Latin America: Pacific Alliance Closes In On Complete Tariff Elimination
30 August 2013
Posted by: Author: Mike Godfrey
Author: Mike Godfrey
Following a recent meeting of trade ministers in Mexico, the Pacific Alliance (PA) trade bloc, comprising Chile, Peru, Colombia and Mexico, has stated it has finalized negotiations that will lead to an agreement to zero-rate all trade tariffs between the four countries.
The PA, formed in June 2012, brings together four of Latin America's countries that account for 50 percent of the region's total exports and more than one-third of its gross domestic product. A key requirement in joining the PA is to have free trade agreements with all existing member states. Costa Rica will join the group later this year, and Panama is also expected to become a full PA member in due course.
According to statements made after the Mexican meeting, tariffs will be eliminated from 92 percent of goods traded between PA member countries when the treaty enters into force. Most of the remaining tariffs will disappear within a few years, leaving only import duties on certain agricultural products, representing a mere 1.4 percent of their total trade, to be cancelled through a further, longer-term agreement.
It is expected that the leaders of the four countries will set a date later in 2013 for signature of the new treaty, to be followed by its ratification as soon as possible.
The PA countries have also declared their commitment to implement automatic tax and financial information exchange within the next six months, and it has been agreed that Mexico is to be accepted, probably by the end of this year, as a member of the Latin American Integrated Market, which currently consists of the stock markets of Colombia, Peru and Chile.