incorpora una dimensión de análisis referente a las condiciones políticas y estratégicas que pueden facilitar el establecimiento de este tipo de encadenamientos a nivel regional, en el ámbito de los procesos de integración. A partir de este esquema de análisis y del estudio de los factores relacionados a la experiencia asiática en la conformación de cadenas globales de valor, particularmente en lo referido a la articulación de procesos productivos, se analiza la Alianza del Pacífico – esquema de integración regional latinoamericano – para determinar si su creación podría generar condiciones favorables a la consolidación de encadenamientos productivos intra regionales que le permitan lograr una mejor inserción en el escenario económico internacional.

Author: Julybeth del Valle Márquez Molina
Spanish Title: Perspectivas de la Alianza del Pacífico para la Generación de Encadenamientos Productivos Regionales
Full document: 2013, Marquez, Perspectivas de la Alianza del Pacífico para la Generación de Encadenamientos

March 14, 2016by Ana Maria Palacio

Recent Posts

  • Towards a Digital Economy Strategy for the Pacific Alliance?: The Broader Agenda
  • The Latin American Services Factory for the Asia Pacific Region: Opportunities for the Pacific Alliance
  • Academic and Policy Research About the Pacific Alliance: A Snapshot
  • In Conversation: A Collective Identity in the Pacific Alliance
  • On Social Entrepreneurship and the Pacific Alliance: An Invitation

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Hello my name is Ana Maria Palacio. I have a PhD from the University of Melbourne. This blog is about my thesis project, the Pacific Alliance.

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