Latin America stands at a critical juncture in its economic and political history. A long period of brisk growth, fueled in large part by Chinas once-unstoppable demand for commodities, has now tapered off. Since the regions most recent economic boom did not come in tandem with increased productivity or the introduction of new technologies, Latin American countries now face two alternatives: They can resign themselves to another boom-and-bust cycle orif they are forward-lookingthey can embark on a path to carry their citizens forward into sustainable prosperity through productivity gains and integrated growth.
Chile, Colombia, Mexico and Peru have opted for the latter, choosing to work as partners, rather than competitors, under the umbrella of the Pacific Alliance (PA). The four founding nations represent over 35 percent of Latin Americas GDP2, 50 percent of its total trade and attract 45 percent of its foreign investment. If they were a single country, they would stand as the worlds eighth-largest economy, with a combined GDP of more than $2 trillion.
This report outlines the advantages and challenges the Pacific Alliance faces on its journey toward economic integration. More importantly, it points out the opportunities the trade bloc offers to private companies that can both benefit from the creation of this larger market and become one of the drivers of its success provided they act decisively now.