The Pacific Alliance in Search of Financial Integration: So Close and Yet So Far

This paper develops an analysis of how macroeconomic convergence among Mexico, Colombia, Peru, and Chile has translated into a non-intentional institutional and similar constitutional order, in areas as important as fiscal and monetary stability. The current reality opens many possibilities for deep financial integration and regulatory cooperation. These aspects are not sufficiently reflected in the Treaty and the Additional Protocol.

In fact, these instruments have followed the standard practice of previous Free Trade Agreements (FTAs) under the NAFTA model on financial services treatment that does not fit adequately with the objective of creating a free trade zone based on the free movement of capital and financial services.

An example of this reality is the timid development of mutual recognition of financial service authorisations in FTAs in contrast to the technical agenda of future developments in the Pacific Alliance. In this context, this paper offers some specific proposals for the peculiar institutional construction of the Pacific Alliance and regulatory cooperation. The proposals are based on the soft law experience of partners and the levels of convergence already obtained. The paper also reviews eventual consistency problems between financial integration and other international commitments of partners.

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Author: Manuel Monteagudo
Full document: 2017, Monteagudo, The Pacific Alliance in Search for a Financial Integration- So Close and Yet so Far