INTEGRATION OF LATIN AMERICA WITH THE UNITED STATES OF AMERICA

CULTURE AND THE REGIONAL ECONOMY OF AMERICA

BY:
Kelly Yojhana Daza Aparicio
Nermis Magllory Romero Arbeláez
Yadira Salamanca Beltrán
Oscar German Claros Marroquín
Oscar Ferney Colorado Bustos

PRESENTED TO:
TEACHER: Juliana Jaramillo Correa

UNIVERSITY INSTITUTION
POLITÉCNICO GRANCOLOMBIANO
ECONOMIC AND ADMINISTRATIVE SCIENCES
PROGRAM: INTERNATIONAL BUSINESS
2019-2

1
INTEGRATION OF LATIN AMERICA WITH THE UNITED STATES OF AMERICA

CULTURE AND THE REGIONAL ECONOMY OF AMERICA

POR:
Kelly Yojhana Daza Aparicio
CC 1031148474 COD: 1621021498

Nermis Magllory Romero Arbelaez

CC 1017160409 COD: 1621020453

Yadira Salamanca Beltran

CC 52887748 COD: 1621021335

Oscar German Claros Marroquin

CC 1033741404 COD: 1711024179

Oscar Ferney Colorado Bustos

CC 80830269 COD: 1121070748

PRESENTED TO:
TEACHER: TEACHER: Juliana Jaramillo Correa

UNIVERSITY INSTITUTION
POLITÉCNICO GRANCOLOMBIANO
ECONOMIC AND ADMINISTRATIVE SCIENCES
PROGRAM: INTERNATIONAL BUSINESS
2019

2
 Table Of Contents

Introduction .................................................................................................................................................. 4
Research Problem ......................................................................................................................................... 5
Justification ................................................................................................................................................... 6
Hypothesis .................................................................................................................................................... 7
General objective.......................................................................................................................................... 8
Specific Objectives ........................................................................................................................................ 9
Characterization of the Countries .............................................................................................................. 10
Chile ......................................................................................................................................................... 11
Mexico ..................................................................................................................................................... 15
Perú ......................................................................................................................................................... 18
Colombia ................................................................................................................................................. 21
Theoretical framework ............................................................................................................................... 24
Legal Framework ........................................................................................................................................ 26
Conceptual Framework .............................................................................................................................. 27
King of investigation………………………………………………………………………………………………………………………….28

Bibliography ................................................................................................................................................ 33

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 Introduction

We going to do this investigation for looking for the possible scenarios of participation of
Latin American countries with United States, for this case we working with the countries
of the Pacific Alliance and integration with the United States; we want to know the
characterization of each countries, for example population, language, general information,
economic indicators, inflation, unemployment, culture and another features.

After we know features of each country member of the Pacific Alliance, we analyze the
possible options for these countries can integrated with United States, and how this
integrated can be benefices economics for Latin American countries.

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 Research Problem

We want looking for options to the members of pacific alliance can integrated with United
States, this investigation is so important because we can identify opportunities for this
integrated, so our questions is ¿What options have the countries members of pacific
alliance for integrated with United States and the benefices? For answer this question, we
through this project going to knows the characterization for each country, including United
States and going to analyzes the possibilities, options and difficulties for this integration.

5
 Justification

Currently, international relations and foreign trade is a necessity that all countries have
since with this a fundamental requirement for the development and potentializing of its
aspects such as economic, science, goods, services, technology and culture.

All the countries of the region make great efforts to be competitive and to be referents
regarding their international relations to achieve these achievements. It is necessary to
seek treated alliances that seek to obtain a benefit or attribute that better their aspects.

There is a lot of talk about alliances and treaties, but we know about them, or we know
what our region offers with respect to export and import, or we can even ask ourselves,
do we know or know what our country offers or treaties.

In order to know how to identify and visualize what our country offers before the countries
of the region we have decided to investigate The Pacific Alliance, we will begin by knowing
the countries that comprise it, its objectives, benefits of the alliance, economic aspects,
the main achievements, and We can know its significance through the timeline of the
alliance.

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 Hypothesis

Given the information obtained during the conduct of research work we can conclude that
we are able to know the role of each country that makes up the Pacific Alliance.

Identify that the Pacific Alliance is a factor of integration based on the economic and
financial aspects, stating the actors that intervene, seeking the welfare of the majority
sectors affected by poverty.

It is necessary to evaluate and study the evolution of social economic indicators and thus
be able to know what the benefit of each country is and how they defend it, they have
invested their profits in their population.

Know if the alliance provides the opportunity for local and regional companies in order to
potentiate productive ventures to generate global value by increasing commercial
participation worldwide.

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 General objective

Achieve a strong incorporation that drives economic growth and development of the goods
and services of the countries that are part of the Pacific Alliance, thus generating greater
credibility and confidence in the commercialization process, as these processes will be
agile and easy access while guaranteeing absolute security in which financial
strengthening was evidenced as the object of strong plans for the economy, trade, and
accelerated commercialization growth, involving observer countries from which an
economic benefit can be obtained by their currency.

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 Specific Objectives

 Encourage regional integration, as well as greater growth, development and

competitiveness in the commercialization of innovative and easily accessible products.

 Create a more attractive and innovative market, characterized by increasing new

customers and obtaining their permanence.

 Potentialize an increase in goods and service by generating greater contracting in

agricultural machinery, mining, and livestock, as an increase in the production of raw
material for export purposes can be obtained by increasing FTA and the economy

 Carry out a competent integration in the different tariffs of which the Pacific Alliance
countries are part

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Characterization of the Countries

10
 Chile

General Information
Name: The official name of our country is Republic of Chile
Capital: Its capital is Santiago de Chile.
Language: Spanish and there are also quite a few indigenous languages such
as Mapudungun (spoken between the Itata and Tolten rivers) and Aymara (spoken in the
mountains of the north).
Religions: Roman Catholic 89%; Protestant 11%, 8% of Chileans are not affiliated with
any religious faith.
Geography: It is located along a seismic and volcanic area belonging to the Pacific Ring
of Fire, its unusual geography that includes different climates: from the Atacama Desert
in the north that contains great mineral wealth, mainly copper to Antarctica in the south.
Located on the Pacific coast in South America, the country extends along 4800 kilometers
of coastline, but is not more than 180 kilometers wide and the Andes Mountains isolates
it from its neighbors: Argentina, Bolivia and Peru. Chile is one of the most developed
countries in the continent. Southern Chile is rich in forests and grazing lands and features
a string of volcanoes and lakes. (WORLDATLAS, 2015)

Culture: Indigenous cultures of Chile blended with European (especially Spanish)

cultures make up the present Chilean culture. The cuisine of Chile is a blend of indigenous
cuisine with European cuisine. Spanish, Italians, British, French, and Germans all having
influenced the cuisine of Chile. The Cueca is the national dance of Chile that was primarily
promoted during the Pinochet regime in the 1970’s and 80’s to promote Chilean

11
nationalism and cultural pride, the Tonada is another popular form of Chilean music.
(WORLDATLAS, 2018)

Business culture:
In Chilean business culture Although for years Chile was considered one of the most
conservative countries in South America, today we are a town that looks forward and
opens up to the world with a height of sight and without fear. Communication styles tend
to be tuned to people's s feelings. Confrontation is generally avoided in order not to
jeopardize another's honour or dignity - it may therefore be necessary to read between
the lines in order to fully understand what is really meant, it is important to be patient as
time is not of the essence in Chile - meetings will last as long as they need to last.
(CONNISCEO GLOBAL CONSULTING, 2019)
The Chilean business culture has a definite hierarchical order when it comes to decision
making. You will be expected to defer to the most senior person present.

Chileans are a very patriotic people and will likely take offense at negative comments of
any kind directed at their country. (Kelly, 2018)

Economy

Chile is the 42nd largest export economy in the world. The top exports of Chile
are Copper Ore, Refined Copper, Fish Fillets, Sulfate Chemical Woodpulp and Raw
Copper, the top export destinations of Chile are China, the United States, Japan, South
Korea and Brazil.
Its top imports are Cars, Refined Petroleum, Crude Petroleum, Broadcasting
Equipment and Delivery Trucks, the top import originis of Chile are China, the United
States, Brazil, Argentina and Germany.

The economy of Chile has an economic complexity It the 61st most complex country.
Chile exports 124 products with revealed comparative advantage meaning that its share
of global exports is larger than what would be expected from the size of its export
economy and from the size of a product’s global market.

Chile has signed free trade agreements (FTA) with the European Union, the United States,
China and South Korea, Chile is a member of the Pacific Alliance since 2012, also signed
a trade continuity agreement with the United Kingdom ensuring trade relations you
continue. (OEC, s.f.)

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 Main Indicators 2016 2017 2018 (e) 2019 (e) 2020 (e)
GDP (billions USD) 249.92 276.99e 299.89 305.56 322.9
GDP (Constant Prices,
Annual % Change) 1.3 1.5e 4 3.4 3.2

GDP per Capita (USD)

13,738 15,068e 16,143 16,277 17,022

General Government
Balance (in % of GDP) -1.1 -2 -1.8 -1.6 -1.4

General Government
Gross Debt (in % of 21.049 23.597 24.759 26.026 26.67
GDP)

Inflation Rate (%) 3.8 2.2 2.4 3 3

Current
Account (billions USD)
-3.48 -4.1 -7.42 -8.35 -7.98

Current Account (in %

of GDP)
-1.4 -1.5 -2.5 -2.7 -2.5

Socio-Demographic
2018 2019 (e) 2020 (e)
Indicators

Unemployment
Rate (%) 6.9 6.5 6.2

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 Monetary Indicators 2013 2014 2015 2016 2017

Chilean Peso (CLP) -

Average Annual
Exchange Rate For 1 632.53 727.48 698.1 720.17 732.93
EUR

Breakdown of
Economic Activity By Agriculture Industry Services
Sector

Employment By
Sector (in % of Total
9.3 22.7 67.6
Employment)

Value Added (in % of

GDP) 3.8 30 57.6

Value Added (Annual %

Change)
0.3 -0.4 2.7

( (FOCUS-ECONOMICS, 2019)

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 Mexico

General Information
Name: United Mexican States
Capital: Mexico City
Language: Spanish
Religions: Roman Catholic is the most popular religion in Mexico with 82.7%

Geography:
Mexico sharing a northern border with the United States of America and a southern border
with Guatemala and Belize. To its west lies the Pacific Ocean, and to the east are the Gulf
of Mexico and Caribbean Sea. Mexico is a land of extremes, with high mountains and
deep canyons in the center of the country, sweeping deserts in the north, and dense rain
forests in the south and east. Mexico is a country of southern North America and the third
largest country in Latin America, after Brazil and Argentina. It has the 4th highest
biodiversity in the world. (STUDY)

Culture:
Most Mexicans are mestizos, which means they have a mix of Indian and Spanish blood.
Mexican culture is a fusion of indigenous people with Spaniards, which has had an impact
on all aspects of their lives.
Mexicans have many ancient traditions that they have preserved from their ancestors so
it can be a destination to visit, meet and learn. The indigenous cultures that inhabit and
inhabited Mexico influenced other fields such as cooking, culture, rituals and medicine.
15
Festivals and fiestas are extremely important in Mexico and celebrated even in the
smallest villages. Every community has its own patron saint who is honoured with
celebrations and processions every year.
(Dwyer, 2017)

Business culture:

It is a culture that has generated different connections for many years, it is also known as
a high context culture and decisions are built through long-term relationships and face-to-
face interactions, the communication is much less direct as many ideas are inferred
through vague communication.
Mexico is a country where family and personal relationships are priorities, so it should be
no surprise that Mexican business associates are prone to mixing business and personal
relationships. “Family ties provide access to business joint ventures, to favorable terms
on negotiations, and to reaching people in power in Mexico. Family ties provide little of
this in the United States,” (Mexico Business Associates, 2016)

Economy

The economy of Mexico is the 15th largest in the world, Mexico has the 12 largest export
economy in the world. Its principal exports include: crude petroleum, cars, vehicle parts,
delivery trucks and computers. A large percentage of its exports go to the following
countries: The United States ($291 billion), Canada ($24.5 billion), China ($7.89 billion),
Spain ($6.18 billion), and Brazil ($5.35 billion).
Mexico has a positive trade balance because its exports are greater than imports. Its
major imports include: refined petroleum, vehicle parts, integrated circuits, computers, and
broadcasting accessories. A large portion of its imports come from the following countries:
the US ($194 billion), China ($58.7 billion), Japan ($15.8 billion), South Korea ($13.4
billion), and Germany ($12.8 billion). billion), and Germany ($12.8 billion). billion), and
Germany ($12.8 billion).

Mexico has managed to maintain an economic profitability, but it must improve some
aspects so that it can continue to maintain that profitability, one of these aspects is the
socioeconomic states since it has a very noticeable inequality. (WORLDATLAS, 2019)

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 Main Indicators 2016 2017 2018 (e) 2019 (e)

GDP (billions USD) 1,077.78 1,151.05e 1,199.26 1,242.39

GDP (Constant Prices,

2.9 2.0e 2.2 2.5
Annual % Change)

GDP per Capita (USD) 8,815 9,319e 9,614 9,866

General Government
-4.0 -2.4 -2.6 -2.6
Balance (in % of GDP)

General Government
56.762 54.332 53.815 53.678
Gross Debt (in % of GDP)

Inflation Rate (%) 2.8 6.0 4.8 3.6

Current Account (billions

-23.32 -19.35e -15.31 -15.97
USD)

Current Account (in % of

-2.2 -1.7e -1.3 -1.3
GDP)

Socio-Demographic
2018 2019 (e) 2020 (e)
Indicators

Unemployment Rate (%) 3.5 3.5 3.5

Monetary Indicators 2013 2014 2015 2016 2017

Mexican Peso (MXN) -

Average Annual Exchange
Rate For 1 EUR
16.31 16.95 16.91 19.86 21.38

(SOCIETE GENERALE, 2019)

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 Perú

General Information
Name: Republic of Peru
Capital: Lima
Language: Spanish, Quechua
Religions: The predominant religio is Roman Catholic, but there is a scattering of other
Christian faiths.
Geography: Perú is the third largest country in South America, after Brazil and Argentina,
Peru is located in the western and central part of South America. Its territory borders
Ecuador and Colombia to the north, Brazil and Bolivia to the east, and Chile to the southIt
is made up of a variety of landscapes, from mountains and beaches to deserts and rain
forests, because it has so many different ecosystems, Peru is home to a wider variety
of plants and animals than most other countries on Earth. (PERU TRAVEL, s.f.)

Culture:

Peru boasts a great wealth of cultures and traditions, It has delicious, acclaimed
gastronomy, possesses imposing archaeological complexes, 12 Unesco world heritage
sites and has vast natural reserves. Peru’s culture is a set of beliefs, customs and way of
life inherited from the native Incas, Spanish conquistadors and settlers, Immigrant
groups such as Africans, Japanese, Chinese and Europeans have also contributed to
the society. (DISCOVER PERU, s.f.)

Business culture:
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Peruvian culture tends to be relationship-driven, and this is reflected in Peruvian business
culture. One of the guiding values in Peruvian business culture is the notion of ‘confianza’
(trust). Becoming familiar with and developing a personal relationship with your business
partner is essential before undertaking any significant business dealings.
The business culture in Peru is formal. Business structures are hierarchical, with decision-
making done from the top. (CULTURAL ATLAS, s.f.)

Economy
Peru is one of the richest countries in the world in terms of natural resources. Gold,
silver, copper, zinc, lead, and iron are found across the country, and there are reserves
of oil and natural gas. Even so, jobs there can be very hard to find, and Peru remains
one of the world's poorest countries. The Peruvian economy, which is the seventh largest
in Latin America, Since GDP decelerated sharply in 2009, the economy has built on solid
growth fundamentals. Domestic demand has been the main driver of growth as an overall
improvement in confidence in the economy has boosted domestic consumption and
investment.
The combination of economic modernization, natural resource abundance and continued
improvements in economic governance and political stability that have been taking place,
are helping Peru to emerge as one of the most stable economies in Latin America.

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 2013 2014 2015 2016 2017

Population (million) 30.5 30.8 31.2 31.5 31.8

GDP per capita (USD) 6,412 6,234 5,729 6,209 6,779

GDP (USD bn) 195 192 178 196 216

Economic Growth (GDP, annual

5.8 2.4 3.3 4.0 2.5
variation in %)

Consumption (annual variation in %) 5.9 4.2 4.9 3.2 2.3

Investment (annual variation in %) 7.9 -2.3 -4.7 -4.3 -0.2

Manufacturing (annual variation in

5.2 -1.1 -0.9 -0.2 0.2
%)

Retail Sales (annual variation in %) 4.9 1.9 3.1 2.8 1.6

Unemployment Rate 5.9 6.0 6.4 6.7 6.9

Fiscal Balance (% of GDP) 0.9 -0.2 -1.9 -2.3 -3.0

Public Debt (% of GDP) 19.2 19.9 23.3 23.9 24.9

Money (annual variation in %) 7.4 7.3 2.0 11.5 13.0

Inflation Rate (CPI, annual variation

2.9 3.2 4.4 3.2 1.4
in %, eop)
Inflation Rate (CPI, annual variation
2.8 3.3 3.6 3.6 2.8
in %)
Inflation (PPI, annual variation in %) - - - - -

Policy Interest Rate (%) 4.00 3.50 3.75 4.25 3.25

Stock Market (annual variation in %) -23.6 -6.1 -33.4 58.1 28.3

Exchange Rate (vs USD) 2.80 2.99 3.41 3.36 3.24

Exchange Rate (vs USD, aop) 2.70 2.84 3.18 3.37 3.26

Current Account (% of GDP) -5.3 -4.7 -5.3 -2.6 -1.2

Current Account Balance (USD bn) -10.4 -9.1 -9.5 -5.1 -2.7

Trade Balance (USD billion) 0.5 -1.5 -2.9 2.0 6.7

Exports (USD billion) 42.9 39.5 34.4 37.1 45.4

Imports (USD billion) 42.4 41.0 37.3 35.1 38.7

Exports (annual variation in %) -9.5 -7.9 -12.9 7.8 22.4

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 Imports (annual variation in %) 3.4 -3.3 -9.0 -5.9 10.3

International Reserves (USD) 65.7 62.3 61.5 61.7 63.6

External Debt (% of GDP) 31.0 36.1 41.0 38.1 35.5

Colombia

General Information
Name: Republic of Colombia
Capital: Bogotá
Language: Spanish
Religions: The predominant religion is Roman Catholic, but there is a scattering of other
Christian faiths.
Geography:
Colombia is characterized by its six main natural regions that present their own unique
characteristics, from the Andes mountain range region shared with Ecuador and
Venezuela; the Pacific coastal region shared with Panama and Ecuador; the Caribbean
coastal region shared with Venezuela and Panama; the Llanos (plains) shared with
Venezuela; the Amazon Rainforest region shared with Venezuela, Brazil, Peru and
Ecuador; to the insular area, comprising islands in both the Atlantic and Pacific
oceans.[133] It shares its maritime limits with Costa Rica, Nicaragua, Honduras, Jamaica,
Haiti, and the Dominican Republic.

Culture:

Colombia lies at the crossroads of Latin America and the broader American continent, and
as such has been hit by a wide range of cultural influences. Native American, Spanish
and other European, African, American, Caribbean, and Middle Eastern influences, as
well as other Latin American cultural influences, are all present in Colombia's modern
culture. Urban migration, industrialization, globalization, and other political, social and
economic changes have also left an impression.
21
Many national symbols, both objects and themes, have arisen from Colombia's diverse
cultural traditions and aim to represent what Colombia, and the Colombian people, have
in common. Cultural expressions in Colombia are promoted by the government through
the Ministry of Culture.

Business culture:
 Generally speaking, Colombians have an incredible work ethic. However, their
reluctance to directly say “no” means there can be some misunderstandings about
timeframes and deadlines.
 Though they care for quality, Colombians generally view price as the better indicator
of a successful partnership.
 It is important to show a businessperson’s secretary respect and courtesy.
Thoughtfulness aimed in their direction can sometimes facilitate future success and
appointments.
 You may be invited to somebody’s home to dine with them in the interests of furthering
a business relationship. It is considered very rude to decline.
 Colombians prefer face-to-face communication. If this option is not available, they
generally are more likely to discuss issues over the phone rather than by email. To
mediate this balance, try and call as frequently as possible whilst following up
conversations with emails summarising the main points.
 Colombian decision-making procedures are quite hierarchical. Therefore, be aware
that representatives of a lower status may be unable to make large promises on the
spot.
 On the Corruption Perception Index (2017), Colombia is ranked 96th out of 180
countries, receiving a score of 37 (on a scale from 0 to 100). This perception suggests
that the country’s public sector is somewhat corrupt. (CULTURAL ATLAS, s.f.)

Economy
Economic growth is projected to pick up this year on the back of robust domestic
demand. In particular, investment activity is seen gathering pace amid increased outlays
in infrastructure and oil-industry projects, while consumer spending is expected to
remain strong. Uncertainty over the pace of fiscal reform and commodity price volatility
are key risks to the outlook. FocusEconomics panelists expect GDP to grow 3.1% in
2019, which is up 0.1 percentage points from last month’s forecast, and 3.2% in 2020.

22
Colombia Economy Data
2013 2014 2015 2016 2017
Population (million) 47.1 47.7 48.2 48.7 49.3
GDP per capita (USD) 8,106 7,992 6,075 5,808 6,322
GDP (USD bn) 382 381 293 283 312
Economic Growth (GDP, annual 4.6 4.7 3.0 2.1 1.4
variation in %)
Domestic Demand (annual 5.1 6.2 2.4 1.2 1.2
variation in %)
Consumption (annual variation in 4.8 4.6 3.4 1.6 2.4
%)
Investment (annual variation in %) 6.0 9.9 2.8 -2.9 1.9
Industrial Production (annual -1.3 1.5 2.0 4.1 -0.5
variation in %)
Retail Sales (annual variation in 4.7 8.4 6.4 2.0 -0.1
%)
Unemployment Rate 9.6 9.1 8.9 9.2 9.4
Fiscal Balance (% of GDP) -2.3 -2.4 -3.0 -4.0 -3.6
Public Debt (% of GDP) 35.1 38.1 42.9 43.8 44.9
Money (annual variation in %) 14.7 9.1 12.5 6.9 7.1
Inflation Rate (CPI, annual 1.9 3.7 6.8 5.7 4.1
variation in %, eop)
Inflation Rate (CPI, annual 2.0 2.9 5.0 7.5 4.3
variation in %)
Inflation (PPI, annual variation in -0.1 6.0 5.5 2.2 3.3
%)
Policy Interest Rate (%) 3.25 4.50 5.75 7.50 4.75
Stock Market (annual variation in -11.2 -11.0 -26.5 18.2 13.6
%)
Exchange Rate (vs USD) 1,93 2,389 3,175 3,002 2,985
Exchange Rate (vs USD, aop) 1,869 2,003 2,749 3,052 2,952
Current Account (% of GDP) -3.3 -5.2 -6.3 -4.2 -3.3
Current Account Balance (USD -12.5 -19.8 -18.6 -12.0 -10.3
bn)
Trade Balance (USD billion) 3.2 -4.6 -13.5 -9.1 -4.6
Exports (USD billion) 60.3 56.9 38.6 34.1 39.7
Imports (USD billion) 57.1 61.5 52.1 43.2 44.2
Exports (annual variation in %) -2.1 -5.6 -32.2 -11.6 16.4
23
 Imports (annual variation in %) 0.8 7.8 -15.4 -16.9 2.3
International Reserves (USD) 43.6 47.3 46.7 46.7 47.6
External Debt (% of GDP) 24.1 26.8 38.2 42.5 40.0
https://www.focus-economics.com/country-indicator/colombia/population

Theoretical framework

The following text is intended to state different theories about free trade presented by
different economists throughout history, for the solution of the problem on which the
content of the present work is based.

It should be said that free trade was born with economic science at the end of the 18th
century and over time there have been people who have made important contributions to
neoliberal politics, all of them coming to the same fundamental idea: free trade benefits
economically countries that practice it.

The previous idea is based on the premise that the states that practice it favor that citizens
have access to products that are not available in their country or that the cost to obtain
them is very high. Given that free trade implies eliminating tariff barriers, it is no other
understanding for nations that practice it as their producers can compete without such
barriers that are partly a protection, it is here that Adam Smith's theory called 'advantage'
should be remembered as a first reference Absolute '1 in which there is a unique
characteristic about the product made that no one else offers and this allows a step
forward on the competitor, as a next reference it is necessary to state the' comparative
advantage '2 exposed by David Ricardo in which the premise of comparing what product
is facilitated with respect to potential competitors and identifying if there can really be an
advantage is stated; This can be used by the states to identify, for example, the products
that benefit and harm them and to carry out a division of labor in agreement with the other
states involved where freedoms are identified and granted, having the absolute
advantages in the production of any of the goods that are marketed, in this way allow a
production at a low cost and with less work differently from another country that produces
or uses it.

The next step for a state in its duty to anticipate and act upon the positive and negative
consequences that a treaty of this nature brings is to know deeply the behavior of an
economy in this new dynamic, it is here that the

24
importance of the American author Milton Friedman who became an advocate of
capitalism and economic freedom, Friedman bases all this idea on the principles of the
philosophy of laissez and his economic theory emerged from a study of the quantitative
theory of money together with Keynesian theory. "He openly opposed pricing policies and
business behavior contrary to competition" 3, his idea is summed up in a critique of state
intervention on the economy from a purely scientific argument, for Friedman economic
freedom in a requirement for political freedom.

The Pacific Alliance is an economic and development initiative, improving investments,

trade and customs unions especially with Asia. In this attempt, naturally, any country will
want to obtain the greatest advantages for its companies. In this sense, if the state wants
to interfere with free trade agreements, it must be careful so that in its attempt to protect
vulnerable producers, the dynamics of free trade and its advantages are not affected.

25
1. Smith Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. 1776.
2. David Ricardo. On the Principles of Political Economy and Taxation. 1817
3. Milton Friedman. Free to Choose. 1980

Legal Framework

 Decree 326 of February 24 of 2016, Colombia.

 Decree 98 of September 12 of 2015, Chile.

 Framework Agreement Of The Pacific Alliance

 The WTO agreements cover goods, services and intellectual property. They spell out
the principles of liberalization, and the permitted exceptions. They include individual
countries’ commitments to lower customs tariffs and other trade barriers, and to open
and keep open services markets. They set procedures for settling disputes. They
prescribe special treatment for developing countries. They require governments to
make their trade policies transparent by notifying the WTO about laws in force and
measures adopted, and through regular reports by the secretariat on countries’ trade
policies.

26
 Conceptual Framework

Integration as to what concerns us on the subject can be defined as a process in which

national states "mix, confuse and merge voluntarily with their neighbors, so that they lose
certain factual attributes of sovereignty, at the same time that acquire new techniques to
jointly resolve their conflicts "(Haas, 1971: 6), and can be achieved by creating a strong
institutionality that is permanent and capable of making decisions that are inclusive for all
members.

Items such as:

the greater commercial flow, the promotion of contact between elites, the facilitation of
meetings or communications of people across national borders, the invention of symbols
that represent a common identity - may make integration more likely [but are not its
equivalent] (Malamud and Schmitter, 2006: 17).

Regional integration is sometimes also called regionalism and this depends exclusively
on state management. In these times and with the world in full globalization, one of the
most important concepts that is economic integration can be seen, which can be carried
out between two or more countries regardless of the regions, and 4 stages influence this
(Balassa, 1961 ).

- The first is the free trade zone, a territorial area in which there are no national customs;
This means that products from any member country can enter others without paying tariffs,
as if they were sold anywhere in the country of origin.

- The second stage is the customs union that establishes a tariff that will be paid for
products from third countries; This implies that the Member States form a single entity in
the field of international trade.

-The third stage is the common market, customs union to which the free mobility of
productive factors (capital and labor) is added to the existing mobility of goods and (if any)
services; Such progress requires the adoption of a common commercial policy and often
entails the coordination of macroeconomic policies and the harmonization of national
laws.

Finally, the economic union consists in the adoption of a single currency and monetary
policy. As the process progresses, economic integration spills its effects on the political
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arena. In particular, the mobility of people and the need to harmonize internal policies and
establish common institutions feed the political controversies and generate the need to
make decisions that exceed the technical or economic scope. Therefore, regional
integration processes can be compared with those of state unification, although there is a
crucial distinction: the former are always voluntary, the latter have rarely been.

Regional integration is, then, a transitional stage between a known situation (the
Westphalian order of nation states) and another under construction. Unlike the state
construction process, 8 however, regional integration has a voluntary origin and its final
stage is undetermined. Its concrete manifestations assume very different forms.

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 Kind of Investigation

To know the type of research on which our work is based, it was necessary to know and
clarify the different types in order to determine the type of research that applies to this
case and as results it is determined that it is exploratory research.

Exploratory investigation

In this sense, the exploratory investigation would be the first phase that an investigator
fulfills on an object of study that is unknown to him, or even for the rest of the professional
community of the field in which the investigation is carried out, lacking the background
that can guide the research undertaken.

In this way some professionals describe exploratory research as the first approach that a
researcher makes on their object of study, in order to be able to grasp with general
information, about their appearance, behavior and characteristics, for which this type of
research is also classified as an approximate study, since it is based on the observations
and approximate calculations that the researcher can establish in his first contact with
what he intends to establish an investigation.

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 Research Technique

Secondary Research

Secondary research is the collection of previously published information such as case

studies, books, etc.

Online research:

In today's world this is one of the fastest ways to gather information on any subject. Many
data is easily available on the Internet and the researcher can download it when needed.
An important aspect that must be taken into account in such an investigation is the
authenticity of the source websites from which the researcher is collecting the information.

Bibliographic research:

Literary research is one of the cheapest methods used to discover a hypothesis. There is
a huge amount of information available in libraries, online sources or even in commercial
databases. Sources may include newspapers, magazines, library books, agency
documents
government articles related to specific topics, literature, annual reports, published
statistics of research organizations, etc.

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 Results of the Investigation and Results of the Initial Hypothesis

To give a concise and explanatory answer to the response of the initial hypothesis we
must clarify the way in which the investigation was prepared, initially we specified and
verified what knowledge we had before the investigation regarding the Pacific Alliance
Treaty and the countries that made it up.

Given these results, we proceed to establish what we want to know and the system in
which research is carried out and the research hypothesis is established.

The research hypothesis divides into three parts:

• Identify the role of the countries that make up the alliance

• Publicize the integration factors of the countries

• Potentialization of local businesses and products

In the first month the countries of the investigation were listed (Colombia, Chile, Peru,
Mexico).

Research was carried out in each country regarding its main characteristics, making clarity
in its economy, culture, and population, which can be seen in the previous numbers.

Among the integration factors we find:

• Movement of business people and facilitation of migratory transit

• Trade and integration

• Services and capitals

• Cooperation

• Institutional matters

Each of the elements of integration has been agreed upon during the summits where the
guarantor countries of the treaty where the agreements and the agreements mentioned
there have been reached have been cited.

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Finally, on the potentialization of product companies and populations, it is basically subject
to the negotiations that take place in the events that have the name “Macro Business
Roundtable of the Pacific Alliance where more than 220 small and medium-sized
companies in Colombia , Chile, Peru and Mexico met with buyers from these countries
and with guests from Asia and Oceania.

This is the largest business platform not only in the economic bloc but in Latin America
focused on contributing to the greater trade of SMEs in Chile, Colombia, Mexico and Peru
and entering third economies, mainly those of the Asia Pacific.

The products to be treated by the almost 400 companies participating in this meeting are
from the agribusiness, clothing and manufacturing sectors, such as fruits and vegetables,
confectionery and chocolate, aquaculture and fishing, grains, coffee, cocoa, as well as
materials and finishes for the construction, containers and packaging, cosmetic line and
personal care, clothing, jewelry, crafts, footwear, among others.

After successful editions in the Pacific Alliance regions such as Pereira, Colombia and
Oaxaca, Mexico, this year the city of Arequipa will become the Capital of SMEs in Chile,
Colombia, Mexico and Peru receiving exporting and importing companies from economic
block and of many countries Observers and Candidates to Associates to the process.

https://alianzapacifico.net/#1518573462513-288e8322-cba9

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 Bibliography

http://www.sice.oas.org/TPD/Pacific_Alliance/Pacific_Alliance_e.asp

https://en.wikipedia.org/wiki

https://culturalatlas.sbs.com.au

https://www.focus-economics.com

https://www.wto.org

https://educacion.elpensante.com/la-investigacion-exploratoria/

https://www.questionpro.com/blog/es/investigacion-exploratoria/

https://alianzapacifico.net/en/mas-de-200-pymes-participan-en-macrorrueda-de-
negocios-de-la-alianza-del-pacifico/

https://alianzapacifico.net/#1518573462513-288e8322-cba9

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