Chile, Colombia, Mexico and Peru are taking steps to strengthen their ambitious trade bloc known as the Pacific Alliance. Featuring some of Latin America's fastest-growing and most liberal economies, the bloc is intended to be much more than a free-trade agreement. It marks a strategic shift on the part of member states, which has the potential to shape their foreign policies, as well as to change the social and political dynamics of the region.
The original impulse for the Pacific Alliance was the expansion of foreign trade on a global scale. It is part of a broader trend in which the protracted nature of World Trade Organization (WTO) negotiations is pushing major trading nations to pursue regional and inter-regional agreements, which can be drawn up much more quickly. Having previously pursued foreign investment on a unilateral basis, alliance members have seized upon the emergence of new 'mega trading blocs' as a historic opportunity to move away from their traditional role as commodity suppliers. Seeking to market themselves as a manufacturing and investment hub, strategically located between the Asia-Pacific and Europe, alliance members are claiming a greater role for themselves in the global economy.
The economies of the four founder members of the alliance have traditionally been based on commodity exports, particularly metals, while they have imported manufactured goods. But over the past decade, the rapid growth of commodity-hungry economies such as that of China has in turn resulted in new investments, jobs and cash being funnelled into Latin America, whose own economies grew by an annual average of 4%. The same geographical position that left the four countries (especially the most southern ones) at a disadvantage when global economic power rested mainly with the United States and Western Europe now puts them in a central position on emerging trade and investment routes between Asia and Europe.