Thank you very much, Mr. Chair. It's a pleasure to be here.
Thank you very much for inviting us to give a presentation.
For all of us it is very important to be here sharing with this committee.
In my case, I will present the points of view of Chile on a potential agreement between Canada and the Pacific Alliance. If you will allow me, I will make my presentation in English. Then I'd be pleased to answer some questions in Spanish, if it's okay with you. I'm certain there will be many coincidences with my fellow ambassadors in this regard.
As ambassador of Chile, I would like to say that we enjoy an excellent relationship with Canada. Politically we work very closely in many areas. In trade, Chile celebrated last year the 20th anniversary of a successful bilateral free trade agreement with Canada. At that time, we signed its modernization. For Chile, Canada ranks among the most important foreign investors in a crucial sector for our development, and that is mining.
Why is it important that Canada reach an agreement with the Pacific Alliance when it already has free trade agreements with each one of its members? The bloc is a market of 225 million people. It represents 55% of Latin America's foreign trade and 44% of the region's foreign direct investment. If the alliance were a single country, it would be the eighth-largest economy in the world, with a combined GDP of over $2 trillion U.S. These figures help illustrate the size of the Pacific Alliance as a trade market and potential partner.
The alliance brings together, as you can see, Chile, Mexico, Peru, and Colombia, which are all politically and economically stable countries within our region. It has been implemented in an agile and pragmatic fashion, building around common themes. This approach has allowed the alliance to grow beyond only trade. It now has technical groups working on education, tourism, people mobility, gender, environment, and labour, to name a few, seeking to coordinate this effort and taking advantage of existing synergies in these areas.
From the trade standpoint, we believe the strategic perspectives of an agreement are advantageous. The four members of the Pacific Alliance and Canada can accumulate “origin”, a procedure that will facilitate the entrepreneurs of our countries to exchange product with tariff advantages, thus encouraging our insertion into the regional value chain. In addition, the trade negotiation process between the alliance and Canada presents a great opportunity to advance a certain homogenization of norms and to move forward jointly on the agenda trade issues that go beyond the tariff aspects.
Nevertheless, there is another very important aspect. Today we're facing a complex moment at the international level. Both Chile and the Pacific Alliance are determined to demonstrate their commitment to economic trade opening and regional integration. In the Pacific Alliance we want to turn current challenges into opportunities, to build an international trading system based on clear rules and aimed at building resilient and sustainable societies. Chile believes that moving forward in creating legal frameworks through these regional agreements constitutes a higher and more strategic stage, since it creates a broader reference point to continue fostering greater integration and synergy among countries with common development ambitions.
For our countries, it is difficult to demonstrate the benefit of this agreement only through economic figures. The result will not be seen in absolute terms because there is not only the tariff reduction, but the sum of several factors that the creation of an expanding space of integration brings, like the one we're building through this process.
Furthermore, reaching an agreement with Canada—and also, with Australia, New Zealand, and Singapore—with the same type of negotiation, will take the bloc a step farther in fulfilling one of its fundamental objectives, which is to become an area of trade integration and projection to the Asia-Pacific. We have to be reminded that, just recently, South Korea has expressed formal interest in starting a dialogue with a view to achieving associate state status.
In March 2017, the Pacific Alliance indicated its willingness to start trade negotiations with countries or blocs of the Asia-Pacific region, as long as they are translated into quality agreements with a high standard of trade disciplines and that they conclude in a short time. To date, we have had two negotiation rounds with Canada and Chile is prepared to host a third round from March 3 to March 9. Chile has aspired to an alliance, that is not only a framework for Latin America integration, but also opens the door to new agreements and new strategies to link us with other countries beyond our borders. These times require it and we are convinced that together, we're stronger and we will be more prosperous.
Thank you.