Canada has become an official observer in the fledgling Pacific Alliance trading bloc, a signal it wants to get involved quickly with a new group that intends to forge trade links between Latin America and Asia.
The Alliance, just formed officially in June, groups together four countries that string down the west of Latin America – Mexico, Colombia, Peru, and Chile – who intend to strike new trade deals with Asia.
After Ottawa struggled this year to gain entry to talks toward another potential bloc, the Trans-Pacific Partnership, it appears to be eager to link with the Pacific Alliance from the start.
Diane Ablonczy, the junior foreign affairs minister for the Americas, announced Thursday morning in Bogota, where she is leading a trade mission, that Canada had been granted observer status.
She noted Canada already has separate free-trade agreements with the four Pacific Alliance members.
“We have trade agreements with all of them,” she said in an interview from Bogota, Colombia. “But also, they have a real vision now to link back to the Asia market.”
The Alliance aims to reach new trade deals with partners in Asia like the 10-nation ASEAN bloc, creating a cross-Pacific trade arrangement.
The Pacific Alliance is just beginning, but its ambitions are high. The four nations have linked stock exchanges, are moving toward the free movement of goods and services, and plan to drop visa requirements within the bloc. Panama, an observer since the beginning, is planning to join.
Canada’s observer status is not full membership, and Ms. Ablonczy would not say if Ottawa has any intention of exploring a full role. The kind of integration the Alliance plans might prove an obstacle. But observer status means Canada can watch it develop – and seek to join in deals the Alliance negotiates with partners like ASEAN in Asia.
Canada’s efforts to get involved early are a sign that the Harper government has decided it cannot afford to move slowly when new trade blocs emerge in the region.
Ottawa chose not to join in the TPP talks when it the four nations behind the deal – New Zealand, Chile, Singapore, and Brunei – first sought to expand it by including the U.S. and others in talks in 2008.
But as the TPP emerged as a potential new Pacific Rim trading bloc, possibly encompassing a dozen or more countries, Mr. Harper’s government signalled in 2011 it wanted in to the talks. But Canada struggled to be allowed to join the negotiations, as countries already in the talks, notably the U.S. and New Zealand, sought assurances of concessions so that Canada’s entry would not set back progress.
The TPP talks remain enormously complex, however, with the U.S. the dominant player at the table, and it will take several years before a deal is struck. Some argue that the smaller Pacific Alliance has a better chance to quickly close a Pacific Rim deal with Asian counterparts like ASEAN.
“The TPP has been in place for a considerable period of time. Canada has only lately been part of that,” Ms. Ablonczy said. “But now, with the Pacific Alliance just a few months from its formation, Canada is very much in the picture and part of the discussions going forward. We have a lot of potential there.”