Abstract
The Pacific Alliance is a powerful, new regional trading bloc. It is constituted by Colombia, Peru,
Chile, and Mexico. Panama is applying to become the newest member. The Pacific Alliance
represents more than 200 million people with a total of US$2.22 trillion GDP; their combined global
trade accounts for half of the Latin American total, while the breadth of their free-trade agreements
have positioned them to increase commerce with Europe, the US and specially Asia.
This report is divided into four sections. The first section considers the emergence of the regional
agreement and provides an overview of the analysis. The second chapter provides an economic
and political analysis of Panama and discusses how it can take advantage of joining the Alliance,
emphasizing the macroeconomic stability of the four countries. The third section analyses the role
of the Alliance as a platform for global value chains to the Asian market. The final section debates
the policy implications for Panama and its members, first its ramifications through trade
agreements, the role of Asia in Latin America, and the emergence of other agreements
complementary to the Alliance
The study concludes that Panama should join the Pacific Alliance. Significant challenges remain, but
the trade platform can benefit all of the member countries. The paper outlines a golden opportunity
for Panama to achieve prosperity; it is optimistic, arguing that the benefits more than outweigh the
costs.
Refereed
Yes
