On May 23, Chile, Colombia, Peru and Mexico, the four founding members of the Pacific Alliance, will meet in Cali, Colombia for their seventh presidential summit in just two years. They will be joined by nine observing nations: Canada, Costa Rica, Guatemala and Uruguay from the Western Hemisphere, as well as Australia, Japan, New Zealand, and Spain.
The rapid progress of the Alliance since its launching in Lima, Peru in April 2011 stands in stark contrast to current global trade initiatives. Despite the victory of Brazilian Roberto Azevedo to head the World Trade Organization, the Doha Round of trade talks remain on life support, with little expectation negotiations will be completed any time soon.
Many trade deals involving Latin America remain at an impasse as well - witness Mercosur's long-stalled pact with the European Union. But the results-oriented nature of the Alliance has generated the expectation that this initiative will be more successful than the existing, and numerous attempts at Latin American regional integration that have preceded it.
The new alliance leverages the geographic position of each of its members to more effectively integrate their nations into the new economy of the Pacific, while positioning them as the nexus between Asia and the other economies of Latin America.
In pursuing this goal, the shared commitment of the Pacific Alliance nations to free markets distinguishes them from nations such as Argentina and Venezuela, potentially attractive markets, but lacking sufficient respect for private property and the rule of law to facilitate the investment of plentiful dollars in commercial transactions and capital flows that immersion in the new Pacific economy implies.
At a functional level, the Alliance has followed practical steps to achieve sensible goals. The formation of the "Integrated Latin American Market" (MILA) via the May 2011 linking of the Chilean, Colombian, and Peruvian stock exchanges was an important enabler of the capitalization of the new block, ensuring that resources could cheaply and transparently flow to where they are seen to be most effective, with confidence that they can be withdrawn as needed.
Given the shared interest of Alliance members in selling more goods to Asia, the organization's export strategy includes the coordination of export promotion organizations of each member country: ProChile, ProExport (Colombia), ProMexico, and PromPeru, to include a shared consular office in Shanghai, and plans for joint market research, representations at trade fairs, and even joint trade missions to Asia.
The future of the alliance is bolstered by the domestic political imperatives of its members. Mexico's participation, for example, allows the Peña Nieto administration to expand its agenda from the "war against the cartels," while inserting the nation into a regional leadership role independent of the United States. For the Santos government in Colombia, the Alliance links Colombia to leading regional economies which contrast with its "Bolivarian socialist" neighbors.
For the business-oriented Piñera administration in Chile, the Alliance is an attractive legacy consistent with an ever expanding commercial state policy.
The Alliance has already passed one of the greatest tests that has confronted Latin American integration organizations - maintaining momentum through changes in the ideologies of elected governments.
In Peru, President Humala has continued his countries support of the Alliance despite that the initiative began during his predecessor, Alan Garcia.
The greatest challenge for the Pacific Alliance is living up to expectations. Doing so will require the realization of its potential with tangible developments. The integration of Mexico into the MILA and the possible ascension of Costa Rica to full Alliance membership are examples of this. Such successes would also set the stage for the full incorporation of new members like Panama into the Alliance at the next summit, expected later this year.
The Pacific Alliance will be tempted by success to go down erroneous paths-the expansion of membership by countries which do not fully share its strong institutions or its commitment to free markets and the rule of law. Brazil's acceptance of Venezuela into the MERCSUR serves as an example of what not to do. The Alliance may be also tempted to move beyond its limited objectives into pursuing an unworkable common political platform. Though its founding members are adamant that this agreement is not political, we have yet to see what challenges are held in store as new members are brought into this agreement.
But for now, however, this very positive initiative is simply bringing innovation, new unity and strength to the geography that has been called the "backbone" of Latin America, highlighting the bold initiatives many countries in the region are taking on their own to compete globally.