REGIONAL INTEGRATION IN

LATIN AMERICA

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REGIONAL INTEGRATION INLATIN AMERICA: DYNAMICSOF THE PACIFIC ALLIANCE

EDITED BY

MÓNICA BLANCO-JIMENEZ ANDJESÚS CRUZ ÁLVAREZUniversidad Autónoma Ýe Nuevo León

United Kingdom � North America � Japan � India � Malaysia � China

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First edition 2019

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Contents

About the Contributors vii

Chapter 1 Pacific Alliance: Political, Economic, and CommercialImplicationsMónica Blanco-Jiménez, Georgina Parra-Irineo,Nayra González-González and Arturo Tavizon-Salazar 1

Chapter 2 Improving the Competitiveness of the Pacific AllianceCountriesLuis E. Ibarra-Morales, Mónica Blanco-Jiménez andJuan Patricio Galindo Mora 13

Chapter 3 Automotive Industry: Competitive Strategy andChallenges in the Pacific Alliance (Mexico, Chile,Colombia, and Peru)Jesus Cruz Alvarez, Mónica Blanco-Jiménez and Sergio Guerra-Moya 29

Chapter 4 Financial and Economic Convergence inPacific Alliance CountriesMartha del Pilar Rodríguez, Klender Cortez andAlma Berenice Méndez 45

Chapter 5 Mexico’s Challenges in CommercialIntegration with Pacific Alliance CountriesOscar Velarde-Moreno, Moisés Alarcón-Osuna andMónica Blanco-Jimenez 61

Chapter 6 Leadership in Latin America: Mexican CompaniesAdriana Segovia-Romo, Joel Mendoza-Gómez andJuan Rositas-Martínez 73

Chapter 7 Andean Organizational Culture and CitizenshipBehavior in PeruMaría Mayela Terán-Cázares, Abel Partida-Puente, María EugeniaGarcía-de-la-Peña and Amparo Guadalupe Espinosa-Domínguez 89

Chapter 8 SME Internationalization in Latin America:Evidence from Mexico and PeruPedro Ariza-Ricaldi, Alfonso López-Lira, andWilfredo Giraldo-Mejía 99

Chapter 9 The Role of Social Entrepreneurship andSocial Innovation in Colombia and its Implications in thePacific AllianceJohn Macías-Prada, Mario Vargas-Sáenz,Manuel Vázquez-Zacarías, and Alfonso López-Lira 113

Chapter 10 Business Ecosystems and Social Innovation:Evidence from Colombia and MexicoManuel Vázquez-Zacarías, Alfonso López-Lira,Mario Vargas-Sáenz, and John Macías-Prada 133

Chapter 11 Competitiveness in Chile’s SMEs through CSR andSustainability PracticesMario Vázquez-Maguirre and Consuelo García de la Torre 155

Chapter 12 Entrepreneurship as a Boost of Economic Growthin Mexico and ChileMario César Dávila Aguirre, Elías Alvarado Lagunas,Silvia Valeria Mejía Rodríguez and Aldahir Caballero Campbell 167

Index 177

vi Contents

About the Contributors

Mario César Dávila Aguirre holds a PhD (Business) andan MBA from EGADE Business School, TecnológicodeMonterrey. He is currently Professor ofEntrepreneurship and Innovation at Universidad deMonterrey (UDEM). His primary research lines includeentrepreneurship, social entrepreneurship, social innova-tion, and social development. He is also GeneralDirector of “Red de Empoderamiento eInnovaciónSocial A.C.” and has served as consultant to SMEs andNGOs.

Klender Cortez has a Doctorate in Business Studies fromthe University of Barcelona. He has been recognized bythe National System of Researchers Level 1 in Mexicoduring the last 12 years. Dr Cortez is currently theSecretary of Research and Innovation of the FACPYA,UANL, and has worked as a consultant. In addition, hehas more than 40 publications in book chapters andinternational arbitration journals, such as the Journal ofCleaner Production, Emerging Markets Review, andKybernetes, among others.

Jesús Cruz Álvarez is a Research Professor in the Schoolof Business at the Nuevo Leon State University, wherehe has been a faculty member since 1997. He holds aBSc in Industrial Engineering, an MSc in Quality, and aPhD in Business. He has also served in the industry indifferent executive positions in manufacturing environ-ments and is currently full-time Research Professoractively working on research projects related to businesscompetitiveness.

Alfonso López-Lira holds a PhD in BusinessAdministration from EGADE Business School. With aBachelor’s degree in Industrial and SystemsEngineering, and a Master’s degree in Quality andProductivity from Tecnológico de Monterrey, he is aleading consultant in quality management, continuousimprovement, and innovation. As a national accreditedresearcher, his research line is focused in business devel-opment through knowledge transfer and innovation;thus, several studies involving SMEs from LatinAmerica have been published. As a Graduate Professor,he lectures courses in master’s programs, doctorate semi-nars, and doctoral dissertations, Georgina Parra-Irineo,Nayra González-González Arturo Tavizon-Salazar.

Mónica Blanco-Jiménez is a Research Professor in theSchool of Business at the Nuevo León State University(UANL), where she has been a faculty member since2000. She holds a PhD in Political Science andInternational Relations Master’s degree from theSorbonne University, Paris, France. She also holds twoPost-Doctorates from the University of Texas at SanAntonio and the University of Arizona, respectively.She is currently coordinator of the PhD inAdministration and is a full-time Research Professorcurrently working on research projects related to inter-national business and administration.

Aldahir Caballero Campbell holds Bachelor’s andMaster’s degrees in International Business from theUniversidad Autonóma de Nuevo León. He also was acoordinator of a Business Incubator at the UANLBusiness School and teaches courses of InternationalFinance and Entrepreneurship in this institution. He iscurrently a PhD student in Business Administration atEGADE Business School, Tecnologico de Monterrey.

viii About the Contributors

María Mayela Terán-Cázares is a Research Professor inthe School of Business at the Nuevo Leon StateUniversity, where she has been a faculty member since1995. She has a degree in Management, a master’sdegree in Business Administration with emphasis onMarketing, and a PhD in Philosophy, with a specializa-tion in Administration. She has also worked as aConsultant and Trainer in public and private organiza-tions at a national level. She is a full-time ResearchProfessor currently working on research projects relatedto human behavior in organizations through the studyof organizational citizenship behavior and organiza-tional culture.

María Eugenia García-de-la-Peña is the Principal at theSchool of Business at the Nuevo Leon State University,where she has been a faculty member since 1980. Shehas a degree in Management, a Master’s degree inBusiness Administration with emphasis on HumanResources, and a PhD in Management and EducationalLeadership. In the field of private initiative, she hasdeveloped as a Consultant and Trainer in public and pri-vate organizations at a national level. Her research pro-jects are linked to the academic staff of Human CapitalManagement.

Consuelo García de la Torre is a full-time ResearchProfessor at EGADE Business School Monterrey, mem-ber of the SNI National Research System of Mexico(SNI1), and Researcher at the Strategic Research Groupin Social Innovation. She holds a PhD inAdministración from HEC University, Montreal,Canada, and a master’s degree in Management from theLovaina-la-Nueva en Bélgica University. Fields ofexpertise include sustainability; ethics and corporategovernance; entrepreneurship; social responsibility; con-sumer behavior; marketing strategy and internationalmarketing; social marketing; global management; indus-trial psychology; management and humanism; and inter-cultural negotiations.

About the Contributors ix

Amparo Guadalupe Espinosa-Domínguez holds aManagement master’s degree with an emphasis onHuman Resources from the Business School of the StateUniversity of Nuevo León (UANL). She has been a full-time Professor for over 19 years. She is a leader of theacademic staff of Human Capital Management and alsoa founding partner of Evolution Operadora, a consultingfirm focused on coaching, training, and counseling.

Martha del Pilar Rodriguez holds a doctorate inBusiness Studies at the University of Barcelona. She hasbeen recognized by the National System of ResearchersLevel 1 in Mexico during the last 12 years. DrRodriguez is currently leader of Applied Research inFinance and Economics. She has worked as aConsultant. In addition, she has more than 40 publica-tions in book chapters and international arbitrationjournals such as the Journal of Cleaner Production,Emerging Markets Review and Kybernetes, amongothers.

Wilfredo Giraldo-Mejía is the Director of LatinAmerican Operations for ACBSP. He is also theDirector of the Business Quality Institute at San Martinde Porres University, whose mission is to reinforce link-age between university and industry by providing ser-vices to companies to improve its management inmarketing, operations, human resources, and adminis-tration. He is also conducting projects in fields of socialresponsibility and environmental management. Giraldostudied Industrial Engineering at the NationalUniversity of Engineering. He holds a Master’s degreein Business Administration from the Applied SciencePeruvian University Business School and a PhD inAccounting and Finance from the Graduate School ofSan Martin de Porres University, Lima, Peru.

x About the Contributors

Joel Mendoza-Gómez is a faculty for the doctoral pro-gram of the Business School at the UniversidadAutónoma de Nuevo Leon (UANL) and a certifiedResearcher by the National System of Researchers Level1. Dr Mendoza also serves as academic coordinator forthe MBA program (UANL). His current research areais teamwork and he has published many articles andbooks. He obtained his bachelor degree in Economicsand has an MBA (UANL). He received his PhD inManagement from the Instituto Tecnológico deMonterrey (ITESM).

Nayra González-González holds a Human Resourcesmaster’s degree from the State University of NuevoLeón (UANL), where she is a Researcher and a full-time Professor since 2009. She currently serves as man-agement coordinator at the Graduate School of Businessand has worked in different executive positions inhuman resources and management areas. She has anAcademic Certification by ANFECA and is the leaderof the Academic Group “Human Development andStrategic Planning in Organizations.”

Georgina Parra-Irineo is a full-time Professor andResearcher at the Universidad Estatal de Sonora in SanLuis R.C., Sonora, México, with more than 20 years ofexperience in business administration in the private sec-tor. She has a master’s degree in Administration inInternational Business and a PhD in Philosophy, with aspecialization in Administration from the UniversidadAutonoma de Nuevo Leon, México.

About the Contributors xi

Elías Alvarado Lagunas was awarded a Doctorate inSocial Sciences with mention summa cum laude inDecember 2013 from the Universidad Autonóma deNuevo Leon (UANL). He is currently working as aResearch Professor at the School of Public Accountingand Administration of UANL, where he teaches coursesin Statistics, Fundamentals of Economics, Economy ofthe Country and Mexican Financial System, FinancialMathematics and Business Valuation. He is a memberof the National System of Researchers (SNI � Level C).

Mario Vázquez Maguirre holds a PhD (Business) fromEGADE Business School, Tecnológico de Monterrey,and an MSc (Economics and Public Policy) at EGAP,Tecnológico de Monterrey. He is currently a Professorof Entrepreneurship, Sustainability, and CorporateSocial Responsibility at Universidad de Monterrey(UDEM). His primary research lines include socialentrepreneurship, social enterprises and social develop-ment, humanistic management, and sustainability. Hehas worked in corporations such as BBVA and UPS,and he has served as consultant to SMEs and NGOs.

Juan Rositas-Martínez is an economist (UANL); he hascompleted his MBA (ITESM), with a Master’s inEconometrics and TQM diploma from Yokohama,Japan. PLS-Smart and SEM Analytic Tehniquesdiploma from Georgia State University, ScientificResearch Writing Texas A&M University, and a PhD inManagement (UANL). He started his professionalcareer in FEMSA, and was a consultant in ITESM &INAP in the educational and industrial environment. Hehas authored research papers related to economics, qual-ity and talent development, recognition S.N.I. LevelI and PRODEP Profile, he also has been responsible ofthe Consolidated Academic Group “OrganizationalInnovations” during the last 12 years.

xii About the Contributors

Patricio Galindo Mora is a Research Professor in theSchool of Business at the Nuevo Leon State University,where he has been a faculty member since 1988. Heholds a BSc in Business Administration, an MSc inBusiness Administration, and a PhD in Administration.He worked, for 30 years, in the electrical industry in dif-ferent executive positions and currently is a full-timeResearch Professor actively working on research projectsrelated to business competitiveness.

Luis Enrique Ibarra Morales is a Research Professor inthe Faculty of Administration at the Sonora StateUniversity where he has been a member since 2001. Heholds a BSc. in Industrial Systems Engineering, a MSc.in Business Administration, and a PhD inAdministration. He also served in different positions inthe government. Currently, he is a full-time ResearchProfessor in Business Administration and a leader ofresearch projects in quality and competitiveness of smalland medium enterprises.

Oscar Elí Velarde Moreno is a Research Professor in theSchool of Economical Sciences at the UniversidadAutónoma de Sinaloa, where he has been a facultymember since 2017. He holds a Bachelor’s degree inInternational Relationships, a master’s in InternationalBusiness, and a PhD in Administration. He also servedin the industry in different executive positions on inter-national commerce, and he is currently full-timeResearch Professor actively working on research projectsrelated to international business.

About the Contributors xiii

Sergio Guerra-Moya is a Research Professor in theSchool of Business at the Nuevo Leon State University,where he has been a faculty member since 1987. Heholds a BSc in Mechanical and Electrical Engineering,MSc in Information Systems and Operations Research,and PhD in Business. He also served in the industry indifferent executive positions in design, manufacturing,and administration and has been advisor in differentcompanies. He is currently full-time Research Professoractively working on research projects related to interna-tional business operation.

Moises Alejandro Alarcón Osuna has a PhD inEconomics � Administrative Sciences from theUniversity of Guadalajara and is a member of theNational System of Researchers of CONACYT,attached to the Autonomous University of Sinaloa inthe Faculty of Economics and Social Sciences. He cur-rently serves as Professor and Researcher. His lines ofresearch are in “Studies on the SME” and“Technological Change.”

John Macías-Prada is a Sociologist and PoliticalScientist, Professor-Researcher at the School ofManagement of EAFIT University (Colombia). Heholds a PhD in Administration from EAFIT Universityand a PhD in Organizational Studies from theAutonomous Metropolitan University (UAM) ofMexico. He has worked as an Advisor on entrepreneur-ship, innovation, and citizenship issues in various publicinitiatives in the city of Medellín. His main researchinterests are in the area of social entrepreneurship, socialinnovation, social enterprises, civic education, and pub-lic policies for the training of young people.

xiv About the Contributors

Abel Partida Puente is a Research Professor in the Schoolof Business at the Nuevo Leon State University, where hehas been a faculty member since 1991. He has a degree inComputer Science, a master’s degree in BusinessAdministration with emphasis on Marketing, and a PhDin Philosophy, with a specialization in Administration. Hehas also worked in the commercial and services industry indifferent executive positions in information technologydevelopment and application environments. He is a full-time Research Professor currently working on researchprojects related to knowledge management models forcompetitiveness and economic development of companies.

Pedro Ariza-Ricaldi has a Master’s in Administrationfrom the University of San Martin de Porres (USMP),enrolled in SUNEDU, Bachelor of International BusinessAdministration (USMP), Certificate of SpecializationProgram of Technology Executives of Information(ESAN), Business Process Management (ESAN), BusinessIntelligence (ESAN), Project Management in InformationTechnology (ESAN), Financial Evaluation of IT Projects(ESAN), Application of MS Project for planning decisionmaking (ESAN), Specialization in ISO 9001, Lean SixSigma at the Black Belt level (SNI-USMP). Responsiblefor the Dual Training Program (USMP), as members ofthe DualeHochschuleLatinoamerica (DHLA), Trainerof International Trainers (Basis), by the Chamber ofCommerce and Industry Peruvian German, AHK Peru,approved by the Confederation of German Chambers(DIHK), manager of the business relationship between theuniversity - company through the development of projects,researcher and teacher of the USMP. Applicant to thePHD in administration of the Autonomous University ofNuevo Leon Mexico and DBA of the USMP.

About the Contributors xv

Silvia Valeria Mejía Rodríguez holds a Bachelor’s degreein Business Administrationby Universidad Autonóma deNuevo León. She is also a co-founder of “Red deEmpoderamiento e Innovación Social A.C.” and she hasappeared as a Speaker at national events of entre-preneurship, such as ANFECA and ENACTUS.

Adriana Segovia-Romo has a PhD in Management fromthe Business School of the Nuevo Leon State University(UANL), where he has been a faculty member since1998. Dr Segovia currently is member of the MBACommittee (UANL) and has the PRODEP Profile rec-ognition and the CPA Academic Certification byANFECA. She has worked in the private sector as aConsultant. In addition, she has diverse publications inbook chapters and international arbitration journals.Her current research area is human capital.

Alma Berenice Méndez is a Research Professor at NuevoLeon State University (UANL) where she has been mem-ber since 2009. She holds a Doctorate in Accounting fromthe School of FACPYA of the UANL and has been recog-nized as candidate level by the National System ofResearchers. She has worked in the private sector.Currently, she is working at FIME as Budget andFinancial Planning Manager. She has publications in bookchapters and in international journals, such as EmergingMarkets Review, and those of Springer among others.

xvi About the Contributors

Mario Vargs-Saénz holds a PhD from UniversidadPontifica Saleciana, a Master’s degree in Business fromUniversidad EAFIT, and a Bachelor’s degree inPhilosophy from Universidad Santo Tomás. As aProfessor and Administrative Officer, he has occupiedseveral positions within Universidad EAFIT. In addi-tion, he has given lectures and conferences in numerousuniversities across the world.

Arturo Tavizon-Salazar is an experienced InternationalBusiness Director with a demonstrated history of work-ing in the higher education industry and consulting ser-vices. He is skilled in innovation technologymanagement, innovation processes, statistical modeling,and e-learning consulting, strategic negotiations, andanalytical skills. He is a strong education professionalwith a PhD focused on Management and InnovationTechnology from Universidad Autónoma de NuevoLeón and EGADE Business School, Tec De Monterrey.

Manuel Vázquez-Zacarías holds a PhD in BusinessAdministration from EGADE Business School. With abachelor’s degree in Mechanical-Electrical Engineeringfrom Tecnológico de Monterrey, he is a leading consul-tant in innovation and environmental sustainability. Heis also a nationally accredited Researcher, and hisresearch line is focused on business development throughcircular economies and innovation. As a GraduateProfessor, he lectures courses in Master’s programs, doc-torate seminars, and doctoral dissertations.

About the Contributors xvii

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Chapter 1

Pacific Alliance: Political, Economic, andCommercial ImplicationsMónica Blanco-Jiménez, Georgina Parra-Irineo,Nayra González-González and Arturo Tavizon-Salazar

AbstractThis chapter discusses the creation of the Pacific Alliance comprising fourcountries: Mexico, Chile, Peru, and Colombia. It shows that is not only a freetrade agreement between these countries but also a multidimensional regionalintegration with political, economic, and cultural perspectives. Programs andactions have been structured in a way that allows and promotes integralgrowth of Latin American citizens. For this reason, it is important to analyzein this chapter the opportunities that Alliance Pacific generates with respectto each of these three aspects. (1) Political and diplomatic implications likeeliminating visa requirements for the members, sharing some embassies, facili-tating labor mobility between these countries, and proposing the creation of ajoint parliament. (2) Economic and trade implications with a gradual elimina-tion of tariffs that will allow companies to be more competitive, creation ofdifferent government agencies in each country to support business and pro-mote intra-regional trade of goods and services, and create a joint platform topromote innovation, entrepreneurship and gender equity. Finally, (3)Cultural and educational implications, as the creation of “Student andAcademic Mobility Platform” of the Pacific Alliance with scholarships forstudents and researchers, the integration of a “Technical Education Group”to foster integration and social inclusion of children and adolescents, and thecreation of “Sports Diplomacy Program” and a “Scientific ResearchNetwork on Climate Change.” Although there are still several challenges forimprovement in the Pacific Alliance, it is an agreement that will bring stabil-ity, welfare, and development effects for the members of these countries.

Keywords: Pacific Alliance; regional integration; Mexico; Peru; Chile;Colombia; Latin America; economy; trade and culture

Regional Integration in Latin America: Dynamics of the Pacific Alliance, 1�12

Copyright r 2019 by Emerald Publishing Limited

All rights of reproduction in any form reserved

doi: 10.1108/978-1-78973-159-020191001

IntroductionThe emergence of the Pacific Alliance, comprising Mexico, Chile, Colombia,and Peru, with Costa Rica and Panama as aspirants, has a strong impact on theregional integration process in Latin America as it moves toward consolidation.The Alliance favors trade and the economy of the member countries. However,unlike many other free trade agreements, this treaty is aimed at multidimen-sional regional integration � not only economic but also social, political, cul-tural, educational, and sports cooperation � that allows integral growth ofLatin American citizens.

For this reason, the Pacific Alliance follows a model of openness with a visionof “open regionalism,” in which the majority of the four member countries haveimportant trade agreements with other countries of the world. This allows, onthe one hand, for the members to openly tackle globalization and, at the sametime, to foster a profound internal regional integration where all productive fac-tors, goods and services, labor, and capital can circulate without boundaries.This strength will enable the member countries of the Alliance to be more com-petitive in the face of the new global challenges and dynamics of the economyand international trade (Briceño Ruiz, 2013).

Another strength is that Chile, Colombia, Mexico, and Peru not only have agreat common history and cultural brotherhood because of their colonization bySpain but also have a front view of the Pacific Ocean. This provides them tohave a giant road of opportunities between them and other continents, especiallywith Asian countries.

Finally, collectively, they are the ninth-largest economy in terms of grossdomestic product (GDP). They have a market of about 222 million people,representing the fifth-largest population worldwide (Table 1.1). With an averageGDP per capita of US$ 9,000, they keep their economies growing and, collec-tively, represent 55% of Latin American exports. Therefore, this integration inthe Pacific Alliance allows the economy of these countries to be promoted,encouraged by fostering joint transactions, thereby providing opportunities forforeign investment and, above all, improving their economic indicators.

This economic growth promoted within the Pacific Alliance will produceeffects of stability, well-being, and development for the members of these coun-tries. Considering the above, the purpose of this chapter is to show the extensivelist of actions and programs generated, with their political�diplomatic as well aseconomic�commercial and cultural�educational implications for the fourmember countries of the Alliance.

Political�diplomatic Implications

Mexican foreign policy has had a change in its trade regime when it opened itsborders in the 1980s, going from trade protectionism to an open system in orderto enter the General Agreement on Tariffs and Trade (GATT) in 1986, espe-cially with the signing of the North American Free Trade Agreement. As isknown, foreign policy is the capacity of states to respond to the external

2 M. Blanco-Jiménez et al.

Table 1.1. Pacific Alliance: Economic Indicators.

MEXICO CHILE COLOMBIA PERU

Official name United Mexican States Republic of Chile Republic of Colombia Republic of Peru

Capital City Mexico City Santiago Bogotá Lima

Land area 1,972,550 km2 756,096 km2 1,141,749 km2 1,285,216 km2

Population 2017 estimate 123,675,325 17,574,003 49,587,941 32,553,697

Official language Spanish Spanish Spanish Spanish

Nominal GDP2017 estimate

US$ 1,047 trillion US$ 265,224 billion US$ 322,489 billion US$ 221,710

GDP Per Capita US$ 8,562 US$ 14,274 US$ 6,472 US$ 6,892

Political system Democratic Republic Democratic Republic Unitary Republic Democratic Republic

(1) Services 41% 74% 65% 18%

(2) Industry 17% 11% 12.2% 14%

(3) Crop/livestock N/A 3% 7% 5%

(4) Mining 7% 11% 8% 12%

(5) Other activities 35% N/A 21% 51%

Source: Elaboration by the authors based on data from IndexMundi (2017) and Alianza del Pacífico (2016a).

Pacific

Alliance:

Political,E

conomic,and

Com

mercialIm

plications3

situations in the international system; this is the reason why countries open adialogue looking for cooperation and understanding, which allows them todefend their interests internationally (Marcsak & George, 2016a, 2016b).

It should be noted that this approach by the Mexican government with itsnorthern neighbors brought a loss of leadership in the Latin American countries.Therefore, in early 2000, Mexico attempted to revert this situation and has soughtto make use of horizontal multilateralism, where regional integration is no longerlimited to cooperation and openness but it also ventures into an interaction of theeconomic and political aspects. This in turn has softened the dividing line betweenthe above aspects, and thus, political integration is a consequence thereof (Ardila& Krzywicka, 2015, p. 38; Velázquez Flores et González Cruz, 2016).

This policy of rapprochement with the Latin American and Caribbean coun-tries continues to be promoted by the current president of the United MexicanStates, Enrique Peña Nieto, who points out that the main objective is “tostrengthen the presence of Mexico in the world, so as to diversify political, trade,investment, tourism and cooperation ties” (Peña Nieto, 2017). Therefore, thePacific Alliance is an excellent means to achieve this goal; it will allow betterliaison among Chile, Colombia, Mexico, and Peru and improve its position inthe international arena, so it is natural that Mexico has been seen as a driver ofthese objectives.

As noted, the foreign policy of the Pacific Alliance countries has promoted theuse of diplomacy as a negotiating mechanism that has successfully achieved consen-sus and very important agreements, all of which have permeated the internal poli-cies in the four countries. This allows the main objectives of the Pacific Alliance tobe fulfilled, with concrete and effective actions and programs that provide short-,medium-, and long-term benefits for all citizens of these countries. It also has severalpolitical implications for the Pacific Alliance’s diplomatic agenda: the policies ofmobility among the member countries, migration, and the improvement of the qual-ity of life of individuals. These implications are as follows:

• An outstanding achievement for the foreign policy of these countries was theelimination of visas among these four countries as of November 1, 2012. Thiswill facilitate mobility of people, which in turn will strengthen tourism andthe free flow of people among the member countries (Alianza del Pacífico,2015). This elimination is particularly intended to encourage the exchange ofstudents, professors, and researchers to increase academic links.

• To reinforce a joint diplomacy that strengthens the union and integration betweenthese countries, some embassies and common consulates were established in 2013to provide the Alliance’s citizens with the necessary diplomatic services. Hence,now several of these countries share six diplomatic locations: Ghana, Vietnam,Morocco, Algeria, Azerbaijan, and the OECD’s Diplomatic Mission (FloresLiera, 2016).

• In 2012, a parliament of the Pacific Alliance was also proposed, which wasinitiated with the commencement of a plenary session of parliament, compris-ing 10 representatives from each of the four congresses to determine the future

4 M. Blanco-Jiménez et al.

functions of parliament. On July 11, 2013, the Inter-parliamentaryCommission was created with representatives of the four congresses of themember countries. Its main function is to promote the formulation of lawsfrom agreements reached by the governments of the Alliance. Therefore, thisintegration in Latin America is not only of a commercial nature but it alsoseeks political and legal integration (Informador, 2013).

• It is important to point out that in 2013, to promote concrete actions with theaim of improving some migration problems that exist among the memberstates, the program “Labor Mobility in the Pacific Alliance” was created. Forthis aspect, governments have had meetings with businessmen and nationaland international experts from the member countries of the Pacific Alliance toanalyze the implementation of labor mobility in an orderly manner, particu-larly as a development tool that can benefit both the workers and their fami-lies in the countries of origin and destination; this is known as “the triplevictory” (Insa & Espínola, 2015). Therefore, in July 2015, the Inter-Institutional Agreement on the Implementation of an InformationConsultation Mechanism with Migration Purposes to Facilitate Mobility ofPersons was created (Alianza del Pacífico, 2016b).

• Finally, improving roads and port infrastructure for greater physical intercon-nection among the countries and supporting initiatives in terms of electricaland energy interconnection is also expected.

Economic and Trade Implications

As discussed earlier, the Pacific Alliance agreement has political�diplomaticimplications that have enabled the creation of one of the largest economic andfinancial blocs in Latin America. As regards the commercial aspect, severalactions have been developed to foster a much deeper economic union, with thefollowing implications:

• Intensive negotiations were conducted so that the trade agreement facili-tates trade with a tariff reduction on most products, along with the reduc-tion of trade barriers, speeding up of dispute settlement, and facilitation oftrade in services. This in turn will accelerate import and export operationsamong the member countries. Therefore, an Additional Protocol to theFramework Agreement of the treaty (PAAM) was signed in February2014, which entered into force in 2016, laying out the necessary guidelinesfor the proper conduct of free trade, thus benefitting all parties (Alianzadel Pacífico, 2016c). This protocol of tariff reduction allows for a gradualelimination of tariffs within the next three�seven years in more than 92%of the products, with the exception of the agro industry, where taxes willbe relieved in a term of 17 years.

It should be noted that this treaty does not require a common external tar-iff like most treaties, since the PA countries continue to maintain the tariffsthey signed with other countries in each of their previous treaties. To date,they have signed approximately 76 trade agreements with other countries.

Pacific Alliance: Political, Economic, and Commercial Implications 5

• Another important point is the support provided to importing and exportingbusinessmen to facilitate business among the member countries and thus pro-mote intra-regional trade with goods and services through different govern-ment agencies of each of the four countries: Chile, Colombia, Peru, andMexico, as shown in Table 1.2.

• In addition to the support of these organizations, a cooperation fund ofUS$ 1 million between the four countries was created in 2013, during theseventh summit of the Pacific Alliance; this fund will boost the incursioninto new markets and, above all, it will strengthen the alliance as an economicbloc, which will allow its optimal functioning.

• In 2012, the Business Council of the Pacific Alliance (CEAP) was created; itcomprises businessmen and representative associations of the four countries,with its main objective being the promotion of cooperation among entrepre-neurs of the Pacific Alliance and the global entrepreneurial community. A fur-ther purpose of it is proposing actions aimed at third-world markets,particularly in the Asia Pacific region, but especially giving recommendationsto governments to improve the integration process (http://www.consejoempre-sarialap.org/) (Tremolada Álvarez, 2014).

• Similarly, another important program was created in 2014 to promote entre-preneurship in the field of small and medium enterprises of the Alliance sothat they can take part in an expanded market. With these programs, theAlliance seeks to generate greater opportunities for all economic operators, pro-mote regional value chains, and, above all, improve the competitiveness of thefour countries toward other international markets (Rodríguez Minor, 2016).

• It should be noted that all these programs are being promoted with cross-cutting and interdisciplinary topics that allow for the strengthening of innova-tion, inclusion with gender equity, intellectual property, communication, andcooperation among all citizens of the member countries of the Pacific Alliance(Prado Lallande & Velázquez Flores, 2016).

• Finally, a very important aspect from the financial viewpoint has been the cre-ation of the Latin American Integrated Stock Market (MILA) in 2011, whichintegrates the stock exchanges of Chile, Colombia, and Peru, and the entry ofthe Mexican Stock Exchange in 2014. This created the largest stock market inLatin America in terms of the number of issuers and the second in terms ofcapitalization, amounting to US$ 748,196.93 as a whole in 2015 (Table 1.3).This has allowed the shares of the four stock exchanges to be bought and soldsimply through a local intermediary. With this, the four countries havequickly and effectively positioned them in global trade, attracting new mar-kets, specifically Asia (Zepeda, 2015).

Cultural�educational Implications

The objective of the Pacific Alliance seeks not only the integration of its partici-pants in the commercial and financial field but also the creation of new agree-ments for the movement of people and the development of human resources inthe educational and cultural field. This reaffirms one of the Alliance’s greatest

6 M. Blanco-Jiménez et al.

Table 1.2. Government Organizations that Promote International Trade.

ProChile Institution from the Ministry ofForeign Affairs of Chile

In charge of the promotion of exportable Chileangoods and services and contributes to the diffusionof foreign investment and promotion of tourism

http://www.prochile.gob.cl/

ProColombia Ministry of Commerce,Industry, and Tourism

In charge of promoting tourism, foreign investmentin Colombia, non-mining energy exports, and thecountry’s image

http://www.procolombia.co/

PromPerú Ministry of Foreign Trade andTourism

In charge of formulating, approving, executing, andevaluating strategies to promote exportable goodsand services, as well as domestic and receptivetourism in Peru

https://www.promperu.gob.pe/

ProMéxico Federal Government Agency In charge of coordinating strategies aimed atstrengthening Mexico’s participation in theinternational economy, supporting the exportprocess of companies established in our country,and coordinating actions aimed at attracting foreigninvestment

https://www.gob.mx/promexico

Source: Elaboration by the authors.

Pacific

Alliance:

Political,E

conomic,and

Com

mercialIm

plications7

commitments, which is collaboration in education, as education is a pillar ofdevelopment and promotes the generation of resources in focal points for thegrowth of its members as well (Elena Romero & Aguilar Bacca, 2016). Hence,the countries of the Alliance have developed several strategies such as thefollowing:

• The Student and Academic Mobility Platform of the Pacific Alliance was cre-ated in 2013; its purpose is to drive cooperation in education, which in turnwill allow to have better prepared students and teachers to increase qualitylevels in certain productive sectors. Within this platform, a StudentScholarship Program has been created to promote academic and studentmobility among the four member countries. It is intended that students, pro-fessors, and scholarship recipients can create a network of shared knowledgeamong the member countries by sharing experiences and knowledge duringtheir exchange periods. But above all, they will help create new knowledgethrough articles, publications, books, etc.

Each country contributes a minimum amount of annual scholarships forthe program, most of which are for undergraduate students and others fordoctoral students. There is also a percentage of scholarships for teachers andresearchers who have to submit their candidacy when invitations to this pro-gram are open. These scholarships last from 3 weeks to 12 months, which willbe divided reciprocally and in terms of equality between the member countries(AMEXCID, 2017). The scholarships are given within the following areas ofknowledge, regarded as strategic for the region: business, finance, interna-tional trade, public administration, political science, tourism, economics,international relations, environment and climate change, and engineering andsciences (Meade Kuribreña, 2014).

• To carry out these actions, the Pacific Alliance has a Technical EducationGroup comprising various representatives and officials from the Ministry ofPublic Education of Mexico and their counterparts from Chile, Colombia,

Table 1.3. Capitalization of Stock Exchanges of the Pacific Alliance Countries2016 (million dollars).

Country Stock Exchange Millions of dollars

Mexico Mexican Stock Exchange 350,809.55

Chile Santiago Stock Exchange 212,479.79

Colombia Colombian Stock Exchange 103,818.62

Peru Lima Stock Exchange 81,088.97

Pacific Alliance MILA

Source: Elaboration by the authors based on data from World Bank of the World Federationof Exchanges (2017).

8 M. Blanco-Jiménez et al.