Pacific Alliance Business and Investment Guide 2017-2018

Second edition of the Pacific Alliance Member Countries Business and Investment Guide in English

The Pacific Alliance is a regional integration initiative signed by the presidents of Chile, Colombia, Mexico, and Peru on April 28, 2011, as an expression of the member countries’ willing commitment to a deep-seated integration, as part of their efforts to progress toward the free movement of goods, services, capital, and people, and to facilitate trade and customs cooperation. This will drive greater growth and create jobs, development, and competitiveness in the member economies, with the goal of promoting greater prosperity, overcome socioeconomic inequality, and promote the social inclusion of residents.

With an accumulated GDP of US$1,770 billion, and US$3,850 billion measured in purchasing power parity (PPP) (accounting for over 38% of the total GDP of Latin America and the Caribbean) and a projected 2.3% growth in their average GDP for 2017—well above the average of 1.1% forecast for Latin America as a whole—the Pacific Alliance has consolidated itself as a highly significant bloc, given its economic importance and its openness to trade. It also has a high degree of trade complementarity with the world’s largest economies, particularly those of the Asia-Pacific hub, making it even more attractive.

GDP growth rates

In 2017, the Pacific Alliance ranked as the world’s eighth-largest economy, having been the recipient in 2016 of over 41% of the direct foreign investment to Latin America, equaling nearly US$42 billion. The Pacific Alliance is also notable for its average inflation and unemployment rates of 3.8% and 6.7% in 2016, respectively, both lower than the regional average. Additionally, the sustained reduction of its poverty rates over the last decade has been truly remarkable.

Individually, the four member countries have achieved the best investment grades in the entire region as of the close of 2016, which naturally not only attracts investors and benefits interest rates, but also constitutes an endorsement of the improvements in their social and macroeconomic indicators. They also have the highest percentages of private investment, direct foreign investment, and international reserves as a share of GDP, compared to the other countries of Latin America.

Total trade by economic blocs 2016 (US$ Billions)