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Latin America Trade Bloc Calls for Closer Integration

Colombia’s trade and industry minister says the world is facing “The most complicated moment in its trade history. There is a clear protectionist trend mixed with certain populism”
(L - R) Peruvian President Martin Vizcarra, Chilean President Sebastian Pinera, the president of the Inter-American Development Bank Luis Alberto Moreno, Mexican President Enrique Pena Nieto and Colombian President Juan Manuel Santos, at the Business Meeting  of the Pacific Alliance in Mexico on Monday.(L - R) Peruvian President Martin Vizcarra, Chilean President Sebastian Pinera, the president of the Inter-American Development Bank Luis Alberto Moreno, Mexican President Enrique Pena Nieto and Colombian President Juan Manuel Santos, at the Business Meeting  of the Pacific Alliance in Mexico on Monday.

A return to trade protectionism led by the United States could cause serious risks for the global economy, Latin American trade ministers attending the fifth Business Meeting of the Pacific Alliance in Mexico said.

Mexico's Minister of Economy Ildefonso Guajardo said the "profound change" coming from Washington obliges other countries to assume new responsibilities for ensuring free trade. "We always expect that these swings in strategy are temporary, but we would be fooling ourselves," he added, Xinhua reported.

Otherwise, there could be serious consequences for the most vulnerable populations. "No one suffers more from closed economies than the poor," Guajardo said at the week-long summit which began Monday in Puerto Vallarta.

Colombian trade and industry minister, Maria Lorena Gutierrez, said the world is facing "the most complicated moment in its trade history. There is a clear protectionist trend mixed with certain populism," she added.

The consequences, if this trend continued, would be more conflict, not only in trade but also in economic and social matters, including vital aspects like security, she said.

Gutierrez also expressed concern that the efforts made to create multilateral organizations like the World Trade Organization and the Organization for Economic Cooperation and Development could be lost.

However, Peru's Minister of Foreign Trade and Tourism, Roger Valencia, suggested the current trade conflict begun by the United States could be temporary. He underlined the importance of the bloc to make joint efforts under such circumstances.

"The Pacific Alliance was born out of necessity and the discovery that the power we have is in working together and integrating ourselves," he said.

Chile's Director General of International Economic Relations, Rodrigo Yanez, said it is important for the Pacific Alliance nations to look toward other zones, including the Asia-Pacific region, an obligatory step in consolidating trade with this region.

Eighth Largest Trading Bloc

The Pacific Alliance, created in April 2011, is made up of Chile, Colombia, Mexico and Peru, and has more than 50 observer states.

The Pacific Alliance, launched in 2012, accounts for 38% 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.

Shift to the Right

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.

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 with the United States and Canada, a deal he had criticized in the past.

Guajardo said 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. Now we need to find a way to close the deal."

 

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