Latin America trade bloc summit opens with call for integration

July 24, 2018 (4 weeks ago)
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The Pacific Alliance, meeting in Mexico’s Puerto Vallarta, accounts for 38 percent of Latin American GDP and represents the eighth largest economy in the world, with a population of 223 million people © AFP / Alfredo ESTRELLA

, Puerto Vallarta, Mexico, Jul 23 – Latin American trade bloc the Pacific Alliance opened a week-long summit on Monday with a free trade and integration message at a time where protectionism, particularly in the United States, has created growing concerns.

The bloc groups four of the region’s largest economies: Chile, Colombia, Mexico and Peru. The leaders of Brazil, Argentina and Uruguay are also attending as guests.

Mexican Economy Minister Ildefonso Guajardo argued as the summit got underway that at a time of soaring global trade tensions, the group needed to remain “unwavering” in its commitment to “openness and integration.”

The Pacific Alliance, launched in 2012, accounts for 38 percent of Latin American GDP and represents the eighth largest economy in the world, with a population of 223 million people.

Collectively, its members are the world’s top exporter of goods ranging from avocados to copper to lead, and are the fifth-largest recipient of foreign direct investment.

That has drawn interest from other countries, including Australia, Canada, New Zealand and Singapore, which are all in the process of becoming associate members.

But the summit began without one key figure expected to attend: Mexican President-elect Andres Manuel Lopez Obrador, an anti-establishment leftist and free-trade skeptic.

The summit was supposed to be Lopez Obrador’s debut on the international stage ahead of his inauguration on December 1.

But the politician known as “AMLO” pulled out on Friday, saying it would not be proper to attend because electoral authorities have not yet officially declared him president-elect.

Electoral authorities have until September 6 to officially certify the results of the July 1 election.

There is no doubt about Lopez Obrador’s victory. He won with over 53 percent of the vote — more than 30 points clear of his nearest rival, who immediately conceded.

– Region shifts right –

Outgoing Mexican President Enrique Pena Nieto had appeared keen to get his successor started off on the right foot with key allies at the summit, despite the fact that Lopez Obrador was a bit of an awkward fit with the pro-trade group.

The invitation was “a good-will gesture by the Pena Nieto government” at a time when “there is a lot of uncertainty about which way Mexican foreign policy is going,” said Manuel Valencia, head of the international business program at Mexico’s Monterrey Institute of Technology.

Mexican soldiers patrol the dock in Puerto Vallarta, in Mexico’s Jalisco State, ahead of a summit of the Pacific Alliance © AFP/File / ULISES RUIZ

The other leaders at the summit are Sebastian Pinera of Chile, Juan Manuel Santos of Colombia and Martin Vizcarra of Peru, as well as guests Michel Temer of Brazil, Mauricio Macri of Argentina and Tabare Vazquez of Uruguay.

With the exception of Vazquez, they are all center-right, market-friendly leaders — the faces of Latin America’s recent shift to the right.

That is a trend that Mexico, long a regional outlier, has bucked by electing Lopez Obrador.

The rest of the region is anxious to see whether the new president of Latin America’s second-largest economy, after Brazil, will stick to his nationalistic guns or govern with the more pragmatic, pro-business tone he showed in the home-stretch of the campaign.

Lopez Obrador has vowed to be fiscally responsible, safeguard free enterprise and work together with the outgoing administration to continue renegotiating the North American Free Trade Agreement (NAFTA) with the United States and Canada, a deal he had criticized in the past.

Guajardo said on Monday he saw a “window of opportunity” to resume NAFTA negotiations, stalled over US demands.

Jesus Seade, the incoming Mexican negotiator in the complex NAFTA talks, meanwhile told reporters in Puerto Vallarta he was looking to finalize the process.

“All the positions that have been put forward are good ones, those that have been rejected were rejected for a reason — but that is a technical basis. Now we need to find a way to close the deal.”

Lopez Obrador’s recent change in tone has been welcome for Mexico’s Pacific Alliance partners, whose meeting comes at a time of trouble.

US President Donald Trump’s attacks on trading partners from the European Union to North America to China and the retaliatory measures they have launched in return have raised the specter of global trade war.

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