Is the PACIFIC ALLIANCE a New Powerhouse? – VisualPolitik EN

Is the PACIFIC ALLIANCE a New Powerhouse? – VisualPolitik EN

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Every time a Latin American government tries
to discuss foreign policy and development, they end up discussing regional integration… That is why we should understand the three
main common features of Latin America: football (soccer for you Americans), revolutions and…
the regional organisations. Seriously, we’re not kidding: In the last few decades there have been so
many regional organisations that it is almost impossible to know what goals each of them
have, besides, obviously, being an excuse for spending money on public workers, headquarters,
and travelling… UNASUR, MERCOSUR, ALBA, CARICOM, CELAC, ALADI,
the Andean Community, SICA, SELA, the Rio Group, and of course the Organization of American
States… And, the truth is, I’m sure I’ve not even
mentioned all of them… Anyway, once we know about all these organisations
we could think that Latin America is the place where people get on with each other best,
a place where it’s easy to do business among the different countries, and where governments
work together for the common good, right? Right!? Well, bad news, none of that is true… All these organisations were born with high
ideas, but we could say they all really did nothing for development and economic and political
integration. (“In Latin America new institutions are
created, but it isn’t clear what to do with the previous ones. It is an endless flight forward”. Carlos Malamud) Look, despite all the different processes
of integration, trade is strangely low among the different countries. The numbers are important here: the share
of exports inside the region hasn’t changed much, it has been around 20%, much lower than
other parts of the world. This is pretty strong evidence about how artificial
and unproductive these organisations are. We will see the details of this case, though
the word disappointment or failure would probably better describe Mercosur. But I can already tell you it is very possible
that this lack of real integration is the origin of some of the most important problems
that the region is facing. THE ETERNAL PROMISE Latin America is, dear viewers, a fantastic
region. It’s got great natural resources, it has
significant biodiversity, and its climate is varied and impressive. Many people would say that the region is one
of the most beautiful on earth. However…economically speaking, things are
not looking so great. Despite all these magnificent resources and
its great potential, the region has been left behind in terms of economic growth. Let´s compare, for example, the current richest
country in Latin America: Chile. So, I think most would agree that Chile has
done a good job in the last few decades, right? Well, despite that apparent progress, just
have a look at this chart… Now here, we have taken the richest country
in Latin America and we have compared it to South Korea, which is not the richest in Eastern
Asia. And, well, the difference is quite obvious. In the 60s, Chile was a poor country, but
far richer than South Korea… Today, well, things they are rather different. We could also look at Argentina, which once
was the richest country in Latin America (with the exception of Cuba). Now take a look at its evolution when compared
to Spain. Well, one of the causes of this lower growth
might be precisely the low trade integration and the excess protectionism and bureaucracy
that the region has always suffered from. Something like: lots of agreements, committees
and forums…but, when the rubber hits the road, there’s really nothing there. But, hold on for just a second… A few years ago a new integration project
was put in place… And this one is actually completely different
to the rest. Not only is this the first project with real
success in the region, it might also change the destiny of Latin America forever. We are talking about the Pacific Alliance. THE PACIFIC ALLIANCE In April 2011, our friends, Chile, Colombia,
Mexico and Peru formed the so-called Pacific Alliance. Its mission is to finally achieve an integration
so that goods, capital, and people could move freely around the region. All this was put in place with the idea that
it would stimulate growth, development and competitiveness in these economies. “Our countries account for 55 percent of Latin
American exports… This is not a romantic integration, a poetic
integration. It is a realistic integration before the world
and to the world. ». Alan García, former President of Peru. And so they did. Even though there is still a lot to be done,
since then, development has been… how to put it… well, significant. In only 6 years, these four countries have
removed 92% of the customs tariffs and they have set a deadline to remove the rest of
them as well. Along with this, they have simplified the
bureaucracy of customs and administration. Especially when it comes to rules about the
origin of goods. which was previously a significant burden
on the region. So, up until now, if a Colombian producer
used Peruvian suppliers, he couldn’t take advantage of the free trade agreement between
Colombia and Mexico when selling his goods to Mexico. It was crazy. But that is not the end of it. Visa requirements have also been eliminated,
so the movement of visitors has doubled. And then, and this is very important, there
have been significant advances in financial integration. These four countries have created the MILA,
the American Integrated Market, which is meant to be the largest stock market in Latin America… And there´s more: among other initiatives,
the countries in the alliance are working together in order to be known in international
markets. They have also started to share embassies
in African and Asian countries, and they have decided to negotiate all together their free
trade agreements. For example, they have already started to
do this with New Zealand, Australia, Canada and Singapore. “Australia and New Zealand Start Trade Talks
With Pacific Alliance”. Wall Street Journal. In other words, these four countries are building,
step by step, a unique market which will be rather significant. We are talking about more than 214 million
consumers here with a combined GDP which makes this alliance one of the 8 largest economies
in the world. This is an economy that represents 50% of
all exports and more than 40% of all foreign investment in Latin America. We could say that, if the Pacific Alliance
keeps it up, in a very short time, we might have to consider it the biggest power in Latin
America… But, in order to understand a bit better the
achievements they have had in only 6 years, we should look at the other large group in
the region: MERCOSUR. THE DOWNFALL OF MERCOSUR? MERCOSUR was created in 1991 by Brazil, Argentina,
Uruguay and Paraguay with the intention of creating one large integrated market. Well, these were ambitious goals… but the
advances have been much more modest. So, how about some evidence of this… Well, look: The trade among Mercosur members represents
today less than 13% of the total trade of its members. In 1995 it was almost 20%. So, rather than encouraging trade between
its members, we could say MERCOSUR has weakened them. In the last few years, MERCOSUR has become
some sort of protectionist shield rather than something which is working to integrate these
countries. “The group has become little more than an
anti-gringo talking shop”. Financial Times, 2013. But, why isn’t it working? Well, mainly because there is no commitment. In theory, MERCOSUR is a process of economic
integration but there are so many exceptions and restrictions that, in the end, there is
no free movement of goods or services. MERCOSUR has become an something which is
totally ineffective… Look, a good example can be found on the border
between Argentina and Uruguay. In theory, the goods should be able to move
freely between both countries. However, the reality is very different: when
adding customs, inspections and bureaucracy, a truck from Uruguay to Argentina could be
delayed more than 24 hours… Crazy. All of this has made Uruguay formally ask
to become a member of the Pacific Alliance. And there is more, the political change in
Argentina and Brazil has led to both of their governments accepting that MERCOSUR, at least
as it is understood today, is almost completely worthless. “We’ll never reach the common market,
the custom union is completely destroyed and the free trade area is not working either. MERCOSUR is in a dying state”. Danilo Astori, Minister of Economy in Uruguay. That is why Macri has decided to become closer
to the Pacific Alliance and look for ties between both processes of integration. The question is: Will the Pacific Alliance
create a change in MERCOSUR? If it does that would be great news for the
whole region. THE PACIFIC PUMAS Well, now we have to ask: Why is the Pacific
Alliance, unlike the rest of organisations, the only one that seems to be working? Maybe it has to do with the so-called Pacific
Pumas: Chile, Peru, Colombia and Mexico. These countries have been the most dynamic
economies in Latin America, and they share the same vision… They all agree: in order to grow and develop,
they have to produce and do business with the rest of the world. And this is why, according to the World Bank,
these pumas are the countries where it is easiest to do business, or where more trade
agreements are signed with the rest of the world. Anyway, the Pacific Alliance represents one
of the best opportunities for Latin America to be in a position to become the talk of
the town. We might even be witnessing the birth of a
great economic power… But now it is your turn: Do you think Latin
America has to bet on these processes of integration? Leave your opinion on the comments below as
well as in this quick poll. Also don’t forget to subscribe to our channel
for brand new videos every Monday and Thursday. Also, don’t forget to check out our friends
at the Reconsider Media Podcast – they provided the vocals in this episode that were not mine! And as always, thanks for watching!

100 thoughts on “Is the PACIFIC ALLIANCE a New Powerhouse? – VisualPolitik EN

  1. Hey Simon i love this channel can u do a vid on my country Guyana can u talk abt our political structure we have major corruption in our government over here i would really appreciate if you n your team can highlight sum of the problems with our political structure n policies. … thanks alot keep up the gr8 job #staywoke #peace

  2. I've spent a lot of time in Latin America, I know they are very good stealing, drinking, drug taking, sleeping during the day time, murdering each other, eating fried food, living behind high walls to keep the thugs and thieves out, gossipping about each other, jealousy, living in house that leak's water and the has paint pealing off the walls and windows.

    Driving their cars fast and dangerously, borrowing money off of friends and family and not paying it back, playing music loud anytime of the night or day, not paying their bills, littering the streets, graffiti, joining criminal gangs, oh, and football.

    No wonder their economies aren't growing

  3. The coup that occurred in Brazil in 2016 really blown our future away. We are regressing to old policies that only benefit people that are already rich, which money come from extraction and agriculture. They are cutting investments on the research department of public universities and selling big chunks of the Amazon forest to foreign mining companies. Everybody who want to live in a country that is not a 80's distopia is leaving Brazil. It's sad cause we have so much potencial, but our society is a mess.

  4. When i see the comments section of this video this video has the most peaceful comments than other videos that i saw from this channel

  5. the importance of this organizations relies and guarantees the sovereignity (sorry if the word doesnt exist) of each country. If you are not from a third world country you dont get why being sovereign is so important but it is. We had a hundred years being destroyed. Of course now new problems have arisen with trying to get the power back like super high corruption and how to fight the oil crisis, but this organizations are super important. The relation between countries is what we need here. To learn how to wrok together and improve by ourselves for ourselves. Thats what we want.

  6. Outstanding video — very informative (especially that I live in a PA country — Mexico). super production values, outstanding narrative, and, as usual, Simon's impeccable delivery.

  7. As a native brasilian living 100KM from the uruguaian border… i can tell you that Mercosul was boud to fail from the bening…the only real thing it really acomplished is the free moviment of people betwin the participants.

  8. On Chile I think you could bet, but I'm don't see a thing that Peru, Colombia and Mexico could do better than Brazil alone. Don't know if the PA is really that good. Time will tell it.

  9. I see that the economy of my country Paraguay will fail in 10 or 15 years. It's make me sad that we are so lonely in the midle of southamerica, brazil see us like a shit country, and dont want to do trade with us. Arg they sre okey with us coz they have pity for the great war. Its still hurt me that we no gonna go to Russia 2018 lol

  10. Amazing videos. Your analisys are so accurate at least on Colombia's politics your point of view is extremely precise. Congratulations and thank you for your balanced and fair analisys of Colombia's affairs.

  11. Comparing anything to South Korea and concluding that its not progressing is idiotic. South Korea has risen with 10% gdp growth for half century. Very few countries like the Asian 4 can compare to it.

  12. All political organizations/ integrations are mucked up, and that's forever. Plus, economic growth is not a good indication of goodness. It could just as well be an indicator of ecological devastation or genocide of poor people. Pacific Alliance is mucked up too. Instead of alliances, people need freedom to trade without gov't or alliance interference. Read Breakdown of Nations by L. Kohr.

  13. Awesome video! However Caricom isn't really apart of Latin America. It's made up of mostly English-speaking Caribbean countries.

  14. Well, Simon, as you are from the Czech Republic you know how beautiful it is to be able to just walk across a border without ever even noticing that you did so.

    I think that a happy workforce is automatically a better workforce and just having the possibility to move around freely is so much worth to the people.

    Of course there are also direct advantages on the economy, coming from Germany I understand the importance of exports and imports very well, and also the ease of putting a company in a strategically better place makes a big difference for companies.

    If done correctly, open borders are only for the better, and have no disadvantages at all. But even if not done 100% correctly, like we do in the EU, the pros still outweigh the cons.

    Great Video, like always.

    Cheers, Christian

  15. I hope they succeed but when I hear of labels like "Pacific Pumas" I just know that they can never compare to the "Asian Tigers" because these countries have a lot of violence and corruption. I hope that with prosperity these things will die off but you can only have so much prosperity if large parts of your country are dangerous and if politicians are corrupt.

  16. Drugs crime and corruption rules the land not to mention it's colonial past and racial pecking order. A lot of social issues to address before setting ambitious goals.

  17. Hi Simon, I liked the video as always, and as Brazilian the topic really interests me. Besides what has been said about the geography issues, one point that has been raised is that countries compete against each other in their export markets, and have little complementarities between each others' industries. Also, all countries are low on savings, and have rather unstable currencies – which adds up to the challenge of building physical infrastructure and other investments that would bring latin american economies closer together. Do you think better business environment is the key, or somenthing else is needed?
    P.s.:Looking forward to a Brazil episode! 😉

  18. Look, Globalization, like every economic system, has its problems. However, we shouldn't overlook its successes. Global poverty has had a 25% decrease since 1990. With everyone online and the ability to fly around the world available to most, the world is closer than ever. Like it or not, we need globalization to sell off excess goods. Without it, we could have another great depression. When something doesn't work entirely, you don't tear it down completely, you work from inside the system to fix it.

  19. Tnxs so much. Very educational. I’ve learnt so much from your videos. It’s surprising that the UK is leaving the Eurozone, when there are benefits to closer cooperation.

  20. To be fair Chile did have a military dictatorship (thanks USA) from 1979-1990 so our economic development was significantly stifled during that time!

  21. I'm not totally sold that liberalism and free trade enhance the lives of the PEOPLE of these countries. So far, the empirical examples point to an increase of the inequality and impoverishment. Even the IMF has recognized that.
    Time will tell.
    Love the videos!

  22. In the 1960s Chile was not a poor country by Latin American standards. It has always had a vibrant middle class. That is until the turmoil of the Allende government which led to the 1973 CIA coup that resulted in unnecessary bloodshed and repression. Chile has rebounded on it's own terms quite well.

  23. Like you said, with changes in government in Brazil and Argentina, MERCOSUR is quickly evolving from a protectionist common market into a more free trade oriented place. A FTA with the EU is imminent, and negotiations of a FTAs with China and the Pacific Alliance are nearing fruition. They also have an FTA with Israel, and are opening more dialogue up with the Pacific Alliance in order to work on harmonization and making MERCOSUR more like the Pacific Alliance.

  24. They need more trade! Protectionism is killing them! And their government should be making trade and transportation easier!!!

  25. Very interesting point of view, I think that a lot has been done. Nevertheless, these countries still need to create more industries from within. We have a lot of cooper and lithium, we should be building the future electric car batteries for the future.

  26. The Pacific Alliance (PA) can be the plug to the US. I would like to see Panama (though they belong to SICA) join the alliance as well as a reformed Ecuador. I think the success of the Pacific Alliance could lead to the eventual reformation of Latin America as a whole from Mexico down to South America. If they do this correctly and make continual progress, you could see the economic equivalent of India being formed right on the border of the US! I don’t know if Brazil and Argentina will join up because this is more of a Mexico (and US) led alliance and they do not border the Pacific.

    I think you will see the PA, SICA, and MERCOSUR converge along similar lines of economic development led by the success of the PA. Ultimately, the goal is to see Mexico linking South America to NAFTA in order to complete the long ambitious Free Tree Area of the Americas. I think this convergence can happen with the end of Bolivar revolution in South America and the full acceptance of the PUMA model of economic development.

  27. All of the American states have questionable relations with their neighbors, and had war with each other at various times. That includes the USA.

  28. I hope they succeed, however so long as the US drug war rages, and funds the cartels in Mexico and Colombia, I think they'll have a very difficult time of it. Starve the cartels, reduce the violence, increase the stability of the region, and yeah, I could see a new powerhouse, and if you were to include Panama for the canal, they would definitely have a strong chance at being a major power in the 21st century

  29. Well ya It makes sense for there to be a pacific and Atlantic alliance. Goods travel by sea much more easily than over mountains and across borders.

    As a Canadian I can say the Trans Pacific partnership has been written without any kind of public consultation here. So I don't trust it. If it was good for us then it would be a transparent deal. It is not that at all. Trump and Bernie were right to say no to TPP

  30. Since im from latin america, i dont believe that we will become a super power bcs every time we had the change to change something we fuc*** everything

  31. The truth is Brazil is a bitch , yesterday i've try to import auto-parts from Chile , i had to pay 70% of taxes … for real , to send the machine back to Chile , almost none taxes . That's shameful .
    Brazil consists in 50% of South America population , witch could be so much more prosper if doesnt stand up such barriers .

  32. 2 points. Better use PPP, no? Second, comparing with South Korea is not fair. It's the best catching up experience in the world.

  33. Simon, please comment something about FORO DE SAO PAULO, a South American agreement of left politicians to instaure communism in latin america. Greetings.

  34. Got to love when these government bureaucracies band together to create bureaucracies to eliminate bureaucracies! 😂

  35. A Mexico le conviene grandemente tener un comercio desarrollado con Latiamerica por motivos estratégicos, o sea como un plan B en caso de cualquier eventualidad (tragedia) y también para tener un “arma de presión” para negociar con USSA…..¿Que pasaría si ellos entran en guerra generalizada con otra potencia militar? y su economía se paraliza ¿Donde quedaría Mexico?…..por que al resto de Latinoamérica no le afectaria tan grandemente.
    PS. Por supuesto si AMLO es inteligente (como se anuncia) y está bien asesorado.

  36. Once again, your musical choices are obnoxiously loud and cringe-inducing. The selections just don’t make sense with the content either. Otherwise, I do love your videos and the subject matter. Gracias! 👍🏼

  37. If a country is on America's shit list, it will end up on the economic south end of the spectrum indefinitely!! Its a big part of repression which means keep them down so we can stay up.
    Not the humane way of looking at things from a phsychological level which is – I help you, you help me, and we can all prosper in this world together. We here in the US seem to have the notion that other's happiness is NOT tied to our own. For some this may be very true but as the values of humanity change, so will the outcome. Help your neighbor so that someday he may help himself, and maybe, you!!

  38. From Mexico all the way down to Chile… all Latin American nations must UNITE!!! This is to include all of the Caribbean countries and territories as well. If they want to be in the coalition, then so be it! All of Latin America, Mexico and Caribbean islands are getting screwed by everyone else. These people need to get together and prosper together. Of all of the Western Hemisphere, only South/Central America is divided! Canada has the north. USA has its sea-to-shining-sea territory. Mexico was hacked up and South and Central America divided in how many separate provinces???

  39. LATAM, partially owned by the family of the facist president of chile, the last M is for MONOPOLY … go to FaceBook, and you will see 90% of responses to this airline's posting are NEGATIVE … Latin American political/social organizations are made to give "prominent" families kids cozy jobs -the same last names keep cropping up, as they travel widely within the region and internationally, stay in hotels of rename, eat at the most exclusive restaurants, and are chauffeured around. … OAS, which is mainly funded by the USA for many decades, has never done anything of significance that is not write letters to governments – latest one is the Declaration of Lima, regarding the illegitimacy of Venezuela's second term for Maduro, document which the dictator used to clean his ass. In the early 2000's it sent a military force to calm the troubled nation of Haiti … the mission went so bad the Brazilian Commander committed suicide …

  40. Latin America will always be poor until the culture of corruption inherent in their culture is changed. It can happen but it will be extremely difficult and time consuming.

  41. if you talk about number you are right , but is it really having cities full of bull..it , lights and shops means rich , that is actually the problem . People already have enough they need , but some economist need more and later they need to go to space cause we can't stop growing.

  42. The simple answer is that there should be no borders in the world but just one unified earth so all can benefit and grow.

  43. You should discuss more Brazil in this channel. I heard more about Argentina than Brazil in your videos. Brazil has a 200M+ population, largest economy in LATAM, 8th in the world and a LOT going on at the moment…

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