Most Trade Among Pacific Alliance Countries Expected to be Duty-Free in 2015
The four members of the Pacific Alliance signed this week an agreement to eliminate tariffs on 92% of goods and services traded among themselves. The agreement must now be approved by each country’s legislature and is expected to take effect sometime in 2015. Reports say that member countries will have up to 17 years to phase out the remaining 8% of tariffs on sensitive agricultural products but that the agreement will exclude sugar.
The Pacific Alliance was formally established in 2012 by Colombia, Mexico, Peru and Chile as part of an effort to diversify their economies and increase their competitiveness in a global economy marked by the accelerating negotiation of regional trade pacts. Together these four countries account for about 210 million consumers, 35% of total Latin American GDP and 55% of the region’s exports.
Costa Rica signed this week an agreement to join the bloc, possibly later this year, and reports indicate that Panama and Guatemala could follow shortly. There are more than two dozen observers, including the U.S., Spain, Japan, Australia, New Zealand, Canada and Israel. The Mercosur trade bloc, which comprises Argentina, Brazil, Paraguay, Uruguay and Venezuela, has reportedly indicated an interest in discussing integration between the two groups.