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News > World

Pacific Alliance Free Trade Push Seized by Australia

  • The twelfth Pacific Alliance summit in Cali, Colombia, June 29, 2017.

    The twelfth Pacific Alliance summit in Cali, Colombia, June 29, 2017. | Photo: Reuters-The Australian

Published 30 June 2017

Canberra hopes a deal could open the way for a major agriculture and services export drive into Mexico.

Australia will become the first country to pursue a trade agreement with the Pacific ­Alliance after Canberra was admitted to the bloc as an associate member.

Pacific Alliance Eyes Expansion But Doubt Cast on Benefits

Founding members Colombia, Chile, Mexico and Peru are attending the group's twelfth bi-annual summit in the Colombian city of Cali.

On Thursday, Singapore, Australia, New Zealand and Canada joined the bloc as associate states.

Australia hopes a deal could open the way for a major agriculture and services export drive into Mexico.

Uncertainty about the Mexican government's rocky relationship with U.S. President Donald Trump's administration is thought to have pushed forward the agreement.

Reports say Australia has been working behind the scenes with Alliance as Washington  moved away from ratifying the 12-nation Trans-Pacific free-trade zone.

Three members of the bloc are in the Trans-Pacific Partnership, TPP, with the exception of Colombia.

Trump said he would leave the TPP as soon as he took office in January.

The Pacific Alliance was formed in April 2011, aimed at improving trade flows and bolstering investment. 

But it has faced strong criticism from Bolivia's President Evo Morales. 

Morales says the bloc infringes on other nations' sovereignty and seeks to exploit rather than redistribute wealth.


Bolivian President Slams Pacific Alliance Trade Bloc

But the Colombian President Juan Manuel Santos believes the expansion could provide benefits and outlined the progress made at the summit, "We are going to register the creation of a common fund to finance infrastructure, we are going to open the alliance to associate members so that we can establish different relations with interested observers to affiliate in some way with the four countries that have the most dynamic economies in Latin America".

While his Chilean counterpart Michelle Bachelet said, "I want to express our willingness to move toward greater integration through the creation of the associated state figure of the Pacific Alliance".

If counted as a single country, the economies of the four member nations would form the eighth-biggest economy in the world, let alone its 52 observer nations which include China, Germany and Japan. 

Colombia’s migration director Christian Kruger said the group will explore whether to create a single passport for its four member nations in an effort to encourage tourism and trade across the world. 

"One of the instructions, the commitments you want to achieve in the development of this great Pacific Alliance is the ease of migratory mobility," Kruger said. 

Such a move would allow Colombians, Chileans, Mexicans and Peruvians to travel without a visa to other countries that enter the trade bloc.

The alliance also reached a tax agreement for pension funds in an effort to stimulate investment in infrastructure projects. 

Administrators in the four countries have about US$450 billion to invest in sectors like highways and other infrastructure projects. The maximum tax rate charged n pension fund investment returns will be 10 percent.

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