The Authorised Economic Operator in the Pacific Alliance

The Pacific Alliance (PA) is a regional integration initiative comprised of Chile, Colombia, Mexico, and Peru. With 215 million inhabitants, the PA’s countries account for just over 40% of Latin American GDP, as well as 52% of total trade and 45% of FDI in the region.

They are also the four nations that occupy the top four places for Latin America in the 2016 World Bank’s Doing Business index. As a bloc, they aspire to become a platform for political articulation and projection to the world, with an emphasis on the Asia-Pacific region.

Indeed, an example of these shared objectives is the Authorised Economic Operator (AEO), an institution born after the establishment of the Customs-Trade Partnership Against Terrorism (C-TPAT) by the U.S. Customs and Border Protection (CBP), as a part of a multi-layered cargo enforcement strategy.

Through this program, the CBP works with the trade community to strengthen international supply chains and improve border security. The AEO Program is, at the same time, part of a much larger and ambitious global initiative, supported by both the World Trade Organization (WTO) and the World Customs Organization(WCO). Each of these international institutions has encouraged new measures towards Trade Facilitation, where the SAFE Framework is a specific application of the principles set by the Bali Package.

The AEO Program is aimed at cooperation based on 3 pillars:

(1) Customs-to-Customs;
(2) Customs-to-Business and Authorised Economic Operator; and
(3) Cooperation between Customs and other Government and Inter-Government agencies.

This research portrays an up-to-date status of the AEO Programs in the PA, while shining a light on the different obstacles these programs have encountered and what probable outcomes will be in the coming years.

Our primary goal of this investigation is to answer two questions:
1. What is the current situation of the AEO programs within the Pacific Alliance?
2. What impact will the PA’s AEO programs have in the medium term? Can these programs become as successful as C-TPAT?

Author: Jorge Vega Cancino
Full document: 2017, Vega, The Authorized Economic Operator in the Pacific Alliance