* Latin America seeks integration, yet divided in terms of
* Pacific Alliance advocates free trade, foreign investment
* Tariff elimination begins in July
By Eduardo Garcia
BOGOTA, May 23 A Latin American bloc that
includes Colombia, Mexico, Peru and Chile on Thursday agreed to
eliminate tariffs on most goods to promote free trade between
the countries and increase exports to Asia.
The members of the nascent Pacific Alliance group also aim
to promote free market policies as the key to economic growth,
attract more foreign investment and integrate their capital
markets and energy networks.
At a meeting in the city of Cali, Colombia, the presidents
of the four member countries agreed to remove tariffs on 90
percent of the goods traded between them, and to eliminate
duties on the remaining 10 percent in the medium term.
The tariffs will be lifted in July, Colombia's President
Juan Manuel Santos told a press conference after the summit.
"The door to our destiny is the construction of an area of
deep integration that will allow us to become part of the global
economy more successfully and more forcefully - particularly in
the Asia Pacific region," Santos told reporters.
The cluster of nations includes some of Latin America's
fastest-growing economies. They have a combined population of
210 million and their total gross domestic product accounts for
more than a third of Latin America's GDP, said Santos, dubbing
the Alliance the "new economic and development motor" of the
Latin America is broadly divided between the Pacific
countries that are free-trade advocates, and the Mercosur states
on the Atlantic side that have been more reluctant to drop
barriers to trade.
Robust economic growth, high commodity prices and explosive
domestic demand have lured high levels of capital to much of
Latin America in the past decade.
According to the United Nations, the region's economy is
seen growing 3.5 percent this year, up from 3 percent in 2012,
boosted by strong growth in Brazil and Argentina, surging
domestic demand, as well as agriculture and investment.
However, the shaky global scenario, characterized by
persistent uncertainty and low growth, will likely dampen demand
for commodities produced in Latin America. Many countries in the
region, whose exports include soy, copper and oil, are dependent
on avid Chinese demand for their products.
MESH OF BLOCS
Despite recent moves by Latin American nations toward
"regional integration," there are bitter internal differences
over trade policy.
The Pacific Alliance will aim to gain more clout in Latin
America by promoting free trade and focusing on fast-growing
Asian economies as an alternative to the protectionist policies
championed by Mercosur members such as Argentina and Venezuela.
Even though it is only a year old, the Pacific Alliance
seems to be gaining momentum. Costa Rica, Panama and Guatemala
have already expressed a desire to become members.
The group's progress may be helped by the death of
Venezuelan President Hugo Chavez, who spearheaded a batch of
leftist nations that rejected U.S. "imperialism" and free trade.
His death in March after a long battle with cancer left
Latin America without one of its most influential presidents,
leading to a power vacuum that could be filled by more pragmatic
(Additional reporting by Helen Murphy; Editing by Lisa