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Brazil Attacks Pacific Alliance

As the current round of the Pacific Alliance (PA) negotiations nears its final conclusion, representatives of the rival Mercosur bloc have begun to downplay its significance. Antonio Patriota, the Brazilian Foreign Minister, unfavorably contrasted the PA with the Mercosur group, calling the latter “full of life and dynamic” while diminishing the former as “an effort which brings together countries with similar characteristics, but not an alliance, or a free trade zone or a customs union, much less an integration project such is the case of Mercosur.”

Patriota’s remarks seemed specifically crafted to counter enthusiastic appraisals of the PA recently delivered by Chilean President Sabastian Pinera and Colombian President Juan Manuel Santos. In contrast to Patriota’s dismissiveness, Pinera interprets the PA as historically significant. He said, “[the]Pacific Alliance is much more than a Free Trade Agreement. It is an Agreement of deep and broad integration that involves the exchange of goods, services, investment, people, and at the same time is committed towards physical, infrastructure and energy integration.”

Likewise, President Santos called the new bloc “one of the significant processes towards integrations that have taken place in Latin America.”

The Pacific Alliance is a new free trade agreement that has already been signed by the presidents of Chile, Colombia, Mexico and Peru. Intended as a further step towards the liberalization of regional markets, it eliminates costly trade barriers between signatory nations, establishes a stable regulatory framework that governs intramural commerce, and permits businessmen and tourists to travel between them without visas.

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Though it has received scant media coverage, the breadth of the agreement is considerable. With a combined population of 204 million (36 percent of Latin America), a GDP of $1.7 trillion (35 percent of the region), the bloc will encompass more than half of all trade for Latin America.

Also, many view the new alliance as pregnant with political import. Latin America has become fragmented into two competing halves, one which embraces free market competition and privatization and one which clings to a retrograde statism and protectionism. The PA essentially codifies the commercial relationships among its member nations, all generally pro-US, that continue to court both foreign investment and competition.

Mexican President Calderon favorably compared the PA with Mercosur in economic terms. “Even when we are less in population and in the size of our economies compared to our brothers from Mercosur, we export double in volume and value than Mercosur. We have an extraordinary potential,” he said.

Later in his remarks to a roomful of foreign correspondents, Patriota softened his blustery rhetoric. He said, “When I say that the alliance is marketing or a new package for the same existing produce I’m not trying to downplay, since we are talking of countries that are most important for Brazil. And Brazil hopes and expects that this effort will help make those economies more dynamic and elevate living standards.”