The Strategy of the Pacific Alliance

Latin America's New Stars

The Pacific Alliance (Alianza del Pacífico) was founded June 6, 2012 in the Northern Chilean city of Antofagasta. So far, Chile, Peru, Columbia and Mexico are its members; Costa Rica is going through the procedures for admission, with Panama soon to follow. Other Latin American countries could also join. The Pacific Alliance (PA) already accounts for nearly one-third of Latin America's gross domestic product. The alliance relies on aggressive free trade and recently decided to remove all tariff barriers between member states, which would make it eighth in the world's economies, according to a recent analysis of the German Institute of Global and Area Studies (GIGA).[1] Last year its members received 41 percent of the foreign investments in the region and accounted for 50 percent of Latin American and Caribbean exports, with its trade focus on the Pacific region, particularly Eastern Asia. Business circles are excited about the alliance. A recent Deutsche Bank Research publication (2013) championed the Alliance countries as "Latin America’s new stars."

Germany with Observer Status

Not exclusively, but particularly for economic reasons, numerous countries are becoming close with the PA and have obtained observer status. These include not only seven more Latin American countries, but five East Asian - Pacific nations, along with quite a few European countries, as well as the USA and Canada. All of these countries, with the exception of China, are within the western alliance system. This month, Germany obtained observer status. The PA was one of the themes of this year's "Latin America Day" (4 - 5 November), which is the most important symposium held by the Lateinamerika-Verein foreign trade association. Foreign Minister Westerwelle held informal talks with the foreign ministers of Chile and Columbia, who both spoke at the symposium. Both ministers "welcomed German interest in the Latin American alliance," declared the German Foreign Ministry.[2] The Lateinamerika-Verein supports the development of German business contacts to the PA. From the point of view of German companies, it is convenient that all four of the Alliance member countries have entered free trade agreements with not only the USA but also with the EU.[3]

From the Atlantic to the Pacific

Beyond business opportunities German companies hope to have, the PA is also generating tension - at various levels. For example, Brazil sees its previous standing threatened. Whereas Brazil's economic alliance, the South American Mercosur, is making little progress either in continental or in global trade, the PA is rapidly expanding. Until recently, Brazil had been the most attractive business location on the subcontinent for outside companies. The PA threatens to lure future investments away. The PA has a much more dynamic economic growth than its Brazilian counterpart, which is feeding apprehensions of a loss of influence in Brasilia. This is also linked to the current global policy shifts. "Throughout previous decades, the Atlantic coast of the continent had particularly prospered," according to a press article referring to the trans-Atlantic era; however with China's rise, trade primarily with the People's Republic of China has boomed, forming "a new growth pivot" around the countries along the Latin American Pacific coast.[4]

Two Visions

The tension between the PA and the Venezuela-inspired ALBA alliance is having an even stronger impact. The PA offers "the US government new options to promote its free trade agenda in Latin America," according to the GIGA analysis. These are diametrically opposed to those of ALBA. At the end of July, the president of the ALBA member nation Ecuador, Rafael Correa, explained that there are "two opposing visions of the world: neoliberalism and free trade versus those that believe in socialism and the guarantee of rights; those that believe not in free trade zones but zones free of hunger and free of poverty." A few days later, the Foro de São Paulo, a left-wing conference, also took a stand concerning that new international alliance. It described it as a project "inspired by extraregional powers" with "the objective to fracture and sabotage regional integration." A minister of ALBA member Bolivia declared last summer that "the strategy of the Pacific Alliance" is "not just commercial," it is more "a political and military strategy [seeking] to reinstall the Washington Consensus."[5] The "Washington Consensus" is the designation of a bundle of neo-liberal measures in line with an outdated western hegemony.

The Pacific Century

Beyond these new Latin American tensions, the Pacific Alliance, with which Germany is developing ever closer cooperation, is helping set the stage for the great 21st Century conflict constellation. in 2011, because of China's incessantly growing strength, Washington officially declared a "Pacific Century" and is preparing for a comprehensive power struggle against the People's Republic of China.[6] This includes efforts to establish an alliance of nations throughout the Pacific, which is oriented - at least the economic, but in numerous cases, also the military cooperation - on North America's powerful transatlantic alliance with Western Europe during the cold war. The USA is also participating in efforts to establish a Trans Pacific Partnership (TPP), in which some of the Southeast Asian nations, Australia and New Zealand, Canada as well as Chile, Peru and Mexico are integrated. The Pacific Alliance, directed toward the Asia-Pacific realm, is oriented along these same lines and seeks to include other Latin American countries in its new alliance structures. The PA can be seen "as part of the political and economic dynamics" evolving in the Asia-Pacific region as part of "the great power competition between China and the United States," writes the GIGA.[7] Cooperation with the Pacific Alliance is taking Germany a step further into the power rivalry - on the side of the Old West.[8]

[1] Detlef Nolte, Leslie Wehner: The Pacific Alliance Casts Its Cloud over Latin America; GIGA Focus International Edition Number 8/2013
[2] Gemeinsame Werte mit Lateinamerika; www.auswaertiges-amt.de 05.11.2013
[3] see also Ein blutiger Meilenstein and Ein strategisches Gegengewicht
[4] Die Pazifik-Allianz bringt Brasilien ins Schwitzen; www.nzz.ch 10.09.2013
[5] Detlef Nolte, Leslie Wehner: The Pacific Alliance Casts Its Cloud over Latin America; GIGA Focus International Edition Number 8/2013
[6] see also Das pazifische Jahrhundert, Die Pax Pacifica (I), Die Pax Pacifica (II) and Die Pax Pacifica (III)
[7] Detlef Nolte, Leslie Wehner: The Pacific Alliance Casts Its Cloud over Latin America; GIGA Focus International Edition Number 8/2013
[8] see also The Economic NATO and A Ring of Fire Around China (II)