Business Opportunities in the Pacific Alliance : The Economic Rise of Chile, Peru, Colombia, and Mexico

254 Pages·2017·5.78 MB·English

by  Spillan

fi
Business Opportunities in the Paci c
Alliance
“Thisbookpresentsananalysisofthemainfactorstopromoteeconomicgrowth
anddevelopmentinselectedLatinAmericancountries.”
—Arcadio A. Cerda, Dean, College of Economics & Business, Universidad de
Talca,Chile
“This book is an excellent contribution to the Latin American literature on
InternationalBusiness,especiallyintimeswhenprotectionismseemstoariseasa
challengetoglobalization.”
—Carlos E. Ruiz, Associate Professor of Management, Georgia Gwinnett
College,USA
“This book offers a timely and compelling view of the region’s economic past,
present,andfuture.”
—JohnA.Parnell,BelkChairofManagement,SchoolofBusiness,Universityof
NorthCarolinaatPembroke,USA
“As the authors convey, the Pacific Alliance opens up many oportunities for its
membercountriestocontinuetoachievegrowthandreducepovertythroughfreer
trade,inaworldthatisincreasinglymorecomplicatedanduncertain.”
—AldoDefilippi,ExecutiveDirector,AmericanChamberofCommerce,Peru
“This book is an indispensable asset to the foreign investor who seeks to do
business not just in the pioneering countries of the Pacific Alliance, but Latin
Americaasawhole.”
—JuanPabloCarrasco,President,AmericanChamberofCommerce,Guatemala
JohnE.Spillan(cid:129)NicholasVirzi
Business
Opportunities
fi
in the Paci c
Alliance
The Economic Rise of Chile, Peru, Colombia,
and Mexico
WithcontributedbyMariaAlejandraMorales
JohnE.Spillan NicholasVirzi
UniversityofNorthCarolinaat UniversidadPontificiadeSalamanca
Pembroke SantaCatarinaPinula,Guatemala
Pinehurst,NorthCarolina,USA
ISBN978-3-319-54767-1 ISBN978-3-319-54768-8(eBook)
DOI10.1007/978-3-319-54768-8
LibraryofCongressControlNumber:2017941518
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P
REFACE
Globalization of Industry and commerce has brought many benefits and
manychangesinhowgoods andservicesareexchangedacrossbordersin
the Global economy. As such we are delighted to bring you The Pacific
Alliance: How Chile, Peru, Colombia, Mexico, and Costa Rica Offer
UniqueBusiness Opportunitiesfor Both Insiders andOutsiders.
Tradeintegrationisnotnew.Infact,manycountriesinLatinAmerica
are ambitiously involved in a global network of trade arrangements and
international business activity. The existence of the MERCOSUR, the
Andean Pact, and other Free Trade Agreements (FTAs) have been active
foralongperiodoftime.ThePacificAlliance,orPAforshort,isuniquein
that it brings together 4 countries which have demonstrated significant
economicprogressandoffersmajorbenefitstothe4insidecountries.The
PAalsoofferssignificantopportunitiesforoutsiderstoparticipateintrade
andglobalbusiness withthe PA members.
The PA is different than the other FTAs in the region because it
includes other areas such as free circulation of labor, capital along with
cooperation in otherareasof businessactivity.
Because the PA includes the most stable and prosperous economies in
theregion,itcan offerbusiness andtradesituationsthatarenotavailable
in other parts of the global economy. Since the members of the PA have
substantialtradeagreementswithothercountriesoutsidetheAlliancethey
can provide a strong connection with the globalization process, trade,
foreigndirect investment(FDI), andeconomic development.
The PA is a mechanism for deepening economic connections among
thememberswhilealsorecognizingthechangingworlddynamicsthatwill
v
vi PREFACE
inevitablyaffectallcountriesthatparticipateinworldtrade.LatinAmerica
needs modernization and dynamic players who are strong enough and
flexible enough to pivot quickly to meet the needs of their own country
andthoseof the PAmembership.
The PA members have consistently demonstrated economic and poli-
tical stability while at the same time growing and developing new
approaches that are benefitting their own populations and the Alliance
itself.
Severalattributes describethe essenceof the PA.They areasfollows:
(cid:129) Innovativeapproach totrade
(cid:129) Result-orientedapproaches tocross-border activities
(cid:129) Anagreement amongpeers
(cid:129) Sharedcommercialoutlook
(cid:129) Inherentlyopen
(cid:129) A dynamicmodel forregional integration
(cid:129) Bridging agreements to Asia from which significant benefits can
result
(cid:129) Leveragingpresentagreements
So we are seeing five countries that are really the new stars in Latin
America joining forces in order to produce more opportunities for its
members and to enhance the business and quality of life for the popula-
tions thatcomprise eachmember state.
With the foregoing ideas in mind, this book is the first book on the
topic. It provides a comprehensive discussion of what the PA is, what it
does, and how it can be a strong trading entity that promotes the eco-
nomicdevelopment,employmentopportunities,andqualityof lifeforall
Latin Americans. The PA and Latin American environment is ever-chan-
gingandtherefore needsnew data analysis andanew perspective.
C
ONTENTS
1 Introduction 1
2 Theoretical Framework 29
3 The Modern EconomicHistory of Trade 41
4 Chile 73
5 Peru 89
6 Colombia 103
7 Mexico 117
8 Central America: The LogicalNext Step 129
9 Looking tothe Future 159
10 Some Final Words:Our Conclusions 195
vii
viii CONTENTS
Appendix A 219
Appendix B 237
Index 247
L F
IST OF IGURES
Fig.1.1 PacificAlliancedataasof2016 5
Graph1.1 ShareofGDPofthecountriesinPacificAlliance 6
Graph1.2 EconomicstructureofthePacificAlliance 8
Graph1.3 %ofGDPofexportsandimportsinthePacificAlliance 9
Graph1.4 ShareofGDPofthecountriesinCentralAmerica 17
Fig.1.2 StructuralEconomicDataforCentralAmerica 18
Graph1.5 EconomicstructureofCentralAmerica 19
Graph1.6 %ofGDPofexportsandimportsinCentralAmerica 20
Graph4.1 SummaryofChile’sGDPperformance2000–2015 78
Graph5.1 GrossDomesticProduct(GDP)PerCapitaGrowth
annualRateofChangeinPercentage 92
Graph6.1 GDPPerCapitaGrowthColombia(annual%) 105
Graph7.1 GDPPerCapitaGrowthMexico(annual%) 120
Graph9.1 GrowthinTradeandRealGDPintheWorld1980–2021 163
Graph9.2 GrowthinExportsandImportsandRealGDPinthe
World1980–2021 165
Graph9.3 WorldTradeVolumeandExportsandImportsofLatin
AmericaandtheCaribbean1980–2021 166
Graph9.4 EvolutionoftheTermsofTradeLatinAmericaandthe
Caribbeanvs.EmergingandDevelopingAsia1983–2021 167
Graph9.5 IndexofGlobalizationinthePacificAlliancecountries
1970–2013 175
Graph9.6 EconomicGlobalizationinthePacificAlliancecountries
1970–2013 175
Graph9.7 SocialGlobalizationinthePacificAlliancecountries
1970–2013 176
ix
x LISTOFFIGURES
Graph9.8 KOFIndexofGlobalizationinkeyAsiancountries
1970–2013 177
Graph9.9 EconomicGlobalizationinkeyAsiancountries
1970–2013 178
Graph9.10 SocialGlobalizationinkeyAsiancountries1970–2013 179
Graph9.11 PoliticalGlobalizationinkeyAsiancountries1970–2013 180
Graph9.12 CulturalproximityinkeyAsiancountriesandtheUnited
States1970–2013 180
Graph9.13 CulturalproximityinkeyAsiancountriesandthePacific
Alliancecountries1970–2013 181