The presidents of Chile, Colombia, Mexico, and Peru—which together represent 36 percent of Latin America’s GDP—begin arriving in Cali, Colombia, today for the seventh Pacific Alliance Summit. Spanish President Mariano Rajoy, Canadian Prime Minister Stephen Harper, Guatemalan President Otto Pérez Molina, Costa Rican President Laura Chinchilla, Panamanian President Ricardo Martinelli, and representatives from Australia, Japan, New Zealand, and Uruguay will also be attending the presidential summit on Thursday.
Members of the Pacific Alliance bloc, created last June, are focusing on decreasing trade barriers and fostering the free circulation of goods, services, capital, and people. One way it seeks to accomplish this is by making the elimination of travel visas between member-states a requirement—a sticking point that could deter Canada from becoming a member. The rapidly-growing alliance differs from other regional groups such as Alianza Bolivariana para los Pueblos de Nuestra América (ALBA), Mercado Común del Sur (Mercosur) and Unión de Naciones Suramericanas (UNASAUR) in that it seeks to capitalize on global flows rather than protect against globalization.
This week’s meeting marks the seventh presidential summit in two years to promote greater economic opportunities and deepen cooperation between Latin America and Asia-Pacific countries. While the Trans-Pacific Partnership (TPP) already includes Asian members, Mexican Vice-Minister of Foreign Affairs Sergio Alcocer believes that the Pacific Alliance’s focus on bilateral trade agreements across the Pacific could open up Asian markets before the TPP.
Today in Los Cabos, Mexico, at the G-20 summit, U.S. Trade Representative Ron Kirk welcomed Mexico into the Trans-Pacific Partnership (TPP), an agreement currently under negotiation by nine Pacific nations. Mexico is an obvious and logical country for participation, particularly given the NAFTA relationship with the United States and Canada, and expressed interest in joining last November at the Asia-Pacific Economic Cooperation (APEC) meeting in Hawaii. Canada also expressed interest in the TPP at the same time, and will presumably be welcomed in the short term once last minute kinks in the pre-negotiation process are worked out.
Until today, Mexico and Canada were the two remaining APEC nations in the Western Hemisphere outside the TPP negotiations. Having them on board will strengthen the negotiations by bringing significant added economic heft, support increased hemispheric economic integration, and begin to build out a more strategic approach to hemispheric trade relations. In addition, there is no particular reason to believe at this point that the negotiations will be slowed appreciably by Mexico’s participation.
Making the announcement on Mexico today was an important step, given President Felipe Calderón’s hosting of the G-20 as well as the imminent elections in Mexico on July 1. At the same time, it is a signal to other prospective TPP participants that the process is open and welcoming to those nations willing and able to sign on to the high-standards, commercially-meaningful approach that has been set out by the original parties to the discussions. That is a critical incentive to encourage potential TPP nations to make the reforms that will position them to participate in the agreement.
Of course, this is only relevant for nations that would be allowed into the agreement in the first place even if they take such steps. At this point, only current APEC member nations are eligible to join the TPP negotiations. This unnecessarily binds U.S. policy in the Western Hemisphere, because it means that countries like Colombia, which otherwise would appear to be excellent candidates, have little additional incentive to prepare themselves politically or economically to participate in the TPP. That in turn causes nations to seek other partners in order to achieve the same goals. Indeed, we are seeing exactly that phenomenon across Latin America.
Today marks the date of entry into force of the U.S.-Colombia free-trade agreement (FTA). What a long, strange trip it’s been since the agreement was signed in 2006. The rear-guard action of those opposed to trade generally, those opposed to the United States in Latin America specifically, and those who sought to use the agreement as leverage to promote narrower special interests has been fierce. In the end, however, it became politically untenable and strategically short-sighted to continue to deny both Colombian as well as U.S. citizens the benefits of the trade agreement, and, as a result, today marks the beginning of a new chapter in U.S.-Colombian relations.
Nonetheless, amid well-deserved celebrations within the trade community, we should not lose sight of the fact that the current moment is just the next step. It is a critically important step, to be sure, one that should have occurred years ago, and one that, by its absence, held up much of the rest of the hemispheric agenda for the past several years. It is important that the U.S.-Colombia FTA be seen as a tool for the improvement of the lives of people in both nations, and that, together, we work toward that outcome through close attention to the implementation process. And it is equally important that the United States and Colombia begin now to work toward a broader trade agenda, one that would bring Colombia as a Pacific nation into the Asia-Pacific Economic Cooperation (APEC) forum as well as near-term participation in negotiations to create the Trans-Pacific Partnership. Colombia should also be invited to join the G20 as a permanent member, and, once all standards have been adequately met, the Organisation for Economic Co-operation and Development (OECD), too.
Colombia is a nation on the move, and an engaged, strategically-minded United States would seek to capitalize quickly on the success of the bilateral FTA by working with others to bring Colombia into the broader global trade and investment architecture. Colombia has a well-established and hard-earned record of success, and it has proven over the years to be a close friend of the United States. At a time when we need allies globally, we should do what we can to promote Colombia’s broader ambitions, consistent with our own interests, just as we are doing with nations outside this hemisphere.