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Pacific Alliance frees 92% of its traded products

Pacific Alliance frees 92% of its traded products

Posted by PanamericanWorld on February 17, 2014

Chile has once again marked a milestone in its international trade history by signing the Additional Protocol to the Pacific Alliance Framework Agreement with Colombia, Mexico and Peru, to reach 92% of trade tariff-free with the Pacific Alliance (PA) members. From 2015, the main products and inputs will flow freely between the four countries.

The group expects to lift the barriers for the remaining 8% by 2019, as it entails mainly agricultural products that are vulnerable and significant to each economy, such as coffee, corn, wheat, bananas and beans. The only product to remain exempt from these measures will be sugar, since it is considered a sensitive commodity in the four countries.

Just twenty months from its creation in June 2012, the alliance has managed to achieve what has taken decades for other trade blocs. Furthermore, the group approved the inclusion of Costa Rica, which reaffirmed its willingness to keep doors open in order to broaden the scope of the zone where goods, services, capital and labor circulate almost freely.

The four founding nations amount to 212 million inhabitants, generate US $2,000B, or 36.6% of LatAm’s GDP, attract 41% of foreign direct investment inflows and account for 50% of the region’s total trade, resulting in them being the world’s 7th exporting power. However, there is still much room for integration, since trade within the PA represents only 4% of the members’ total exchange relations.

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