“We can’t put the future on hold,” the CEO of Ford recently commented when asked about the sudden growth of the electric vehicle (EV) industry. The era of transportation with electric motors is a reality and is experiencing significant advances and growing acceptance worldwide. Nations from Europe, Asia, and even the United States are implementing clean energy initiatives to reduce carbon emissions and the use of fossil fuels.

At this moment, Mexico finds itself in a position of opportunity since it is experiencing a change in which the country can play an essential role in the global trend of reducing the use of automobiles that use fossil fuel as an energy source. After all, Mexico is the seventh largest vehicle manufacturer in the world. In this blog post, we will review the current situation surrounding the electric vehicle industry in Mexico and the investment opportunities that will arise from the development of electric and hybrid vehicles.

The boom of the hybrid and electric vehicle industry in Mexico

In 2022, Mexico manufactured 3,068,812 vehicles with electric technology, of which 47,079 were sold within the country (the rest were exported), representing 4.1% of the total cars sold during that year.

The fact that only 4.1% of total sales of this type of car remained in the country may seem insignificant; However, it represented an increase of 61% compared to 2020. In addition, Mexico was also the largest consumer of electric vehicles in Latin America, followed by Brazil and Colombia.

The most popular electrified vehicles in Mexico are hybrid models (cars that combine the traditional combustion system with electric batteries). However, EVs (vehicles that run 100% on an electric motor) are gaining popularity. According to the AMIA (Mexican Association of the Automotive Industry), in 2020, only 1.8% of the total registered electric cars sold were 100% electric. In 2021, that amount rose to 2.4%; this last year, it jumped to 8.8%.

This trend continues to grow, and according to the INEGI (National Institute of Statistics and Geography), by 2030, Mexico will be selling 72,655 100% electric vehicles nationwide. This will represent 2,000% more than last year’s sales. This data shows Mexico is one of the main actors in the growth of electric vehicle consumption in Latin America.

As an automobile producer, the electric vehicle industry in Mexico is ready to receive more foreign direct investment to manufacture EVs. Historically, Mexico has proven profitable and safe for investors in the automotive industry due to its workforce quality, value chain position, strategic location, and international alliances.

A global shift towards combustion with green energy

Modern consumers are demanding radical change and concrete action to protect the environment, especially concerning the automobile industry. In 2022, a record of 36.6 billion tons of carbon emissions were reached due to the use of fossil fuels. Consequently, the UN has declared a goal of reducing carbon dioxide emissions by 45% by 2030 (considering 2010 as the base year) and achieving net zero emissions by 2050.

Nations are responding to the call and taking concrete action. It is a global movement already taking its first steps in Mexico. Meanwhile, the UK aims to ban the sale of combustion vehicles by 2030. Also, by the same year, Belgium will ban cars that run on diesel and, by 2035, vehicles that use gasoline. The United States, although less ambitious in its goals to eliminate combustion vehicles, will invest in constructing a national network of 500,000 electric charging stations, allocating about 1.2 billion dollars by 2030.

According to American consultant AlixPartners, the global automotive industry plans to spend $526 billion on electric vehicles by 2026. So, what could this mean for the electric vehicle industry in Mexico?

What opportunity does Mexico have in this green revolution?

Mexico is a manufacturer par excellence. This global automotive phenomenon means that demand for electrical parts will be at an all-time high. Currently, China is the worldwide leader in manufacturing these items, but circumstances show that Mexico could become one of the leaders in global EV manufacturing.

These are the reasons:

1. Record sales in auto parts

In 2019, according to INEGI data,  manufactured automobile parts were worth $97.8 billion. The following year, Mexican auto parts production fell to $78.4 billion due to production and consumption restrictions due to the pandemic, and 2021 was the year of recovery since a value of $94.7 billion was reached. On the other hand, in 2022, Mexico broke a record by exceeding $101 billion in auto parts. This evolution is expected to continue as the electric vehicle industry in Mexico continues to grow.

2. US EV Vision 2030

Simultaneously with the infrastructure development goals mentioned above, the President of the United States plans to provide financial support to any citizen who purchases an electric vehicle. This incentive is expected to cause a significant increase in demand, which EV and auto parts manufacturers must meet. Consequently, the effect of this incentive will promote the ‘electrification’ and growth of the electric vehicle industry in Mexico. In the final analysis, the country will see substantial opportunities in manufacturing electric vehicles, original equipment parts, aftermarket, and components in general.

3. Development has already started

In 2021, several multinational companies began upgrading and expanding their facilities to support growth in electric vehicle manufacturing. For example, Ford Mexico has begun producing the Mustang Mach-E at its factory in Cuautitlán, in the state of Mexico. General Motors invested in its Ramos Arizpe plant to manufacture batteries and began preparing its land to build facilities for the EV assembly process this year.

Likewise, Volkswagen has announced investments of more than 7 million dollars for the next five years, focused on producing zero-emission vehicles. They are expected to remodel or expand their manufacturing plants in Puebla and Silao to include EV components. And finally, there is BMW in Mexico, which will begin manufacturing its iX3 electric SUV at the San Luis Potosí plant.

What are the specific manufacturing requirements in the electric vehicle industry in Mexico?

A diversity of manufacturers will be included. There are many kinds of components that EV manufacturing requires to be successful.

These are the main three:

1. Battery manufacturing: The most critical component for electric vehicles. Manufacturers seek innovative and adaptable manufacturing spaces, requiring specific safety considerations to handle batteries and their components properly.
2. Flexibility: It is necessary to create facilities that allow the manufacturer to adapt the design of its plant to remain competitive quickly. The design must consider the safety and well-being of the workforce at all stages of manufacturing until reaching final assembly.
3. Sustainable assembly: One of the challenges for this type of facility is that investors look for sustainable manufacturing plants in Mexico’s electric vehicle industry. The facilities must be suitable to operate with renewable energy and reduce polluting emissions. Likewise, the facility construction process must follow these objectives, ensuring minimal waste and environmental disruption. In many cases, LEED® certification is adopted in projects.

The electric vehicle industry in Mexico must stay in the future. The new generations of citizens and their future governments are preparing for a solid transition towards cleaner energy with the massive use of EVs. Mexico must make the most of the situation and work in a focused manner to adopt this global trend. Given the automotive industry infrastructure that it already has in place, Mexico has the potential to become one of the leading manufacturers of electric vehicles and auto parts worldwide.

Within the framework of the recent Uruguayan official visit to China, 23 cooperation agreements between Uruguay and China were signed.

Leaders Luis Lacalle Pou and Xi Jinping met on November 22, 2023, in Beijing and signed twenty-four cooperation agreements on trade, livestock, culture, and science and technology, among others.

It also agreed to elevate relations to a comprehensive strategic partnership, which allows deepening commercial exchange and agreements between Uruguay and China in other areas.

23 agreements between Uruguay and China:

Mutual legal assistance in criminal matters

Uruguay and China “will provide each other with the broadest possible legal assistance in investigations, prosecutions and judicial procedures linked to criminal matters.”

The Silk Road

Uruguay and China agreed to advance the memorandum signed in 2018, during Tabaré Vázquez’s presidency, to construct an economic and maritime Silk Road.

“Among the areas addressed include cooperation in the digital economy, tax, high seas fishing ports, advances in energy, industrial, food cooperation, and promotion on topics such as watershed planning, efficient irrigation, and the development of mini-hydroelectric plants, as well as the construction of small dams and the creation of a joint laboratory,” details a document prepared by Uruguay’s Foreign Ministry.

Antarctic Cooperation

Based on the guidelines of the Antarctic Treaty, the two countries will carry out “exchange and research activities on Antarctic matters in the spirit of cooperation and mutual assistance.”

Exchange on economic development

An agreement between Uruguay and China  seeks to promote training through scholarships and exchange on various topics, such as “macroeconomics, the Belt and Road Initiative, investment, trade, sustainable development, clean energy, digital economy, and cultural exchanges.”

Education

The number of places for Uruguayans to study in China will increase from 20 to 25, and the teaching of Chinese in Uruguay will be promoted.

Joint Laboratory in Bio-Nano-Pharma

Pharma will be created, with an investment of $279,000 by the Chinese government and the facilitation of “access to infrastructure and human resources” by Uruguay. The objective is to serve as a “platform to jointly conduct high-level research, promote the exchange and training of researchers, and encourage technology transfer to strengthen scientific and technological capacity.”

Industry, information, and communications

A new memorandum was agreed upon that establishes exchange and cooperation in “regulations and policies for innovation, industry, information, digital transformation, and communication technologies, as well as capacity development in these areas.” On the other hand, it includes “industrial improvement in the manufacturing of equipment, raw materials, light industry, biopharmaceuticals and renewable energies, electricity storage, information technologies; and cooperation in the development of policies for free zones, industrial parks, high-tech parks, cooperation zones for small and medium-sized enterprises (SMEs), innovation campuses and industrial clusters of SMEs.

Geosciences and mineral resources

An agreement between the two nations seeks to promote scientific and technical research through student exchanges and joint projects.

Five-Year Strategic Plan for agricultural cooperation

The signing of a second five-year plan of this type between Uruguay and China is “focused on strengthening collaboration in agriculture, agroindustry, and fishing. Its objectives include exchanges on agricultural policies, efficient water use, animal husbandry, plant health, capacity development, agricultural trade, scientific and technological research, dairy, fisheries, and aquaculture.”

Trade

Uruguay and China will create a working group to analyze the evolution of the trade flow “to promote its expansion and create a direct channel of consultations that allows addressing possible trade barriers and their elimination.”

Digital Economy

The agreement in this area seeks to generate “synergies between the plans, policies, regulations, norms, and standards of both countries related to the development of the digital economy, as well as the strengthening of cooperation in financial payments, smart storage, online and offline visualization, Internet of Things, big data, cloud computing, blockchain, artificial intelligence, and other associated areas.”

Likewise, this includes the commitment to advance the “digital transformation in the manufacturing industry, services, transportation, and logistics, to promote the transformation and modernization of traditional industries and green and smart development.”

Investment in “green development”

Uruguay and China agreed to encourage “companies to cooperate on investment in green development, including clean energies such as photovoltaics, wind energy, green hydrogen and solid biomass and other forms of bioenergy, such as liquid fuels and gases of biological origin. The agreement looks at the vehicle industry based on new energies such as the electric battery, the production service of intelligent charging cells and second-life batteries, disposal and recycling, as well as green finance and the construction of “green infrastructures, energy efficiency and alternatives associated with cement production.”

Cultural cooperation

Based on the collaboration agreement in the cultural and educational area, signed in 1988, “a more fluid exchange between official delegations in the cultural field, artistic groups and cultural institutions of both countries” will be sought between 2024 and 2028.

Health

A “general framework to develop cooperation in the area of health between Uruguay and China” was agreed upon and “lists in a non-exhaustive manner the following priority areas of cooperation: public health (prevention and control of infectious diseases and health promotion); medicine in the context of emergencies and disasters; telemedicine; medical investigation; maternal and child health care, and health for the elderly.

Beef protocol

The beef protocol was updated, allowing the export of beef stomachs – including tripe -. According to the National Meat Institute of Uruguay, this could imply an increase of 40 million dollars annually for the export of tripe, which, added to what is already exported, would total about 59 million dollars.

The quarantine period for livestock in agricultural establishments before slaughter was reduced from 90 to 46 days.

Sheep and goat meat protocol

The sheep and goat meat protocols were also updated, and the quarantine period was reduced from 90 to 46 days.

Sports equine protocol

The quarantine and health requirements for exporting sport horses between Uruguay and China and the health responsibilities of both countries were agreed upon.

Export of lemons

The export of lemons is added to the citrus that Uruguay exports to China.

Live aquatics for consumption

Establishes quarantine and hygiene requirements for the export of edible aquatic animals to China.

Scientific and technological cooperation between the Technical Laboratory of Uruguay (LATU) and the China Market Regulatory Administration

This agreement between Uruguay and China seeks to be the starting point for collaboration and development of joint projects, scientific production, and exchange of researchers. “It will focus on specific areas such as scientific and industrial metrology, as well as other advanced areas of metrology.”

Media, news, and audiovisual sector

Work is also underway to finalize the signing of a cooperation agreement between the Uruguayan Film and Audiovisual Agency (ACAU) and the National Radio and Television Administration of China (NRTA) for an exchange in the creation of content, co-productions, technologies, and training.

Sustainable development and low carbon emissions

A memorandum was drawn up to promote cooperation on sustainable and low-carbon development. “It focuses on key areas such as combating the global environmental crisis, protecting the environment, saving energy and improving energy efficiency, the circular economy, and reducing food loss and waste.”

Digital Economy

The MIEM and the China National Data Administration will generate digital economy policy exchanges and cooperation.

In conclusion, the relationship between Uruguay and China is characterized by a multifaceted and mutually beneficial partnership that has strengthened over the years. Diplomatically, both countries maintain positive and cooperative ties, focusing on promoting economic collaboration and cultural exchange. One of the critical features of their relationship is the robust trade ties, as China has become a significant trading partner for Uruguay. The Chinese demand for Uruguayan agricultural products, such as beef, has driven economic growth in Uruguay. The two nations have also engaged in infrastructure projects and investments, contributing to Uruguay’s development. Furthermore, cultural exchanges, educational initiatives, and people-to-people connections have fostered a deeper understanding and appreciation between the citizens of both countries. Overall, the Uruguay-China relationship is characterized by a strategic alignment of interests and a commitment to mutual benefit.

Guatemala is not only renowned for its rich cultural heritage and breathtaking landscapes but also for its vibrant and thriving textile industry. Woven into the fabric of the nation’s economy, the Guatemalan textile industry stands as a crucial pillar supporting the country’s economic stability and growth. In this blog post, we will delve into the multifaceted significance of the textile industry in Guatemala, exploring its historical roots, current economic impact, and potential for future development.

Historical roots of the Guatemalan textile industry

The textile industry in Guatemala has deep historical roots, dating back to ancient Mayan civilization. The Mayans were master weavers, utilizing intricate techniques and vibrant dyes to create textiles that were not only practical but also culturally significant. This legacy has endured through the centuries, with Guatemala’s modern textile industry paying homage to its indigenous roots while embracing contemporary production methods.

Economic contribution

The textile industry plays a pivotal role in Guatemala’s economy, contributing significantly to its GDP and providing employment opportunities for a substantial portion of the population. According to recent data, the textile and apparel sector accounts for a considerable share of Guatemala’s total exports, making it a crucial player in the country’s international trade landscape. This industry has become a major driver of economic growth, attracting foreign investment and fostering a robust manufacturing ecosystem.

Some of the predominant players in the Guatemalan textile industry include the following companies:

Gildan Activewear Inc.: Gildan is a well-known Canadian manufacturer of branded clothing, including T-shirts, sports shirts, and fleeces. It has a significant presence in Guatemala, with manufacturing facilities in the country.

Hanesbrands Inc.: Hanesbrands is a global company that manufactures a wide range of clothing and undergarment products. It has been involved in Guatemala’s textile industry, producing various apparel items.

Fruit of the Loom: Fruit of the Loom, a subsidiary of Berkshire Hathaway, is a major international brand specializing in the production of underwear and casual wear. They have manufacturing operations in Guatemala.

Loomcraft Textile & Design: Loomcraft is a Guatemala-based company specializing in the production of textiles and fabrics. They are known for their commitment to traditional weaving techniques and cultural preservation.

Textiles y Confecciones del Istmo (TCI): TCI is a Guatemalan textile company with a focus on the production of apparel and textiles. They have experience in manufacturing for both domestic and international markets.

Industrias Licras: This is another Guatemala-based textile company that specializes in the production of knit fabrics and garments. They cater to both local and international markets.

Maquila Lama: Maquila Lama is a textile and garment manufacturing company based in Guatemala. They offer services in the production of various apparel items.

Grupo M: Grupo M is a diversified group with interests in textiles and apparel manufacturing. They have operations in Guatemala and are involved in producing a wide range of textile products.

Employment generation

One of the most notable contributions of the Guatemalan textile industry is its role in employment generation. Guatemala’s textile factories employ a diverse workforce, ranging from skilled artisans preserving traditional weaving techniques to workers engaged in modern, high-tech manufacturing processes. The sector has become a lifeline for many Guatemalan families, offering job opportunities that support livelihoods and contribute to the overall well-being of communities.

Workers in the Guatemalan textile industry possess a diverse set of skills, reflecting the intricacies of traditional craftsmanship and the modern dynamics of global manufacturing. Proficiency in traditional weaving techniques passed down through generations, is crucial for artisans who contribute to the industry’s rich cultural tapestry. Additionally, technical skills in modern manufacturing processes, such as machine operation, quality control, and pattern cutting, are vital for those engaged in the production of textiles and garments. Given the industry’s increasing focus on sustainability, knowledge of environmentally friendly practices and materials is becoming a valuable asset. Strong attention to detail, creativity in design, and an understanding of market trends are essential for those involved in product development. Furthermore, communication and teamwork skills are valuable across the supply chain, from collaboration with international brands to coordination among local workers, ensuring the seamless operation of this multifaceted and globally connected industry.

Export revenue and trade balance

The textile industry serves as a key contributor to Guatemala’s export revenue, enhancing the nation’s trade balance. With a strong emphasis on producing high-quality garments, textiles, and accessories, Guatemala has carved a niche for itself in the global market. The country’s textile exports are in demand internationally, further solidifying its position as a reliable and competitive player in the global textile trade.

Integration into global supply chains

The Guatemalan textile industry has successfully integrated into global supply chains, collaborating with international brands and retailers. This integration not only boosts the industry’s reputation but also opens doors to expanded market access and increased export opportunities. As global consumers become more conscious of sustainable and ethically produced goods, Guatemala’s commitment to responsible manufacturing practices positions its textile industry for continued success.

Cultural preservation and heritage

Beyond its economic impact, the textile industry in Guatemala plays a crucial role in preserving the nation’s cultural heritage. Traditional weaving techniques passed down through generations, are still practiced today, ensuring that the vibrant patterns and designs that characterize Guatemalan textiles remain an integral part of the nation’s identity. This cultural preservation adds an extra layer of value to the Guatemalan textile industry, attracting tourists and fostering a sense of pride among the Guatemalan people.

The textile industry in Guatemala is far more than a manufacturing sector—it is a vital force driving economic development, employment, and cultural preservation. From its ancient Mayan roots to its current position as a global player in the textile trade, the Guatemalan textile industry stands as a testament to the nation’s resilience and adaptability. As the industry continues to evolve, embracing sustainability and innovation, it remains a cornerstone of Guatemala’s economic prosperity and a source of pride for its people.

In the heart of the Caribbean, the Dominican Republic has charted a route of economic development and competitiveness based on a firm commitment to logistics. As a vital link in its growth, the country has understood the importance of logistics and paved its path to success through concrete examples of local companies and the adoption of global trends.

The Evolution of Logistics in the Dominican Republic

The evolution of logistics in the Dominican Republic has been a story of adaptation and transformation over the decades. From its first steps as a basic transportation and storage process in previous decades to becoming an essential pillar of economic development in recent years, logistics has undergone a profound change.

In an increasingly interconnected world, the Dominican Republic has taken advantage of its strategic location and its commitment to innovation to forge a solid and constantly expanding logistics identity. The recent decade has marked a decisive turn, where logistics has gone from being an essential but underestimated activity to being the driving force of economic growth and national competitiveness.

Logistics Success Stories in the Dominican Republic

The Dominican Republic illustrates its commitment to logistics through business success stories that highlight the country’s transformation:

• DP World Caucedo: With investments in infrastructure and technology, this operating company of the Caucedo Multimodal Port has revolutionized logistics efficiency. Its modern and technologically advanced operations drive agility in the supply chain and distribution of goods.
• Ramos Group: A leader in retail and wholesale trade, the Ramos Group has used logistics as a springboard for its expansion. Its focus on inventory management and efficient distribution has strengthened its position in the market, ensuring quality service.
• DHL Express: DHL Express capitalizes on the growing demand for international shipping and courier services in the Dominican Republic. Its technological innovation and focus on customer service offer agile and reliable logistics solutions.
• Punta Caucedo Logistics Center: Strategically located, this logistics center attracts investments and strengthens the supply chain with value-added services such as storage and merchandise distribution.
• Dominican Airports Siglo XXI (AERODOM): AERODOM catalyzes the efficient movement of cargo and passengers in the Dominican Republic, consolidating the country as a regional connection point through investments in infrastructure and technology.

Trends Towards the Future and the Five Logistics Trends in 2023

Logistics in the Dominican Republic is not only following global trends but is also leading the transformation in the Latin America and Caribbean region:

• Automation and Technology: Warehouse automation will increase, using IoT (Internet of Things) to optimize inventory management and picking processes. Robotic warehouses are even being developed that feature 100% automated facilities that operate autonomously and uninterruptedly.
• Technology to offer a quality service: The use of Big Data, Artificial Intelligence, and machine learning allows us to detect errors in operations and make predictions about demand, offering an efficient and higher-quality service.
• Transparency in the supply chain: Blockchain technology allows a product to be tracked from its manufacturing to delivery to the end customer, guaranteeing its origin in sectors such as pharmaceuticals and food.
• Last mile: Development of centrally located micro warehouses, electric vehicles, drones, and robots to automate deliveries, improving customer satisfaction.
• Sustainability: Environmental awareness is on the rise, and initiatives are being worked on to reduce the environmental impact of the sector, such as route optimization, planning software, and eco-friendly delivery methods.

Demanded Professional Profiles

The growth of logistics in the Dominican Republic also leads to a growing demand for specialized professional profiles. Some of the most notable roles include:

• Logistics Technology Specialists: Professionals with experience in the implementation and management of automation systems, IoT, Big Data, and specific software solutions for logistics.
• Logistics Data Analysts: Experts in data analysis to optimize operations, predict demands, and make strategic decisions based on accurate information.
• Supply Chain Specialists: Professionals capable of efficiently managing the supply chain, from suppliers to distributors and customers, guaranteeing smooth operation.
• Sustainability Experts: Professionals committed to sustainable logistics practices, capable of implementing eco-friendly strategies and reducing environmental impact.
• Last Mile Professionals: Specialists in managing the final delivery stage, coordinating micro warehouses, electric vehicles, and innovative delivery systems.

Promising future

The Dominican Republic, with its strategic focus on logistics and notable success stories, is heading towards a prosperous future as a leading regional logistics center in the Caribbean. Its constant evolution, from its foundations to its current position, demonstrates the country’s determination to embrace innovation and lead logistics transformation in the region and beyond.

The Dominican Republic has been actively adapting to and embracing emerging trends in the logistics sector, positioning itself as a critical player in the regional and global economy. One notable aspect of the country’s commitment to staying current in logistics is its strategic investments in modern infrastructure. The Dominican government has consistently poured resources into enhancing transportation networks, including ports, airports, and roadways, to facilitate the efficient movement of goods. Moreover, integrating advanced technologies, such as GPS tracking systems and digital inventory management, has streamlined the supply chain processes. The Dominican Republic has also fostered a business-friendly environment, attracting international logistics companies and fostering partnerships with established players in the industry. Furthermore, the country has recognized the importance of sustainability in logistics, promoting eco-friendly practices and green initiatives to minimize the environmental impact of transportation and distribution. Through a combination of infrastructure development, technological integration, and a focus on sustainability, the Dominican Republic continues to stay ahead of the curve in the ever-evolving landscape of the logistics sector.

The Peruvian Ministry of Foreign Affairs considers the challenges and opportunities of the regional integration mechanism.

In 12 years, the Pacific Alliance became the eighth world economy and the sixth exporting power. The member countries represent 42.9% of the GDP of Latin America and the Caribbean and 57.4% of trade in the region.

The Pacific Alliance meets regional challenges

This mechanism, which integrates Peru (in the Pro Tempore Presidency), Chile, Colombia, and Mexico, aims to achieve more significant development, growth, and competitiveness of these economies, thus constituting an agenda with more than 30 technical work groups in areas such as education, work, social inclusion, fishing, aquaculture, among others.

The Pacific Alliance seeks to respond to the regional agenda’s new challenges, such as environmental sustainability through the responsible management of plastics, inclusive economic development led by women, and adaptation to the technological era through the construction of a Regional Digital Market.

Pacific Alliance facing economic crises

The Vice Minister of Foreign Affairs, Ignacio Higueras Hare,  recently explained that some of the common challenges faced by the countries of the Pacific Alliance were, for example, the impact of the COVID-19 crisis, for which adopted actions aimed at promoting the reactivation of the tourism sector, strengthening the digital capabilities of teachers and promoting policies in favor of occupational mental health with support from the Pacific Alliance Cooperation Fund.

Also, given the natural disasters to which these nations are exposed, in 2018, the World Bank approved the first regional catastrophe bond for earthquake risk management, becoming the largest catastrophe bond transaction of the World Bank, with 1.36 million dollars.

Opportunities for the member countries

Because the bloc promotes conditions for more significant commercial activity through the Additional Protocol, the Alliance’s free trade agreement, a tariff reduction of 98% was achieved, being very close to consolidating a Free Trade Zone.

The signing of the Free Trade Agreement between the Pacific Alliance and Singapore must add to this. Such was the effect that Peru became the first country in the bloc to ratify the agreement.

The Pacific Alliance also encourages commercial and investment opportunities, with more than ten editions of the ‘Business Macro Roundtable’ and the ‘Investment Opportunities Forum.’

“Currently, given the need to promote economic reactivation, the Pro Tempore Presidency of Peru has the strengthening and internationalization of micro, small, and medium-sized enterprises (MSMEs) among its priorities. These companies are the main sources of employment in the country. To this end, work is being done on a public-private roadmap with the contribution of the Business Council of the Pacific Alliance and the technical assistance of the Inter-American Development Bank,” added Ignacio Higueras Hare.

Jobs for youth

Through the ‘Vacation and Work Program,’ young people from the four countries can travel to see these nations and, at the same time, obtain permits for temporary paid activities.

Likewise, to promote labor mobility in the member countries of the bloc, the Pacific Alliance, with the support of the European Union, is implementing the homologation of labor skills certifications.

Recently, at the VIII Youth Meeting of the Pacific Alliance, a job fair was held in which numerous companies from the four countries offered 4,500 direct job opportunities to young people from Peru, Chile, Colombia, and Mexico.

Peruvian exports have had great success

According to figures from the Ministry of Foreign Trade and Tourism (2023), Peruvian exports to the member countries of the Pacific Alliance increased by 13% since 2011, reaching approximately 3.9 billion dollars in 2022. This is due to the participation of more than 3,000 companies, of which more than 50% were micro, small and medium-sized enterprises ( MSMEs ).

The figures mentioned above show that the export increase in the non-mining energy sector was 48.7% since 2011. Likewise, more than 500 products have increased their exports since the beginning of the Pacific Alliance. For example, avocado and paprika have increased 11-fold.

New challenges for the Pacific Alliance

Now, the bloc has a critical challenge: to increase intra-Alliance trade, which remains between 6 and 7%. For this reason, the Strategic Vision for 2030 of the Pacific Alliance aims to double the trade between the four countries.

“To contribute to this objective, the Pro Tempore Presidency of Peru is promoting workshops for the use of the Additional Protocol, disseminating the advantages that it offers to various economic actors, as well as the possibility of modernizing the Protocol, incorporating actors such as trade, SMEs and components of productive chains,” revealed the Vice Minister of Foreign Affairs.

Considerable private investment

According to data from Proinversión (2023), an increase in private investment is reported from the launch of the Pacific Alliance to the present, highlighting the case of Chile, which registered a growth in investment in Peru of 157%, and Mexico and Colombia, whose investments in the Peruvian nation grew 27% and 20% respectively. This is based on 2011 figures in contrast to those reported in 2022.

Regarding investment items in Peru as a capital contribution, Chile concentrates higher figures in the Communications (US$ 1,613 billion) and Finance (US$ 1,061 billion) sectors; Colombia focuses on the Industrial (US$517 billion) and Energy (US$494 billion) sectors; and Mexico in Communications (US$ 407 billion).

The regional bloc is advancing in this matter through the Council of Finance Ministers of the Alliance, which brings together the ministries of Economy of the four countries and is also led by Peru. The group develops issues of financial integration, tax treatment, investment in infrastructure, and catastrophic risk management.

Tourism in the Pacific Alliance countries

Ignacio Higueras Hare also highlighted the growth of the flow of tourists to Peru from the countries of the Pacific Alliance. Currently, Chile represents the first source of tourists to Peru, Colombia the fourth, and Mexico the ninth worldwide.

Since 2011, the flow of tourists from the member countries has been increasing progressively. It has tripled in the case of Mexico and doubled in the case of Colombia from 2019 to before the COVID-19 pandemic.

“We have the important challenge of recovering the flow of tourists after the pandemic. In this framework, joint tourism promotion actions were carried out during the Pro Tempore Presidency of Peru, such as the First Sustainable Tourism Business Meeting held in a virtual format on August 9, 16, and 17. Additionally, the First Investment Attraction Seminar for Tourism was held on September 5 in Santiago de Chile, where the ‘Treasure of the World’ video was launched. In it, the Pacific Alliance countries invite international travelers to spread the tourist wealth of the four member countries,” he indicated.

Peru is a promoter of the trade union

Peru was the great promoter of the Pacific Alliance through the Lima Declaration of April 28, 2011, which gave rise to the organization. This bloc was a commitment to “open regionalism,” an integration initiative that promoted the liberalization of goods, services, capital, and people among its partners without opposing each State’s opening towards the world, thus stimulating participation in global markets.

The history of the Pacific Alliance showed a vital degree of pragmatism that allowed this integration process to advance. Thus, since its creation, it was agreed that this bloc does not have a General Secretariat but rather a Pro Tempore Presidency that is transferred among its members.

The interest created by the Pacific Alliance since its inception led many countries to apply for Alliance Observer status. To date, a total of 63 countries are observers.

Likewise, this integration bloc has attracted the interest of States that aspire to become full members. In this sense, Panama signed the Lima Declaration of 2011. It participated in various summits, as did Costa Rica, a country that signed the Paranal Declaration in 2012 and began an accession process that was paralyzed in 2014. Now that the Central American nation has resumed its interest in being part of the Pacific Alliance, the Pro Tempore Presidency of Peru will seek to bring about its integration.