The Pacific Alliance in Search for a Financial Integration: So Close and Yet so Far

Abstract

This paper develops an analysis of how macro-economic convergence among Mexico, Colombia, Peru and Chile has translated into a non-intentional institutional and constitutional similar order, in areas as important as fiscal and monetary stability. This current reality opens many possibilities for a deep financial integration and regulatory cooperation, which are aspects not sufficiently reflected in the Treaty and the additional Protocol. In fact, these instruments have followed the standard of previous Free Trade Agreements (FTAs) under the NAFTA model on financial services treatment, which does not fit adequately with the objective of creating a free trade zone based on the free movement of capital and financial services. An example of this reality is the timid development of mutual recognition of financial service authorizations in FTAs, contrasting the technical agenda of future developments in the Pacific Alliance. In that context, this paper offer some specific proposals for the peculiar institutional construction of the Pacific Alliance and regulatory cooperation (based on the soft law experience of partners and the levels of convergence already obtained) and to review eventual consistency problems between financial integration and other international commitments of partners.