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Ecuador set to join the Pacific Alliance Latin American-Asian trade organization

Ecuador will join the market-friendly regional trade bloc the Pacific Alliance next year, the president of Peru said on Saturday, in the latest sign of the South American country’s rightward shift under President Lenin Moreno.

Foreign trade could increase when Ecuador joins the Pacific Alliance.

The Pacific Alliance was formed by Peru, Mexico, Colombia and Chile in 2012 to promote free trade and strengthen ties in the Asia-Pacific region, drawing a contrast with Latin American groups such as ALBA and CELAC which were led by the region’s leftist presidents.

Ecuador’s former president Rafael Correa, a leftist who governed from 2007-2017, had said Ecuador would not join the Pacific Alliance as long as he was in office.

But Moreno, a former political ally of Correa, asked the bloc if Ecuador could join after he replaced Correa in 2017. That was one of several moves to reverse his predecessor’s positions, which also include starting trade talks with the United States, signing a $4.2 billion deal with the International Monetary Fund and kicking Julian Assange, the co-founder of WikiLeaks, out of Ecuador’s London Embassy.

“We welcome Ecuador and have committed to accelerating procedures for its incorporation as a full member, hoping that in the course of 2020 Ecuador will be a member of the Pacific Alliance,” Peruvian President Martin Vizcarra told journalists at the Pacific Alliance summit in Lima, the capital.

Chilean President Sebastian Pinera welcomed the presence of Moreno at the summit as a special guest and said Ecuador “should have always been a part of the Alliance.”

“For well-known reasons it hasn’t been. But today, things have changed and the conditions are right,” Pinera added.

Pacific Alliance members currently account for 37% of gross domestic product in Latin American and the Caribbean, thanks largely to Mexico, the second biggest economy in Latin America.

Mexican President Andres Manuel Lopez Obrador did not attend the summit in Peru, sending his Foreign Minister Marcelo Ebrard instead.
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Credit: Reuters, www.reuters.com

29 thoughts on “Ecuador set to join the Pacific Alliance Latin American-Asian trade organization

  1. Quitting a trade bloc consisting of the worst economies in Latin America and joining one the includes the best seems like a no brainer.

    1. Of course it depends on how you define “best”. The three narco states that make up 85% of this trade bloc is hardly something to aspire to.

      1. I use nominal GDP as an economic measuring stick while chuckling at your narco-state scoff.

        1. GDP is meaningless without also considering the GINI index. It doesn’t matter if your country has all the money in the world if almost all that money is concentrated in a few hands.

      2. I enjoy discussing the Correa legacy with Ecuadorian Correistas. It actually makes me proud of this country. There are many who express the ideals of economic and social equality being achieved first by leveling the playing field. However, being familiar with the culture and human nature, I wonder that if these same people had money and power, would they be of the same opinion?

        1. If enough people had money and power, there wouldn’t be as much of a need for leveling the playing field. History has shown consistently that once a society becomes too unequal, it collapses. History has also shown that the only way to reduce the equality gap is through policy. Those with all the money and power, money and power that only perpetuates access to more money and power, never give it up willingly.

          1. ”…once a society becomes too unequal, it collapses.”
            The U.S. has the most ”unequal” wealth concentration in recorded history, and the gap continues to get wider.

            When do you suppose this massive economic imbalance will cause the US to finally collapse?

            As you say, they (the 1-2% oligarchy & the govt that rules to serve them) are never going to give it up willingly.

            1. The US doesn’t have the most unequal wealth concentration in recorded history, not even close. The US GINI coefficient is around 40. The most unequal country on record is South Africa at 63. By region, the most unequal countries are all found in Subsaharan Africa and Latin America, both regions that are constantly in turmoil. The coefficient is probably higher in Middle Eastern countries but most of them don’t report statistics (and they’re also constantly in turmoil). The most prosperous and peaceful countries all have coefficients of around 30 or lower. Not surprisingly, those countries also have the highest HDI ratings and are consistently ranked among the happiest countries in the world.

              1. My son, who lives in Dubai tells me that there is a huge unequal wealth concentration in that region. Is the United Arab Emirates in constant turmoil?
                I don’t think so. They allow folks from other countries to work there as second class citizens. The foreigners don’t seem to mind because they are earning more than they could in their own country. Equating a country’s social “happiness” is more complex than just comparing GINI coefficients.

                1. Indeed it is more complex. That’s why the GINI index is measured using one methodology while GNH (gross national happiness) uses another. The HDI (Human Development Index) uses a different methodology all together. However, there is one undeniable fact: all three indexes are directly correlated.

                  As for the UAE, the fact that people are so desperate to provide for their families back home that they go there for work doesn’t mean they’re happy. The UAE has a LONG and checkered record on human rights. The fact that foreign workers have their passports taken away from them upon arrival might be an indication of whether or not they “seem to mind” the conditions there. Domestic workers regularly face physical and sexual abuse by their employers and the “kafala” system denies them little to no rights to seek redress from their employers. To top it off, many workers end up not getting paid at the end of their contracts and are essentially expelled from the country only to be returned by another person desperate to feed their family back home.

                  The UAE managed to avoid the Arab Spring because the brutal dictatorship that maintains order tortured and disappeared hundreds of protestors and activists early on. People are regularly detained indefinitely without charges, tortured for weeks or months, and the kingdom refuses to provide any information of their status or allow them access to legal council. The press is tightly controlled by the government and people who criticize the government or the royal family are regularly imprisoned.

                  So whether or not they are “in turmoil” depends on how you define turmoil. The fact that you don’t think so is hardly a valid argument. One can maintain the outward appearance of peace and prosperity by creating a truly peaceful and prosperous society … or you can simply imprison and torture anyone who seeks to improve conditions. The UAE takes the former approach. The idea that you considered it as an example of your hypothesis makes me wonder if you really took the time to think about this issue, if you actually know anything about the Gulf states or if you thought scoring some quick rhetorical points was just as valid as being right. In either case, the UAE, a nation where 88% of the people are non-citizens living under conditions human rights groups consistently describe as modern slavery, is a perfect example of what happens when a society becomes too unequal. Measuring happiness is indeed far more complex than measuring the GINI index, but measuring GDP on its own is even less important.

                  For the record, nobody knows the GINI coefficient or the GNH score for the UAE because they don’t report income statistics to the UN. Their high HDI score is considered meaningless by the UNDP because they only include statistics on UAE citizens and not the foreign workers that make up 88% of the people living there. That’s a common approach among most of the Gulf states that similarly have a large proportion of their population made up of slaves.

                  Here’s a summary of the human rights record in the UAE.

                  https://en.wikipedia.org/wiki/Human_rights_in_the_United_Arab_Emirates

                  I’ll let you decide whether or not you think that constitutes “turmoil”.

          2. His(, as in your,)story. Sure, it’s a popular story. Go populism.

            If you can collapse your programming about what countries are (& so what they used to do, & byfor whom), then countries – as far as you’re concerned – collapse instantly. That’s much better, more efficient-effective, than the eventually that must & always comes anyway: denial isn’t low time preference. The truth won’t set you free. But it can get you closer to that ideal.

            “Policy.” The name “policy” is based on the similarity to cheap insurance, which is also a gamble on the future.[1] Closely related is policy, known as the policy racket, or the policy game.

            https://en.wikipedia.org/wiki/Numbers_game#Policy_dealers

            As for lottery devising-running policy wonks that just won’tcan’t wake – or “grow up,” as some fancy it — lets give ‘em to Willie. Let him work ‘em in the chocolate factory. If they can’t shake free
            from all that mental debris anyway, they might as well be useful – instead of murderous. Who doesn’t like chocolate?

            https://www.youtube.com/watch?v=vQQoMCaUz5Y
            Your papers, rocks, please. Which of these people should be encouraged to run with scissors?

            https://www.youtube.com/watch?v=fpK36FZmTFY
            Like WilkinsonSlugworth. He looks like he usta’ be a policy wanker.

            Them as dream of setting policy nightmares for other people do not pass go –they go straight to the chocolate factory – now that’s a policy that’d pay: trespassers will be chocolatier’d. Dividends to
            posterity, too, that. Insteada’ all this posteriority.

            Alas, too many passengers are pigeons, lookin’ back from their statue perches, & festooning their feet with their own & each others’ waste. The politico-pundit-peon (ppp) swamp dance o’
            death is everywhere, not just in a bit of basin around part of the Potomac.

            https://www.youtube.com/watch?v=dXot5_H4CM4

            Counterfeit central bank “money” fuels the inequality like nothing else – & that’s policy. (Cuz, hey, there’s golden asteroids flying around outer space. Whilst most of the earthbound gold sits in central bank vaults. Prolly to protect humanity from the barbarousness. Sure. That’s it.)

            This lottery is rigged to concentrate wealth via fraudtheftrobbery (the fake money pouring into dirty hands at the head of the line buys up real assets…including ostensibly real people…in the ppp sump).

            No checks (or balances) that ain’t kited & in the mail. Tulip bulbs mania. Manic two lips on busted filament bulbs, jibber-jabbering in their benightedness. Echo loacation amongst the cave dwellers…is the highest use of language the spiel•unkers can manage. So of course the Morlocks eat em’ alive.

            But Morlocks is just Eloi standing closer to the head of the counterfeit queue. And so mad cow•ard disease doesn’t ever not
            ensue.

            Wells’ title was The Time Machine. What it actually is, shoulda’ been titled, is The Time Preference Machine. Cuz what the menschless Morlocks&Elois cannibal pot boils down to is high time preference.

            “In the long run, we’re all dead,” say the cannibals. So faster, Schrödinger pussycats. Kill. Kill.

            Prions. Misfolded, spindled & mutilated Wimpy burger protein (into con•tein) loans – check’s in next Tuesday’s mail – for everyone, steada’ just the criminals nearer the head of the line. Its a race to the bottom, as always.

            This was a fun flick about counterfeiters, showing the fed & rival criminal gangs for what they are:
            https://www.youtube.com/watch?v=I5JI_RclmIg

            Thx for the exercise.

  2. It’s indeed a no brainer. Ecuador should have been a member from the beginning, but at that time we had Correa who was more interested in Bolivia, Venezuela and China. I am sure that Ecuador will now attract much foreign investments than before. The difference with Peru and Colombia with respect to foreign investments is huge.

    1. The difference with Peru and Colombia with respect to violence and poverty is also huge. Foreign investment doesn’t benefit anyone except foreign investors, polluters and money launderers.

      1. Unfortunately, there is no empiric evidence to back your claim. There is, however, a lot of evidence that FDI and economic development are linked.

        1. There’s no empiric evidence that Peru and Colombia have much higher rates of violence than Ecuador?

  3. “We welcome Ecuador and have committed to
    accelerating procedures for its incorporation as a full member, hoping
    that in the course of 2020 Ecuador will be a member of the Pacific
    Alliance,”

    Translation, we need to speed up Ecuador’s entry into an alliance that the Ecuadorian people never wanted before they get a president who fulfills the promises that got him elected in the first place. Like the IMF loans, the idea is to get the country so bogged down in contractual obligations that no matter who the people choose, that leader will have no other option than to continue the policies of the people who Ecuadorians have rejected at the polls in every election for the past 15 years.

    It is telling that with the exception of Chile and the three narco states that founded this alliance, no country has become a full member. It’s even more telling that none of the presidents currently seeking membership expressed any such desire as part of their campaigns. One has to wonder why, if it’s such a great deal for the countries involved, no country has entered this alliance through the democratic will of its people.

    For the record, Mexico is only still a member because the right-wing narco government of Felipe Calderon obligated them in such a way that leaving the alliance would cost them billions. AMLO, the left-wing president recently elected by a landslide in what most observers call the first honest election in Mexico since the revolution, has stated on many occasions that he is not interested in the alliance. What value is there in an economic bloc in when the country that makes up more than half its GDP is already looking for a way out?

  4. Mr Moreno obviously has the economy pointed in the right direction!!! Mo mas Chavismo!!!

    1. As a general rule, I must say trade makes me feel warm and fuzzy. Aside from the proven economic benefits, people who trade rarely go to war with each other. Who wants to kill customers?
      On the other hand, of all the articles out there, this one is heavily biased, Bob? Your slip is showing.

    2. That explains why it grew less than 1% last year and, per the IMF, will not grow at all this year.

      1. So !! You feel that Chavismo is necessary in order for the Ecuador economy to grow! Not so much I’m afraid!!!

  5. It is going to be tough for any business to survive in Ecuador until a more sophisticated banking system is put in place. When you are borrowing at 12% and have narrow profit margins you can’t make it. Chile broke out of third world status by doing this and Dilma did it in Brazil when she was Finance Minister but brought it down with scandals when she became President!!

    1. Interest rates are not based on the sophistication of the banking system. They’re based on the risk of the borrowers. Chile broke out of third-world status in the 1960s by not privatizing their natural resources, something they maintain to this day.

      As for Dilma, you might want to go read up on the subject before offering an opinion. The economy improved while she was finance minister because of the broad sweeping economic policies implemented by the Lula administration, not because streamlining the banking system magically creates growth. Those policies were focused on reducing inequality and improving access to social services, an approach that has been consistently shown around the world to lead to economic growth.

      Dilma was never found guilty of any scandal, she was removed by a parliamentary coup. The opposition-controlled senate impeached her despite no crime ever being found. The man who brought the impeachment case before the senate was ultimately convicted of embezzling millions, as were dozens of the senators who voted to oust her, and the vice-president who replaced her served out the remainder of her term with single-digit approval ratings and was ultimately arrested for corruption. He currently faces over a dozen charges for the theft of tens of millions of dollars, this despite having a political ally currently serving as president.

      Meanwhile, no evidence has been presented tying Dilma to any crime. The tactics used to oust her and to keep Lula from running, tactics that are now widespread among right-wing governments throughout Latin America, is known as by legal experts around the world as lawfare, the use of the legal system to keep your political opponents out of the democratic process (just like the Balda case). Whether or not a crime is ever proven is immaterial (just like the Balda case). The point is to disable, through parliamentary and judicial tactics, anyone you cannot defeat at the polls. If you want a crash course in the tactic, just read the daily news in Ecuador.

      Just in case you were interested in reality.

      1. Reality is so interesting.

        Color of law, “lawfare,” whatever synonym ya’ like, these are raison detre of gov (behind which pretense country wielders curtain themselves, a la Oz(ymandias) types. ∞

        https://www.youtube.com/watch?v=t1Wp37haiG4

        “You are many.” “They are few.” But all most the many want is to “vote,” an “elect” few to “represent” them. What lies beneath the refusal to learn, to take self-responsibility? The question answers itself.

        The song is She Got the Goldmine & I Got the Shaft. But the dirge
        reality is that most she’s gave away the goldmine, the golden goose, & the
        midas touch & took the shaft – willingly. Nay, beseechingly.

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